The Departments of the Treasury, Labor (DOL) and Health and Human Services (HHS) issued interim final regulations imposing new requirements on group health plans (both self-funded and fully insured) that dictate procedures for internal appeals of adverse claims decisions and require an independent external appeal process for denied health plan claims. The new regulations expand the types of decisions to which the appeal procedures apply, and generally modify or expand requirements under the existing DOL claims procedure regulations.

The proposed regulations would also impose new notice requirements, add requirements to the "full and fair review" standard (such as requiring a claim denial to include an explanation of the "rationale" for the denial), and impose impartiality standards for decision-makers. Covered plans must include a description of the new internal review process requirements and the plan's external review process in all summary plan descriptions, insurance policies, certificates of coverage, membership booklets, outlines of coverage or other evidence of coverage provided to participants in accordance with the Uniform Health Carrier External Review Model Act developed by the National Association of Insurance Commissioners (NAIC).

Generally, these proposed regulations would apply to non-grandfathered insured and self-funded group health plans (or plans that lose their grandfathered status) the first plan year beginning on or after Sept. 23, 2010. Therefore, for calendar-year plans, the effective date of these new regulations will be Jan. 1, 2011.

• Click here to view the regulations.
• Click here to view the fact sheet.
• Click here to view the news release.

A new fact sheet issued by the DOL's Wage and Hour Division (WHD) explains employers' obligations under the break time requirement for nursing mothers found in the Patient Protection and Affordable Care Act (PPACA).

Employers must provide reasonable amounts of unpaid break time and a private place for breast-feeding employees to express milk, according to Fact Sheet #73, "Break Time for Nursing Mothers under the FLSA." The PPACA, which took effect in March, amended Section 7 of the Fair Labor Standards Act(FLSA). Employers must provide "a reasonable amount of break time to express milk as frequently as needed by the nursing mother," WHD states, noting that the frequency and duration of breaks "will likely vary." Employers also must provide "a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public," where the employee may express breast milk. If a space is temporarily converted into a lactation area, it must be available whenever the nursing mother needs it, the fact sheet explains. Employers must meet these provisions for one year after an employee's child is born.

The FLSA nursing break provisions cover only employees who are not exempt from the act's overtime pay requirements, according to the fact sheet. WHD cautions, however, that state laws may obligate employers to provide breaks to nursing mothers who are exempt from overtime pay under federal law. Federal law does not require employers to compensate nursing mothers for the breaks they take to express milk, WHD says, but if an employer compensates employees for breaks, an employee who uses the break time to express milk must be compensated in the same way that other employees are compensated for break time. The agency reminds employers that unless an employee is completely relieved from duty during break time, the time counts as work time for which she must be paid. An employer with fewer than 50 employees at all of its work sites is not subject to the break time requirement if compliance would cause an undue hardship. The existence of an undue hardship is measured by comparing the difficulty or expense of compliance with the size, financial resources, nature and structure of the employer's business.

The FLSA requirements do not preempt state laws that provide employees with greater protections, such as paid break time or coverage for more than one year. Examples of states that currently require employers to accommodate nursing mothers include: Arkansas, California, Colorado, Connecticut, District of Columbia, Georgia, Illinois, Indiana, Maine, Minnesota, Montana, New Mexico, New York, Oklahoma, Oregon, Rhode Island, Tennessee and Vermont.

Section 1101 of Title I of the PPACA requires that the secretary of HHS establish, either directly or through contracts with states or nonprofit private entities, a temporary high risk health insurance pool program to provide affordable health insurance coverage to uninsured individuals with pre-existing conditions. This program will continue until Jan. 1, 2014, when the state-based Exchanges will be available for individuals to obtain health insurance coverage. This interim final rule establishes the Pre-Existing Condition Insurance Plan, or PCIP program, which is separate from existing state high risk pool programs, and will continue to operate separately from those programs. Key issues addressed in this interim final rule include administration of the program, eligibility and enrollment, benefits, premiums, funding, and appeals and oversight rules.

An individual is eligible to enroll in a PCIP if he or she:

1. is a citizen or national of the United States or is lawfully present in the United States;
2. has not been covered under creditable coverage, as of March 23, 2010, during the six-month period prior to the date on which he or she is applying for coverage through the PCIP; and
3. has a pre-existing condition

According to the interim rule, a pre-existing condition is defined as "a denial of coverage, or limitation or exclusion of benefits, based on the fact that the individual denied coverage or benefits had a health condition that was present before the date of enrollment for the coverage (or a denial of enrollment), whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that date. This would include exclusions stemming from a condition identified via a pre-enrollment questionnaire or physical examination, or the review of medical records during the preenrollment period." This definition will be used in lieu of state specific definitions in order to determine eligibility under the PCIP program.

Click here to view the interim regulations.

Click here to view the Pre-Existing Condition Insurance Plan.

The DOL's Employee Benefits Security Administration (EBSA) has made a series of model notices available on its website to help employers comply with various provisions of the PPACA. The model notices apply to provisions of the PPACA that apply to Patient Protections, Lifetime Limits, Grandfathered Status and Dependent Coverage to Age 26.

The notices include background information regarding each requirement, followed by model language that may be used to satisfy the notice obligation.

• The Patient Protection Model Notice can be used to satisfy the requirement that non-grandfathered health plans and insurers provide notice to participants of their rights to (a) choose a primary care provider or pediatrician from within the plan's network or (b) obtain obstetrical or gynecological care without prior authorization. This notice must be provided whenever the plan provides a participant with a Summary Plan Description (SPD) or other summary of benefits - starting no later than the first day of the first plan year beginning on or after Sept. 23, 2010.
• The Lifetime Limits Model Notice is to be used to provide written notice to participants informing them that a lifetime limit on the dollar value of all benefits no longer applies, and individuals whose coverage ended by reason of reaching a lifetime limit under the plan must be notified that they have 30 days in which to re-enroll. The notices and enrollment opportunities, similar to the Patient Protection Model Notice, must be provided by the first day of the first plan year beginning on or after Sept. 23, 2010. Note, however, that the notice can be included with a plan's enrollment materials (as opposed to in the SPD), provided the statement is prominent.
• The Grandfathered Health Plans Model Notice is sufficient for use by grandfathered plans to meet the requirement that they include a statement that describes the benefits provided, the fact that the plan or coverage considers itself grandfathered under PPACA, and includes contact information that a participant can use to ask questions or lodge a complaint.
• The Extension of Coverage For Adult Children Model Notice contains the requisite information that must be sent to plan participants that they have the opportunity to enroll their eligible adult children by the first day of the first plan year beginning on or after Sept. 23, 2010. If plans and insurers provide this notice at least 30 days in advance of this date, however, they can avoid having to administer retroactive enrollment. This notice may be included with a plan's enrollment materials, provided again that the disclosure is prominent.

• Click here to view the Patient Protection Model Notice.
• Click here to view the Lifetime Limits Model Notice.
• Click here to view the Grandfathered Health Plans Model Notice.
• Click here to view the Extension of Coverage For Adult Children Model Notice.

Source: Littler Mendelson

The U.S. DOL's EBSA announced its intention to withdraw the proposed regulation on the definition of a welfare benefit plan under the Employee Retirement Income Security Act (ERISA) from review by the Office of Management and Budget (OMB), effective July 30, 2010.

The regulation was submitted to the OMB for review before the enactment of the PPACA. The proposed regulation was intended to address issues relating to state health care efforts and their effect on the maintenance of ERISA-covered welfare plans. With the enactment of the PPACA, the department decided to review whether and to what extent further regulation in this area is necessary or appropriate in light of a national health care reform program.

Pension plans, including 401(k) plans, previously filed Schedule SSA with Form 5500 to report terminated participants who had not taken a distribution of their entire vested account balances. In a special edition of its Employee Plan News, the Internal Revenue Service (IRS) announced that the information will now be filed directly with the agency on Form 8955-SSA. The obligation to file the old form with Form 5500 was eliminated to help effectuate the all-electronic filing requirements for Form 5500 beginning with the 2009 plan year. According to the IRS, the required information for Form 8955-SSA will be similar, if not identical, to that used on the Schedule SSA, so plan administrators should collect the appropriate data and await further guidance. The new Form 8955-SSA has not yet been released, but the IRS states that it will have a "special due date," in 2011 to provide plan administrators with a reasonable amount of time to complete and file. Because Form 8955-SSA will be filed with the IRS, it will not go through the DOL's EFAST2 filing system.

Click here to view guidance from the IRS.