Employers sponsoring group health plans should begin to focus on plan amendments that may be required in the “near term” under the recently adopted health care reform act, known as the Patient Protection and Affordable Care Act, as amended (PPACA).
Unlike PPACA’s numerous and complicated rules, incentives, subsidies, penalties and effective dates applicable to the health care industry, insurers, employers and individual citizens, the requirements for making near-term amendments to employer-sponsored group health plans are limited in number and easily understood.
Here is a list of the most important requirements that become effective with respect to group health plans (both insured and self-insured) for plan years beginning on and after September 23 (section numbers below refer to applicable sections of PPACA):
- the elimination of pre-existing condition limitations for participants under age 19 (section 1255);
- the elimination of lifetime limits on the dollar value of “essential health benefits” (section 2711);
- regulated annual limitations on the dollar value of essential health benefits (section 2711);
- no rescission or cancellation of coverage, except for fraud or misrepresentation (section 2712);
- designated preventive care services and immunizations must be provided, with no cost-sharing with participants (section 2713);
- dependent coverage must be extended to adult children until age 26 (section 2714);
- participants must be notified of material changes in a group health plan at least 60 days prior to the effective date of the change (section 2715);
- rules restricting discrimination in eligibility and coverage in favor of “highly compensated employees”, currently applicable only to self-insured plans, are to be extended to insured plans (section 2716);
- new procedures for appealing denied claims will provide for an external review process (section 2719);
- a patient’s “bill of rights” will remove certain restrictions on access to primary care providers, emergency services, pediatric specialists and obstetrical and gynecological care (section 2719A);
- W-2s for 2011 must show the cost of health coverage (section 1514); and
- over-the-counter medicines cannot be reimbursed by a flexible spending account unless prescribed by a doctor (section 9003).
Some of the above changes are optional for “grandfathered” plans (i.e., plans in existence on March 23) (section 1251).
The list is finite, but so is the time period for making these changes. Plan Administrators should begin to review their plan documents, noting where changes will be required, and then begin discussions with their insurers, third party administrators and counsel to ensure a timely and coordinated implementation of these changes.
PPACA may be found here.