Notices Required by the Health Care Reform Act
November 18th, 2010
Under the Patient Protection and Affordable Care Act (PPACA), group health plans or issuers of insurance coverage (typically, insurers) must provide certain notices to health plan participants, and in some cases, to all employees. For most plans—those that are calendar year plans—these obligations must be met on or before January 1, 2011.
What Does This Mean for Employers?
As a practical matter, employers have the responsibility for providing notices that their group health plan is obligated to provide. Employers can, however, work with their insurers to determine which notices, if any, the insurers will be providing. If the insurers will be sending out one or more of the notices, employers will still need to make sure that the notices comply with the law. Employers also need to make sure that the notices will be distributed to the appropriate individuals. While coordinating with insurers may cut down on an employer’s administrative burden, ultimately, employers remain responsible for making sure that accurate notices for their group health plan are properly distributed. Therefore, employers should be in a position to draft and distribute the notices if necessary.
What Notices Are Required?
Notice of Grandfathered Plans
Grandfathered plans are those plans that are able to opt out of some of the PPACA requirements. To determine whether your plan is grandfathered for the upcoming calendar year, you should consult with your applicable insurer(s) and your legal counsel. Plans that wish to claim grandfathered status must, among other things, provide notice of the plan’s grandfathered status. The notice must be included in any plan materials provided to enrollees (during open enrollment or otherwise) or individuals who are already plan participants describing the benefits provided under the plan. Grandfathered plans do not have to provide all of the notices described below. They need only provide the notice of dependent coverage for children up to age 26and notice of lifetime essential benefit limit prohibition.
Notice of Dependent Coverage for Children Up to Age 26
- As of January 1, 2011, if a plan covers dependent children, it must cover such children up to the age of 26.
- A notice of this right must be provided, along with a 30-day window of opportunity for children who had previously aged out of coverage or who did not enroll because they were too old under the prior plan, to elect coverage. The parent of a child who makes such an election is also entitled to enroll if the parent is otherwise eligible for enrollment.
- The Department of Labor (DOL) has a model notice available for use that can be found on its website. The notice will need to be tailored for an employer’s individual use and to provide for the opportunity for a child’s parent to elect enrollment if the child does.
- The notice must be sent to all employees, not just current plan participants. The notice may accompany other notices or open enrollment materials, but it must be prominent.
- Because the right to coverage for those electing coverage must begin January 1, 2011, the notice should be sent out by December 1, 2010, unless the insurer sets a different timetable for enrollment. Employers should coordinate the timing of the election period with insurers as soon as possible to avoid inconsistent notices and possible missed opportunities for enrollment.
Notice of Lifetime Essential Benefit Limit Prohibition
- As of January 1, 2011, plans are prohibited from having any lifetime limits on “essential benefits.”
- Plan participants who previously maxed out on essential benefits must be given a 30-day window of opportunity to enroll in the plan.
- DOL also has a model notice available for use, which can be found on its website. The notice should be revised to make reference to “essential benefits,” not just “benefits.” Lifetime limit notices will also need to be tailored for an employer’s individual use.
- The notice should be sent to all employees.
- The notice may accompany other notices or open enrollment materials, but it must be prominent.
- Because the right to coverage for those electing coverage must begin January 1, 2011, the notice should be sent out by December 1, 2010,unless the insurer sets a different timetable for enrollment. Employers should coordinate the timing of the election period with insurers as soon as possible to avoid inconsistent notices and possible missed opportunities for enrollment.
Notice of Participants’ Rights
- Notice must be given that a plan participant has the right to choose a primary care provider or pediatrician when the plan requires participants to designate a primary care physician, and the right to obtain obstetrical or gynecological care without prior authorization.
- Model DOL language can be found on its website.
- These notices must be provided whenever the plan provides an enrollee or a plan participant with a summary plan description or other similar description of benefits under the plan.
- These notices do not need to be given by grandfathered plans.
Employer Action Items
- Employers should immediately determine whether its plan(s) will be grandfathered by contacting applicable insurer(s) and consulting legal counsel.
- Employers should promptly begin drafting the required notices if they determine that the insurers will not be doing so or if there is concern that the insurers’ notice may be legally insufficient. Consulting with legal counsel can ensure that the notices sent out are appropriately tailored to the employer’s circumstances and fulfill statutory obligations.
Filed Under: Government Law