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  • Health Care Reform
  • November9th

    No Comments
  • September20th

    1 Comment

    Health care reform compliance deadlines are closing in on us.  Grandfathered and non-grandfathered plans must be compliant by the first plan year beginning on or after September 23, 2010.  The following are some  required notices that will have to be provided to plan participants.

    • Grandfathered Plan Status Notice. If maintaining grandfathered status, then participants are entitled to a notice of intent to maintain that status.
    • Special Enrollment Notices for Lifetime Limits. Individuals who have reached their lifetime limits under a plan are entitled to a special notice enrollment telling them that they are available for coverage. Since the lifetime limit is going away, these individuals will be able to have claims paid even though they may not be coming back on the plan.
    • Patient Protection Notice for Physician Choice.  This notice lets participants know that they are able to choose primary care physicians and that they can obtain OB/GYN care without previous approval.
    • Notice of Age 26 Coverage Extension.  Since coverage has expanded to individuals up to the age of 26, participants must be notified of this option along with being provided with enrollment instructions and rights.
    • Appeal Rights.  Since there is a possibility of adding outside appeals to non-grandfathered plans, participants must be informed about the new appeals rights. Also, participants should be reminded of the existing appeal rights under the plan.

    Even though the carrier might send these notices out to plan participants, it is solely the accountability of the company to make certain that notices are being sent out correctly.  You should contact your carrier and/or broker to make sure that your company is up to date with these new notice requirements.  In addition, given that these provisions are all are incorporated into ERISA, it is likely permissible that the normal ERISA notice rules apply (vis-a-vis form of notice), including any method the Department of Labor has previously approved for electronic delivery.

  • September20th

    No Comments

    On July 19, 2010, the U.S. Government issued interim final regulations that require all non-grandfathered health plans to cover preventative services without any cost-sharing for the plan participant when delivered by in-network providers.  The plan does not apply to grandfathered plans.  Cost-sharing refers to any co-pays, deductibles or coinsurance paid by the plan participant when receiving medical services.

    Although the proposed regulations do not specify the exact services that are to be covered at 100%, the regulations do provide for certain classifications that must be covered at 100%.  These include:

    • Evidence-based services that have an A or B rating in the current United States Preventative Services Task Force recommendations;
    • Routine immunizations for children, adolescents and adults as set forth by the Centers for Disease Control and Prevention, as applicable;
    • Screenings and preventive care for infants, children and adolescents; and
    • Screenings and preventive care for women.

    Although subject to change when the final regulations are issued, plan sponsors should know which services they will need to provide without cost sharing.  The rules are effective for all non-grandfathered plans for the first plan year beginning on or after September 23, 2010.  The United States Preventative Services Task Force website has more information on services with A and B ratings, immunizations, and screenings (http://www.healthcare.gov/center/regulations/prevention/recommendations.html).

    Based on most current health plan specifications, changing medical plan coverage to cover these services without cost sharing will not significantly increase the cost of providing health insurance.  For this reason, it is not a particularly compelling reason to maintain grandfathered status for your health plan unless there are other reasons to do so.  You should contact your insurance provider or broker to find out more information.

  • August24th

    No Comments

    Employers must revise their cafeteria plans for changes taking effect during and after 2011.  Effective for expenses incurred on or after Jan. 1, 2011, health flexible spending accounts (FSAs), health reimbursement arrangements (HRAs) and health savings accounts (HSAs) in cafeteria plans may no longer reimburse for over-the-counter (OTC) drugs unless they are prescribed.   Plan sponsors may also want to take the opportunity to amend cafeteria plans at the same time to adopt the new $2,500 limit on health FSAs, which takes effect Jan. 1, 2013 (but are not required to do so).  Therefore, any cafeteria plan that has been reimbursing OTC drugs will have to be amended by Dec. 31, prospectively, to eliminate reimbursement unless the OTC drug is prescribed for an individual.

  • June23rd

    No Comments

    Yesterday, the government issued further guidance on annual and lifetime limitations, the prohibition on rescissions of coverage, and pre-existing condition exclusions for children to age 19.

    Based on a recently released fact sheet (see http://healthreform.gov/newsroom/new_patients_bill_of_rights.html), this is what the regulations provide:

    Lifetime Limitations: The regulations prohibit the use of lifetime limits in all health plans the first day of the first plan year (in the individual market, policy year) beginning on or after September 23, 2010.

    Annual Limitations: The rules will phase out the use of annual dollar limits over the next three years until 2014. Plans will be allowed to set annual limits no lower than $750,000 plans the first day of the first plan year (in the individual market, policy year) beginning on or after September 23, 2010. This minimum limit will be raised to $1.25 million beginning September 23, 2011, and to $2 million beginning on September 23, 2012. These limits apply to all employer plans and all new individual market plans. For plans issued or renewed beginning January 1, 2014, all annual dollar limits on coverage of essential health benefits will be prohibited.

    It appears the regulations may provide some relief for plans to retain their current annual limits if it is necessary to prevent a significant loss of coverage or increase in premiums. In order to seek this relief, it appears some sort of application will need to be made to a government agency for approval. This may be applicable to certain limited benefits plans.

    Rescissions of Coverage: Under the regulations, insurers and plans will be prohibited from rescinding coverage – for individuals or groups of people – except in cases involving fraud or an intentional misrepresentation of material facts. Insurers and plans seeking to rescind coverage must provide at least 30 days advance notice to give people time to appeal. There are no exceptions to this policy.

    Pre-existing Condition Exclusions for Children to age 19: The new regulations will prohibit insurance plans from denying coverage to children based on a pre-existing conditions. This ban includes both benefit limitations (e.g., an insurer or employer health plan refusing to pay for chemotherapy for a child with cancer because the child had the cancer before getting insurance) and outright coverage denials (e.g., when the insurer refuses to offer a policy to the family for the child because of the child’s pre-existing medical condition).
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    We will update this information once the regulations have been properly reviewed.

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  • June16th

    2 Comments

    Final interim regulations on how a company can maintain a “grandfathered plan” were released on Monday afternoon.   Although I am still reviewing the new rules, I want to share with you some first impressions.
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    Based on a first reading of the new rules, it appears that a plan will lose grandfathered status if any of the following occur:

    · A change in carrier, regardless of whether the plan of benefits stays the same or is improved;

    · A reduction in any annual limits;

    · A change in the co-insurance percentage (the percentage of a particular charge that the employee must pay – e.g. the 8o%/20% split on hospital charges); or

    · A significant cut or reduction in benefits (eliminating coverage for AIDS or diabetes, for example).

    The new rules appear to allow some modest changes in plan features, to reflect increases in medical costs, including:

    · A change in the percentage split of the total premium between the employee and employer, as long as the employer percentage is not reduced by more than 5 percentage points;

    · Changes in deductibles that do not exceed “medical inflation” (described in the regulations as having averaged 4%-5%, annually in recent years), plus 15 percentage points;

    · Changes in co-pays that do not exceed the greater of $5 (adjusted for medical inflation) or medical inflation plus 15 percentage points.

    I continue to believe that grandfathered status is of limited value to most plans since most of the immediate reforms that employers will face either apply to grandfathered plans (e.g. lifetime limit restrictions and age 26 dependent coverage), or are already being complied with for the most part (preventive care coverage, physician choice, non-discrimination, etc.).  There also appears to be some leeway in the new rules that will allow employers that offer multiple plan options to change one option without affecting the grandfathered status of other options.

    I am reviewing the new rules and the above observations may change once I am able to study the regulations in depth.  I will provide you with a more detailed summary soon.

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