#22 - Required Notices Under PPACA
The Patient Protection and Affordable Care Act (PPACA) has a series of new notification and communication requirements that start this year and extend over the next several years. Much is still in flux about the changes in healthcare, but the following summary should help summarize some of the important key notification requirements.
Plan sponsors that have decided to maintain Grandfathered Status (Compliance Alert #20 - Agencies Clarify "Grandfathering" Under Healthcare Reform") must provide participants with a statement that the plan intends to preserve the basic health coverage that was in effect on March 23, 2010, and that some of the consumer protections of the Act may not apply. The Department of Health and Human Services (HHS) has issued a Model Notice to satisfy this requirement. In addition, to maintain status as a grandfathered plan, the plan sponsor must retain records of the plan terms in existence on March 23, 2010, including plan documents, insurance policies, summary plan descriptions (SPDs), and other cost-sharing documentation.
Sponsors of non-grandfathered plans must provide Notice describing the participant's right to select any available participating primary care provider, or pediatrician for children, and the right to obtain obstetrical or gynecological care without preauthorization or referral. A participant in a Plan now has the right to (1) choose a primary care provider or a pediatrician, when the Plan requires the participant to designate a primary care physician and (2) obtain obstetrical or gynecological care without prior authorization. Accordingly, the Plan must notify a participant about these rights. The notice must be provided whenever the Plan provides the participant with a summary plan description or other similar description of benefits under the Plan. Also, the notice must be furnished no later than the first day of the first plan year beginning on or after September 23,2010.
In May, interim final regulations provided guidance for the new requirement that plans provide coverage for adult children until age 26. The regulations require a plan or issuer to give such a child an opportunity to enroll that continues for at least 30 days (including written notice of the opportunity to enroll). This enrollment opportunity (including the written notice) must be provided not later than the first day of the first plan year beginning on or after September 23, 2010. The notice may be included with other enrollment materials that a plan distributes, provided the statement is prominent.
The following model language can be used to satisfy the notice requirement or you may use the Model Notice provided by the DOL.
"Individuals whose coverage ended, or who were denied coverage (or were not eligible for coverage), because the availability of dependent coverage of children ended before attainment of age 26 are eligible to enroll in [Insert name of group health plan or health insurance coverage]. Individuals may request enrollment for such children for 30 days from the date of notice. Enrollment will be effective retroactively to [insert date that is the first day of the first plan year beginning on or after September 23, 2010.] For more information contact the [insert plan administrator or issuer] at [insert contact information]."
In June, interim final regulations provided guidance for the new requirement that plans no longer put lifetime limits on health.
Under the rules, plans are required to give written notice that the lifetime limit on the dollar value of all benefits no longer applies and that an individual, if covered, is once again eligible for benefits under the plan. The notices and enrollment opportunity must be provided beginning not later than the first day of the first plan year beginning on or after September 23, 2010. For individuals who enroll under this opportunity, coverage must take effect not later than the first day of the first plan year beginning on or after September 23, 2010.
The following model language can be used to satisfy the lifetime limit notice requirement or you may use the attached Model Notice provided by the DOL.
"The lifetime limit on the dollar value of benefits under [Insert name of group health plan or health insurance issuer] no longer applies. Individuals whose coverage ended by reason of reaching a lifetime limit under the plan are eligible to enroll in the plan. Individuals have 30 days from the date of this notice to request enrollment. For more information contact the [insert plan administrator or issuer] at [insert contact information]."
OTC Drug Reimbursements
Effective January 1, 2011, plan participants can no longer receive reimbursement under a tax-advantaged account, such as an FSA, HSA, or HRA, for over-the-counter medicines or drugs without a prescription. While notice of this change is not required by law, plan sponsors should alert employees of this change during open enrollment.
For those employers with fully insured plans, some insurance companies may provide some or all of the required notifications on your behalf. However, to ensure compliance, we suggest that you issues the notices to your employees. For self-funded groups, the responsibility falls on the employer.