The Department of Labor has released three model notices in regards to health reform compliance.

Dependent Coverage to Age 26 - Children who become eligible for coverage due to the new extension of coverage to age 26 must be given at least a 30-day enrollment period following written notice of their eligibility. The notice must be sent no later than the first day of the plan year following September 23, 2010 with coverage effective the first day of the plan year.

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Lifetime Limits - A plan may not impose a lifetime limit on coverage for plan years following September 23, 2010. Participants who previously reached a lifetime limit under the plan must be given written notice explaining that the plan no longer has a lifetime limit and that they are now eligible for coverage. The notice must be sent no later than the first day of the plan year following September 23, 2010 with coverage effective the first day of the plan year.

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Patient Protections - This notice explains a participant's right to select any network provider as a primary care physician or pediatrician and the right to obtain obstetrical or gynecological care without prior authorization. The notice must be included in the SPD for plan years following September 23, 2010 and does not apply to grandfathered plans.

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Effective July 1, 2010, the federal government's new subsidized high risk pool is accepting applications for coverage. It is called the "Pre-existing Condition Insurance Plan" and is open to individuals who have been denied health insurance by a private insurance company due to a pre-existing condition and who have been uninsured for at least six months. Under the Patient Protection and Affordable Care Act (PPACA), states have the option of operating their own program. Premium rates and effective dates vary depending on whether the coverage is provided through the federal program or a specific state program. Additional information is available on the new www.healthcare.gov website.

Effective June 29, 2010, employers may begin submitting applications for the Early Retiree Reinsurance Program. Retiree claims in excess of $15,000 up to $90,000 will be eligible for 80 percent reimbursement. Only claims incurred after June 1, 2010 are eligible for reimbursement, but claims incurred during the current plan year prior to June 1, 2010 may still be included in the calculation to determine the $15,000 claims minimum. Applications will be considered in order of receipt. Incomplete applications will be returned and the employer would need to begin the application process again by submitting a new application.

The Departments of Health and Human Services, Labor and Treasury issued regulations regarding pre-existing condition exclusions, lifetime limits, annual limits, rescissions, and patient protections, which the executive branch is terming a Patient Bill of Rights. Group health plans with plan years following September 23, 2010 may not impose an annual limit lower than $750,000, which will be increased to $1.25 million for plan years following September 23, 2011, and $2 million following September 23, 2012. A waiver may be available for limited medical plans (also known as "mini-med plans") if the compliance with the annual limitations would result in loss of coverage or increased premiums for insureds. Health Reimbursement Arrangements (HRAs) that are integrated with a high deductible health plan and retiree-only HRAs are exempt from the annual limitation requirements. However, the Departments are accepting comments as to how the annual limitation requirements should apply to stand alone non-retiree HRAs.

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The Department of Labor's Employee Benefits Security Administration has released a new frequently asked question (FAQ) concerning the Mental Health Parity and Addiction Equity Act (MHPAEA). The FAQ addresses one specific question concerning outpatient benefits that has been raised since the issuance of the interim final regulations.

The FAQ maintains that enforcement action will not be pursued against a plan or issuer which divides its benefits furnished on an outpatient basis into two sub-classifications, including (1) office visits, and (2) all other outpatient items and services. A plan or issuer that establishes such sub-classification may not then impose any financial requirement or treatment limitation on mental health or substance use disorder benefits that is more restrictive than the predominant financial requirement or treatment limitation that applies to substantially all medical/surgical benefits in the sub-classification using the methodology set forth in the interim final rules. The answer reinforces that separate sub-classifications for generalists and specialists on either an inpatient or outpatient basis are not permitted.

In other related news, a federal judge ruled in favor of the U.S. Departments of Labor, Treasury, and Health and Human Services in the case of Coalition for Parity Inc. v. Sebelius. This ruling means that regulators have "good cause" to forego notice and comment on interim final rules regarding mental health services parity. The Coalition for Parity Inc. had unsuccessfully claimed that the issuance of the interim final rules violated the notice and comment requirements of the Administrative Procedures Act and asked for implementation of the interim final rules to be blocked. The public comment period on the interim final rules ended on May 3, 2010 and the Departments are now working to issue the final regulation.

Click here to view the new FAQ.

CMS updated the "Disclosure to CMS Form" that group health plans must provide to CMS to disclose the creditable coverage status of their plans. Disclosure of creditable coverage status must be made to CMS within 60 days after the beginning of each plan year, within 30 days after termination of the prescription drug plan, and within 30 days after any change in the plan's creditable coverage status. While mostly minor, the changes do include two new examples regarding when a change in status occurs for purposes of disclosing the creditable coverage status of the plan. One example states that even if the carrier stayed the same but had creditable coverage last year and non-creditable coverage this year, there is a change in status and a disclosure to CMS must be completed within 30 days. In the second example, a company that had creditable coverage both last year and this year does not have a change in status, even though the company changed carriers. The form also notes that entities claiming the retiree drug subsidy should not fill out the Disclosure to CMS Form for their retiree drug subsidy plan participants.

The IRS has extended the April 30 adoption deadline to July 30, 2010 for certain pre-approved plan sponsors affected by recent severe weather in eight states due to damage caused by the severe storms and flooding. The extension applies to taxpayers affected by the federally declared disasters (occurring during the period from March 1 through May 31, 2010) in certain counties of the following eight states: Alabama, Connecticut, Massachusetts, Mississippi, New Jersey, Rhode Island, Tennessee, and West Virginia.

Click here to view Notice 2010-48.

On June 22, 2010, the Department of Labor's (DOL) Wage and Hour Division clarified the definition of "son and daughter" under the Family and Medical Leave Act (FMLA) to ensure that an employee who assumes a child-caring role is entitled to family leave regardless of his or her legal or biological relationship to the child. In its news release, the DOL provided the examples of an employee in a same-sex relationship who intends to share the parenting of a child, an uncle who is caring for his young niece and nephew when their single parent is on active military duty, and a grandmother who assumes responsibility for her sick grandchild when her own child is debilitated. In each of these situations, the FMLA would permit employees to take up to 12 weeks of unpaid leave during any 12-month period to care for the child(ren). If an employer has questions about whether the individual's relationship with the child qualifies him or her for FMLA leave, it may ask the employee to provide "reasonable documentation" or a simple statement of the family relationship.

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