The U.S. Department of Health and Human Services has placed restrictions against health insurers offering mini-med plans, saying it wants to protect consumers.

Kathleen Sebelius

The federal health reform law, The Patient Protection and Affordable Care Act (PPACA), will ban mini-med plans, or limited-benefit health insurance plans, in 2014. Until then, mini-med plans are the only type of private insurance available to some workers, according to the Department of Health and Human Services (HHS).

The HHS said it passed a rule that insurers must make consumers of mini-med plans aware of the limited benefits and direct them to sources for information about other coverage options. It also restricted the sale of mini-med plans except under limited circumstances, the department said.

“The Affordable Care Act is giving consumers more control over their health care by providing them with information about their health insurance options,” said HHS Secretary Kathleen Sebelius in a statement. “Now, we’re taking an unprecedented step to ensure consumers are informed when they purchase policies that offer limited coverage.”

Temporary waivers were issued to restrict the level of annual limits to some group health plans and health insurers, according to the HHS. Waivers last one year and are available if they are necessary to prevent a large increase in premiums or decrease in coverage access, the HHS said.

Insurers with a waiver of the annual limit requirement can sell policies to new employers and individuals, despite HHS’ selling freeze, although they must tell consumers if the coverage is subject to an annual dollar limit lower than what the law requires, according to the HHS.

Annual dollar limits are being phased out until 2014, when the PPACA bans them entirely, the department said.

Plans may not limit annual coverage of essential health benefits such as hospital, physician and pharmacy benefits to less than $750,000 for plans starting between Sept. 23, 2010, and Sept. 22, 2011; the restricted annual limit will be $1.25 million for plan years starting on or after Sept. 23, 2011, and $2 million for plan years starting between Sept. 23, 2012, and Jan. 1, 2014, according to HHS.