Compliance

The Patient Protection and Affordable Care Act, along with the Health Care and Education Reconciliation Act of 2010, make up the new health care reform law. This legislation creates a number of issues for employers that sponsor group health plans. The changes are intended to be implemented over the next several years, but employers need to be aware of some impending plan design issues for the upcoming plan year. These issues include:
  • Extended dependent coverage for adult children up to age 26
  • Restrictions on annual benefit limits and elimination of lifetime limits
  • Elimination of pre-existing condition exclusions for children
  • Prohibitions on rescission of health care coverage
  • Limits on reimbursing over-the-counter medications
  • Compliance with nondiscrimination rules for fully-insured plans

The application of the health care reform provisions to certain businesses will depend on a number of factors, such as size and types of coverage provided. Plan sponsors should review their plans to determine which of the following steps they need to take in the next year:

  • Review applicable effective dates for grandfathered and non-grandfathered plans.
  • Apply for federal early retiree reinsurance program if employer provides retiree health coverage.
  • Amend cafeteria plans that offer dependent coverage for provision of dependent coverage up to age 26 by December 31, 2010.
  • Amend all plans to provide for the following changes:
    • No pre-existing condition exclusions for children under age 19
    • No lifetime dollar limits on essential benefits
    • Restricted annual dollar limits on essential benefits
    • No rescissions except in case of fraud or intentional material misrepresentation
  • Ensure that new plans include the following plan design elements:
    • Coverage for certain preventive health services without cost-sharing requirements
    • Ability for each participant, beneficiary and enrollee to designate any available participating primary care provider (including a pediatrician for children)
    • Coverage of emergency services without preauthorization or increased cost-sharing for in or out of network
    • No requirements for preauthorization or referral for obstetrical/gynecological care
    • Eligibility and benefits provisions that do not discriminate in favor of highly compensated individuals
  • For new plans, implement an effective appeals process for appeals of coverage determinations and claims.
  • Effective January 1, 2011, require prescriptions for reimbursement of over-the-counter medicine and drugs (except insulin).

Model Consulting can assist you with the necessary changes to your plans to keep you in compliance with the new law. Please contact us today with any questions.