As you likely are aware, Congress passed the Patient Protection and Affordable Care Act (PPACA) effective March 23, 2010. Many of the PPACA’s provisions became effective in 2011 (depending on your group health plan’s “plan year”), which include the notice requirements imposed on plan sponsors and requiring revisions to enrollment materials, summary plan descriptions (SPDs) and other plan documents related to employer-sponsored group health plans.
We recommend that the following required notices be incorporated into 2011 open enrollment materials or, if open enrollment materials have already been distributed, sent to plan participants in the form of an addendum to the open enrollment materials.
Applicable to All Group Health Plans
Special Enrollment Notice for Dependant Coverage of Children Up to Age 26
Effective beginning on the first day of the plan year beginning on or after Sept. 23, 2010, group health plan coverage must be offered to dependents up to the age of 26 (to the extent your group health plan covers dependents). The regulations implementing mandatory dependent coverage of children up to age 26 require plan sponsors to provide a special enrollment notice, which provides dependents an opportunity to be covered by the plan up to age 26 (e.g., children who graduated in May, aged out and have not been covered, are on COBRA on account of aging out, or never were eligible on account of age when the participant was first eligible for plan coverage). 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 Jan. 1, 2014, only adult children who are not eligible for their own employersponsored group coverage may enroll as dependents under their parents’ plan.
Notice Regarding Plan’s Grandfathered Status
A group health plan in effect as of March 23, 2010, that has not been substantially changed so as to affect its grandfathered status will avoid immediate application of some of the provisions of PPACA. In order to maintain grandfathered status, the plan sponsor is required to include a statement, in any plan materials provided to participants, describing the benefits provided under the plan that are considered grandfathered. If the plan has lost its grandfathered status or was never grandfathered, disclosure that the plan is not a grandfathered plan is not necessary.
Special Enrollment Notice for Individuals Who Have Reached Lifetime Limit
Effective the first day of the plan year after Sept. 23, 2010, lifetime limits are eliminated. As a result, plan sponsors are required to give a special enrollment notice to individuals who have reached the lifetime limit under the plan but otherwise are eligible for coverage. Only individuals who have reached the lifetime limit are required to receive the notice.
Notice of Rescission of Coverage
Plan sponsors now are required to give notice 30 calendar days in advance before coverage can be rescinded (i.e., revoked retroactively). PPACA limited the circumstances under which coverage can be rescinded to cases involving fraud or intentional misrepresentation or cases in which premiums are not paid timely. Plan sponsors may need to revise the plan document and SPD provisions describing how benefits can be lost due to rescission as limited by PPACA.
Applicable to Non-Grandfathered Plans
Patient Protection Disclosures
Plan sponsors are now required to provide a notice regarding participants’ rights to: (1) choose a primary care provider or a pediatrician when designation of a primary care physician is a plan requirement, and (2) obtain obstetrical or gynecological care without prior authorization. This notice should be incorporated in the SPD or provided as a separate amendment whenever the SPD is distributed. Grandfathered plans are not subject to these requirements immediately and, thus, disclosure is not applicable.
While the PPACA is intended to give every American equal access to health care coverage, many of its requirements impose additional administrative burdens on employers sponsoring group health plans. We are able to assist you in determining whether your group health plan is grandfathered, and in preparing the required notices plan amendments and updating SPDs as necessary to comply with the PPACA in general.