HEALTH CARE REFORM
The Patient Protection and Affordable Care Act is Law which requires your business to keep up with compliance. Many agencies in Washington, including the Department of Health and Human Services, the Department of Labor and the Internal Revenue Service are working hard to write and roll out the regulations for the early requirements of the Patient Protection and Affordable Care Act ("PPACA").
These new regulations create increased notice obligations that require small business owners as the plan sponsor of their company’s health insurance program to revise enrollment materials, summary plan descriptions and other plan documents. Plan sponsors must make certain that the notices are done on time and of course correctly. Generally, the notices listed below must be provided not later than the first day of the first plan year beginning on or after September 23, 2010 (i.e., January 1, 2011 for calendar year plans). These notices must be a part of the 2011 open enrollment materials you use in employee communications.
DFBenefits can assist your firm in updating or revising your Summary Plan Description. Your documents must incorporate the new requirements that are contained there and we will make a new sample wrap SPD available to all of our small business clients. Please contact us for copies of these wrap documents. For a sample of the new requirements which your summary plan description must include click below.
Click here to see a copy of a sample of new Summary Plan Document language.
Regulations Related to All Group Health Plans (Including Grandfathered Plans):
- Special Enrollment Notice for Dependent Coverage of Children Up to Age 26 - The regulations implementing mandatory dependent coverage of children up to age 26 require your customers as plan sponsors to provide a special enrollment notice. The notice provides an opportunity to enroll that lasts for at least 30 days for children who are now eligible for coverage. If a plan sponsor of a calendar year plan decides to provide the special enrollment notice earlier in connection with their open enrollment, the special notice regarding dependent coverage must be prominent and the enrollment deadline should be highlighted. If the plan is grandfathered and chooses to utilize the rules pertaining to grandfathered plans, the notice should explain that, until the plan year beginning on or after January 1, 2014, only adult children who are not eligible for other employer-sponsored group coverage (other than on account of either parent) may enroll. The Department of Health and Human Services (HHS) has released a model notice that you can find by clicking here.
- Notice Regarding Plan's Grandfathered Status – If your company has decided to maintain grandfathered status, the regulations require grandfathered plans to include a statement, in any plan materials provided to participants – e.g. enrollment materials for open enrollment , describing the benefits provided under the plan that are considered grandfathered. HHS has issued model language which can be incorporated into your customer’s existing SPDs and other plan documents. To review this model notice, please click here. If your company have decided to forgo grandfathered status, disclosure that the plan is not a grandfathered plan is optional.
- Special Enrollment Notice for Individuals Who Have Reached Lifetime Limit - The regulations concerning the elimination of lifetime limits require plan sponsors to give a special enrollment notice to individuals who have reached the lifetime limit under the plan and are otherwise still eligible for coverage. The regulations state that only individuals who have reached the lifetime limit are required to receive the notice, however, your company is unlikely to know if that has occurred, so our advice is to provide this notice to all. The model notice issued by HHS can be found here.
- Notice of Rescission of Coverage – Your company is required to give a 30 calendar day advance notice before coverage can be rescinded (i.e., coverage revoked retroactively). Generally, for small businesses with fully-insured plans, this notice would come from the insurance carrier. However, your company will need to revise both plan document and SPD provisions describe how benefits can be lost due to rescission as limited by PPACA.
Related to Non-Grandfathered Plans:
- Patient Protection Disclosures - Regulations regarding patient protections under PPACA require plan sponsors to provide a notice regarding participants' rights to (a) choose a primary care provider or a pediatrician when the plan requires participants or subscribers to designate a primary care physician; and (b) obtain obstetrical or gynecological care without prior authorization. This notice should be incorporated in the plan's SPD or provided as a separate addendum whenever the SPD is distributed. Model language issued by HHS can be found here. Grandfathered plans are not subject to these patient protection mandates and thus, disclosure is not required.
Please contact our office for more details regarding these requirements. DFBenefits urges all employers to download these sample notices from the Department of Labor and insert your plan specifics into the templates. Send out the required notices to your employees, along with new summary plan descriptions, etc by your plan renewal.
For employers who wish to hire our sister company, DFB TPA Services, to update and mail out these documents, please contact us at (800) 538-6040 or email us by clicking here.
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