Recently, the Departments of Labor, Treasury and Health and Human Services (the “Departments”) issued a fourth Frequently Asked Questions (FAQs) to help plan sponsors and other affected parties understand the requirements of the Patient Protection and Affordable Care Act (the “Affordable Care Act”). Interestingly, several clients have recently had one of the same questions with regard to the notice requirements for grandfathered health plans. To ensure maximum client exposure, we have summarized the FAQ below.
A “grandfathered” plan is exempt from some of the coverage mandates under the Affordable Care Act. The final regulations provide that, to maintain status as a grandfathered heath plan, the group health plan or coverage must include a statement that the plan believes it is a “grandfathered plan.”
Question: Must a grandfathered health plan provide the disclosure statement every time it sends out a communication, such as an explanation of benefits, to a plan participant or beneficiary? If not, how does a grandfathered plan comply with the disclosure requirement?
Answer: The FAQ provides that a grandfathered health plan will comply with the disclosure requirement if it includes the model language provided in the Department’s regulations (or a similar statement) whenever a summary of benefits under the plan is provided to plan participants or beneficiaries. The FAQ notes that, although it is not necessary for the plan sponsor to provide the notice language within every plan communication, the Departments are encouraging plan sponsors and issuers to identify other communications in which the grandfathered plan notice would be appropriate and consistent with the goal of providing participants with enough information to make informed choices.
Based on this answer, we advise clients that, at a minimum, the grandfathered plan notice certainly must be included in all summary plan descriptions (SPD’s) and certificates of insurance. We would also encourage all plan sponsors to include the grandfathered plan notice in any documents or materials that simply summarize the plan benefits, including any open enrollment materials.