Frequently Asked Questions

The questions below have been posed to us by our clients since the passage of the PPACA in March, 2010. We will continue to update this page with additional questions and answers over time.

Automatic Enrollment
Dental and Vision
Dependent Care
Early Retiree Program
Emergency Services
Essential Benefits
Grandfathered Status
Health Exchange Program and Voucher System
Non-Essential Benefits
Over-The-Counter Changes
Rescissions
Other/Miscellaneous

Automatic Enrollment

1. Will the automatic enrollment provisions affect my plan? All employers with over 200 full-time employees that offer at least one health benefits plan are required to automatically enroll new full-time employees and re-enroll current employees in one of the plan options offered. Employers can have a waiting period of up to 90 days.

Employers must provide adequate notice to their employees of their enrollment (to be defined by regulations). Employers must allow their employees the opportunity to opt-out of any coverage they were automatically enrolled in.

This provision applied to both grandfathered and non-grandfathered plans. The effective date will be determined by guidance from HHS (Health & Human Services).

Dental and Vision

1. Is dental and vision included. In some preliminary information from HHS, it appears they would not be included. A few articles from the ADA website also appear to be indicating the exclusion of dental coverage. However, some information from the National Business Group on Health indicates that children to age 26 should be offered coverage for similar benefits offered other covered members, including dental and vision.

Trustmark believes that except where explicitly specified, the provisions for PPACA do not apply to HIPAA “excepted benefits”. HIPAA’s definition of excepted benefits includes limited scope dental and vision benefits when such benefits are offered separately from the plan’s major medical benefits (aka: “stand alone” dental and vision). The interim final rule for group health plans and health insurance coverage relating to status as a grandfathered health plan, specifically state that the healthcare reform provisions in Title I of PPACA are not intended to apply to excepted benefits.

A few sections of PPACA do reference stand alone dental and vision benefits. For example, Section 1311 of the PPACA allows the newly created state exchanges to offer stand alone dental plans in the exchange if the dental plan provides pediatric dental benefits (as defined in Section 1302).

One of the categories of “essential health benefits” is pediatric service including oral and vision care, but the details of these services are yet to be defined.

Additionally, the PPACA imposes a 40% excise tax on health insurers and health plan administrators for coverage that exceeds certain thresholds starting in 2018. Employer-sponsored coverage subject to the 40% excise tax in PPACA will be broadly defined to include dental and vision coverage.

It is correct that the interim final rule for dependent coverage for children to age 26 prohibits plans from varying the terms of the plan based on age up to age 26. For example, a plan may not charge an additional premium or surcharge, or offer different benefit options, with respect to dependent children between age 19 and 26.

Dependent Care

1. What if a dependent who is under age 26 and was terminated from a plan because they reached/exceeded their lifetime maximum on the plan? Can they be re-instated? How about adults, over 26, who were removed for the same reason?

Individuals who reached a lifetime limit prior to a plan/policy year on or after 9/23/10 and are still otherwise eligible for coverage must be provided a notice that the lifetime limit no longer applies. If such individuals are no longer enrolled, then they must be provided with a notice and enrollment opportunity no later than the first of the first plan year on or after 9/23/10. The enrollment opportunity must last for at least 30 days and, in the group market, anyone enrolled under this opportunity is treated as a “special enrollee” and must have the opportunity to enroll in any benefits package available to similarly situated individuals. The notice may be provided to an employee on behalf of the employee’s dependent.      

2. Young Adult Question for Dep. Audits – a “certification form” has been created that must be completed for young adults age 19 to 26. The question is whether the age range is correct. Young adults/kids could be working full-time and have benefits prior to age 19. Today, the definition of a child typically includes language indicating that they cannot be working full-time except for summer vacations. Do we need to verify that children are not working beginning at a younger age?

Section 2714 of the PPACA requires self-funded and insured plans (group and individual) that provide dependent coverage of children to cover children to age 26. This requirement is effective on the first day of the plan year that is on or after 9/23/10.

A plan or insurer may not define a dependent child for purposes of eligibility other than in terms of the relationship between the child and the participant. Conditions of financial dependency, residency, student status, marital status, employment and availability of other coverage (except as allowed for group grandfathered plans as described below) are not permitted.

Section 1251 of the PPACA applies this requirement to grandfathered plans, but group grandfathered plans may decline to extend coverage to an adult child who is eligible to enroll in another employer-sponsored health plan other than that of a parent. This limited exception for group-grandfathered plans expires for plan years beginning on or after January 1, 2014.

3. The Affordable Care Act is now encouraging bridging the gap between May and when plans must provide dependent care coverage. The ACA references age 27. Is coverage now going to be through age 26 rather than to age 26?

Bridging the gap is encouraged but not required.

The legislative language states “a group health plan and a health insurance issuer offering group or individual health insurance coverage that provides dependent coverage of children shall continue to make such coverage available for an adult child until the child turns 26 years of age.”

The following offers additional guidance from the final interim rules issued on May 10, 2010:

  • The self-funded plan or individual or group insurer must provide an enrollment opportunity that continues for at least 30 days to dependent children who lost coverage, were denied coverage, or were not eligible for coverage, because of their age prior to the first day of the first plan year beginning on or after Sept. 23, 2010. 
  • Written notice of the opportunity to enroll must be provided not later than the first day of the plan year beginning on or after Sept. 23, 2010. 
  • Coverage must take effect not later than the first day of the first plan year beginning on or after Sept. 23, 2010.
  • After this first year where notice and a 30-day enrollment opportunity is required, the plan may revert back to its normal enrollment opportunities under the plan.

Although the law requires coverage to be provided to dependent children only to age 26,
Section 1004(d) of the law and IRS Notice 2010-38 provide that employers may exclude from the employee’s income the value of the employer provided coverage for an employee’s child who has not attained age 27 as of the end of the taxable year. Therefore, for example, if a child turns 26 in March, health benefits can be excluded from income through December 31st. 

4. Also, will the amendments allow a currently non-covered dependent to become eligible immediately for benefits?

A child whose coverage ended or who was denied (or was not eligible for) coverage because the plan did not previously offer coverage to age 26, and who is otherwise eligible for coverage as of the first day of the first plan year beginning on or after September 23, 2010 must be given the opportunity to enroll in the plan. Written notice of this opportunity must be provided and the enrollment period must continue for at least 30 days. Coverage of a child enrolled through this enrollment opportunity must take effect not later than the first day of the first plan year beginning on or after September 23, 2010.  

5. Does the 30 days to enroll requirement, for dependent coverage open enrollment, pertain to all plans (grandfathered and non-grandfathered)? Does it pertain to plans that currently have an open enrollment period?

Yes, the 30 days open enrollment requirement for dependents to age 26 pertains to all plans (grandfathered and non-grandfathered) and it does pertain to plan that have an open enrollment period. However, the enrollment period for the newly eligible dependents may coincide with the standard open enrollment as long as the enrollment period for the newly eligible dependents is at least 30 days, notice of the right to enroll the newly eligible dependents is given and the effective date of coverage for such dependents is not later than the first day of the plan year on or after 9/23/10.

Early Retiree Program

1. Early Retiree Reimbursement Program - if both spouses work for the school district, they must take employee only coverage. Therefore, there is no dependent status. The interim regulations refer to early retirees and their dependents, no matter their age. Should the wife be considered a “dependent” for purposes of the reimbursement program? Or, since she is covered separately is she excluded?

The Regulations regarding the Early Retiree Reimbursement Program define an Early Retiree as follow:

Early retiree means a plan participant who is age 55 and older who is enrolled for health benefits in a certified employment-based plan, who is not eligible for coverage under title XVIII of the Act, and who is not an active employee of an employer maintaining, or currently contributing to, the employment-based plan or any employer that has made substantial contributions to fund such plan. In this part, the term early retiree also includes enrolled spouse, surviving spouse, and dependents of such individuals. The determination of whether an individual is not an active employee is made by the sponsor in accordance with the rules of its plan. For purposes of this subpart, however, an individual is presumed to be an active employee if, under the Medicare Secondary Payer rules in 42 CFR 411.104 and related guidance published by the Centers for Medicare & Medicaid Services, the person is considered to be receiving coverage by reason of current employment status. This presumption applies whether or not the Medicare Secondary Payer rules actually apply to the sponsor. For this purpose, a sponsor may also treat a person receiving coverage under its employment-based plan as a dependent in accordance with the rules of its plan, regardless of whether that individual is considered a dependent for Federal or state tax purposes. For purposes of this definition of early retiree, an employer maintaining, or currently contributing to, the employment-based plan or any employer that has made substantial contributions to fund such plan, mean a plan sponsor (as defined in this section).

As the definition specifically indicated “enrolled” dependent and the person is considered a dependent “in accordance with the rules of the plan” it appears that, as the dependent is not permitted to enroll for coverage as a dependent, he or she could not be considered a dependent when considering reimbursable expenses for the Program.   

2. What is the Early Retiree Reinsurance program under the PPACA?

Section 1102 of the PPACA provides for an Early Retiree Reinsurance Program. The Department of Health and Human Services (HHS) is tasked with establishing a temporary reinsurance program to reimburse employment-based group health plans (both insured and self-funded) a portion of the cost of providing health benefits to retirees (and to eligible dependents of retirees) between age 55 to 64 who are not actively at work and not Medicare eligible. The program is effective on June 1, 2010 and terminates January 1, 2014 (or sooner if the federal dollars available are exhausted). 

HIPAA “excepted benefits” (disability income, accident only, specified disease, long-term care, hospital indemnity, etc.) are excluded from the reinsurance program and payments under these plans may not be included in the cost of a claim. 

3.  How does a plan participate in the program?

The plan sponsor (usually the employer) applies for, and receives the reimbursement under, the early retiree reinsurance program. The plan sponsor must submit an application to HHS in order for the health plan it sponsors to be “certified” for participation under the program. HHS has not yet published this application, although it is expected by June 1. At a minimum, the following will be required:

  1. A description of the programs and procedures that have generated or have the potential to generate cost-savings with respect to plan participants with chronic and high-cost conditions. “Chronic and high-cost conditions” mean those conditions for which $15,000 or more in claims are likely to be incurred by a single participant in a plan year.  
  2. The plan sponsor must:
    1. Agree to make information and records available to HHS upon their request and to retain such information for at least six years after the expiration of the plan year in which costs were incurred.
    2. Have a written agreement with its health insurer (if the plan is insured) or the group health plan (if the plan is self-funded) regarding the right of the insurer or health plan to disclose information, including Protected Health Information (PHI), to HHS on behalf of the plan sponsor for purposes of the reinsurance program.
    3. Ensure it has policies and procedures in place to protect against fraud, waste and abuse under the reinsurance program and be able to produce and substantiate such policies/procedures.
    4. Provide a summary indicating how the plan sponsor will use any reimbursement received under the program to reduce premium contributions and cost-sharing requirements (deductibles, copays, etc).  Proceeds under this program may not be used as general revenue for the plan sponsor.

4. How will HHS process the applications?

Applications will be processed in the order in which they are received. An application that does not meet the requirements will be denied, and the applicant will have to submit a new application. A separate application for each year for a given plan is not required, but information for the start and end month and day of the sponsor’s plan year must be included. A separate application is required for different plans. 

5. How much will the plan be reimbursed?

For each early retiree (or their dependent) enrolled in a certified plan in a plan year, the plan sponsor receives reimbursement of 80 percent of the costs for health benefits (net discounts, rebates, and similar consideration) for cumulative claim amounts between the “cost threshold” and the “cost limit” that are incurred during the plan year by a single early retiree (or their dependent) and are paid by the plan, insurer and/or early retiree.   The cost threshold and cost limit for plan years that begin before October 1, 2011 is $15,000 and $90,000, respectively. These amounts will be adjusted by a percentage of CPI thereafter. 

For a certified plan that has a plan year that begins before June 1, 2010, with respect to claims incurred before June 1, 2010, the amount of such claims up to $15,000 count towards cost threshold and cost limit. The amount of claims incurred before June 1, 2010 that exceed $15,000 are not eligible for reimbursement and do not count toward the cost limit. The reinsurance amount to be paid is based only on claims incurred on and after June 1, 2010 that fall between the cost threshold and the cost limit.

6. For what can the reimbursements be used?

The reimbursements from HHS may be used for the following:

  • To reduce the sponsor’s health benefit premiums or health benefit costs;
  • To reduce health benefit premium contributions, copayments, deductibles, coinsurance, or other-out-of-pocket costs for plan participants; or
  • To reduce any combination of these costs.

Reimbursements cannot be used as general revenue. 

7. How does a plan submit a claim to HHS?

Claims for reimbursement may not be submitted until claims paid for the early retiree have exceeded the applicable cost threshold for the plan year for the early retiree.  Evidence of payment must be submitted, and if the sponsor seeks reimbursement of any portion paid by the early retiree, then evidence of the early retiree’s portion of the payment must also be submitted. The rule describes the process for appealing in the event that HHS denies a request for reimbursement.

8. Can a plan sponsor appeal denial of a reimbursement request?

Yes. A sponsor can appeal the partial or complete denial of a reimbursement request.  The appeal must be within 15 calendar days of receiving an adverse reimbursement determination, and it is a one-step appeal directly to the Secretary of HHS. Plan sponsors may not appeal denials based on the unavailability of funding for the program. 

9. If requested, what support can CoreSource provide for clients and plans wishing to make participate in the Program?

CoreSource can provide support in both the application and reimbursement filing process, as described below. 

Application Process

  • CoreSource will provide a summary of programs that have generated, or had the potential to generate cost savings for individuals with high-cost conditions.
  • CoreSource will provide a description of the policies and procedures utilized to detect and reduce waste, fraud and abuse.
  • CoreSource will provide claim details for individuals meeting the eligibility criteria.  From this information, clients will need to calculate the projected reimbursement, as required in the application process.
  • As more specific information regarding the application process is released by the HHS, CoreSource will review and evaluate application requirements and extend support where possible

Reimbursement Filing Process

  • CoreSource will provide the needed claims detail for claims processed by the Plan Administrator, for individuals eligible for reimbursement to be used by clients for submission to HHS.  Specific information regarding the detail needed and format required has not yet been identified.
  • Depending on the PBM being utilized and the technologies in place, CoreSource may be able to aggregate medical and prescription drug data for the client.
  • CoreSource will provide support should HHS audit a client’s reimbursement request or require additional information.

10. Will any contracts need to be amended to provide the support services mentioned?  Will any fees apply?

It is difficult to make a determination until the specifics of what will be required has been released by HHS.  Once specific application and reimbursement submission requirements have been released CoreSource will evaluate both client agreements and fees to determine if any modifications are needed. 

Emergency Services

1. What is meant by “restrictions on coverage limitations for emergency services”?

These restrictions DO NOT APPLY to grandfathered plans. All non-grandfathered self-insured health plans covering emergency department services, must cover emergency services:

  1. Without the need for any prior-authorization determination
  2. Whether the provider is a participating provider
  3. If emergency services are provided:
    1. Services will be provided without imposing any requirement for prior authorization of services or limitation on coverage where the provider does not have a contractual relationship with the plan for the providing of services that is more restrictive than the requirements or limitations that apply to providers who do have a contractual relationship with the plan; and
    2. If services are provided out-of-network, the cost-sharing requirement is the same requirement that would apply if such services were provided in-network,
    3. Without regard to any other term or condition of coverage.

2. We have about 20% of our business as hospitals. This means that we administer the health plan for the employees of the hospital and their families. Traditionally these hospitals have offered a higher level of benefits when participants utilize their own facility for services. These plans have a “domestic” level of coverage as well as a network and non-network level.

The issue that has come up is in regard to preventive and emergency care. In regard to emergency, can they continue to offer a higher benefit level at the domestic level? So the network level and non-network may pay emergencies at 90%. They would like to cover emergencies at their own facility at 100%.

In regard to preventive, can they designate that certain services can only be provided at their facilities. In other words, can they designate that mammograms will be paid in full at their facility only?

Clearly both of these situations would apply to non-grandfathered plans.

The Interim Final Rules (IFRs) on both emergency services and preventive services address benefits only in the context of in-network vs. out-of-network service providers. With respect to emergency services, the objective, based on the preamble to the IFR, is to ensure that participants are able to access emergency care when they need it without penalty for obtaining such services out-of-network. In consideration of this, the plan’s payment of a higher percentage for a domestic level of coverage is arguably counter to objective stated in the preamble to the IFR. In contrast, with respect to preventive services, the objective is to encourage individuals to see such services for early detection and overall better health. Classifying the domestic level as “in-network” for this limited purpose is arguably not counter to this objective. CoreSource may not provide legal advice. The employer/plan is responsible for ensuring that their benefit design is in compliance with PPACA and the accompanying IFRs and should consult with their legal adviser on these points.   

Essential Benefits

1. What is meant by annual limits on essential services?

For plan years beginning on or after 9/23/10, self-insured health plans (and all other group health plans) and health insurance providers are not restricted from placing annual per-beneficiary limits on non-essential health benefits to the extent that such limits are otherwise permitted under Federal or State law.

The specific definition of “essential benefits” will be forthcoming in regulations, but will include the following general categories:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care

2. If a school district decides to move to a HCR compliant plan effective 1/1/11, however, they do have the exemption from the MHP in place from last year, does this mean that in order to be compliant with HCR they would need to remove the annual dollar limitations on the mental health benefits as well (if they exist)? Under the HCR law, it states that day limits are allowed but no dollar limits are allowed. For the school districts, does this statement refer to mental health benefits? It appears that this question regarding mental health annual limits as stated above would apply to grandfathered plans as well, correct?

Yes, because mental health is listed in PPACA as one of the “essential health benefits”, to the extent that the plan provides any coverage for mental health services, the plan may not impose a lifetime dollar limit or annual dollar limit (except for the tiered limits of $750K, $1.25M and $2M identified in the “omnibus” regulation) on such services. This is the case for both grandfathered and non-grandfathered group health plans.

3. With regards to benefits with annual limits, included in the list of essential health services are rehabilitative and facilitative services and devices; would this include any annual plan limits on private duty nursing, extended care facilities and home health care? What if the plan has visit/day limits for these services and not dollar value limits? Please note this is a grandfathered plan.

PPACA prohibits lifetime limits and imposes restrictions on annual limits on the dollar value of essential health benefits for all self-funded and insured group health plans and individual health plans, both grandfathered and non-grandfathered. The Interim Final Rule published by the Department of Health and Human Services (HHS) regarding lifetime and annual limits does not further define “essential health benefits”. Until such time, the federal agencies will take into account “good faith efforts to comply with a reasonable interpretation of the term essential health benefits.”

To date, there has been no indication that visit/day limits are prohibited.

4. Plans must remove annual limits effective 1/1/11. Most of our clients have an annual limit on wellness benefits. Plans are not required to cover wellness benefits on an unlimited basis until 2014 or 2011 if they are not grandfathered. Can a plan keep their annual max on wellness benefits?

No plan (whether grandfathered or not) may impose an annual dollar maximum on in-network preventive benefits and then pay / consider $0 after that limit is exhausted. However, a grandfathered plan may have an annual dollar maximum on preventive benefits if the plan then defaults to a deductible / coinsurance benefit after the dollar maximum is exhausted.

For example: A grandfathered plan could provide that in-network preventive services are covered at 100% (no cost-share) to $200.00, and charges for preventive services after this amount are subject to deductible and coinsurance. 
 
Non-grandfathered plans must pay in-network preventive services at 100% - no dollar limits or cost-share requirements are permitted.
 
PPACA imposes restrictions on annual limits on the dollar value of “essential health benefits” for both grandfathered and non-grandfathered self-funded plans beginning on September 23, 2010. Although the Department of Health and Human Services (HHS) has not yet defined the phrase “essential health benefits” as required by the law, PPACA requires at a minimum that preventive and wellness services must be included in the definition. 
 
Annual limits on the dollar value of benefits that are essential health benefits (which includes preventive and wellness services) may not be less than:
 
a. $750,000 for plan years beginning on or after 9/23/10;
b. $1.25 million for plan years beginning on or after 9/23/11;
c. $2 million for plan years beginning on or after 9/23/12;
d. No annual dollar limits on essential health benefits are permitted on plan years beginning on or after 1/1/14. 
 
But, for grandfathered plans, these benefits for preventive services are not required to be “first dollar.”

5. I have a client who excludes the coverage of the pregnancy of a dependent child. Will this exclusion still be permitted under HCR? Would pregnancy benefits be considered essential benefits?
The plan may retain this exclusion, at least until 2014.  Maternity and newborn care is one of the "essential health benefits," however it is still open for interpretation as to whether or not self-funded plans will need to provide essential health benefits in order to constitute "minimum essential coverage" in 2014 and further unknown whether maternity benefits need to be extended to dependent children in 2014 but, for now, this exclusion appears permissible.
 
6. I have a client that renewed on 11/1/09 and at that time decided to exclude their mental health/chemo dependent benefits altogether. HCR includes mental health treatment as an essential benefit. Since they did not cover mental/health chemo dependent benefits as of 3/23/10 are they required to include it when their plan renews 11/1/10?
No, the plan may retain this exclusion, at least until 2014. Mental health services are one of the "essential health benefits," however it is still open for interpretation as to whether or not self-funded plans will need to provide essential health benefits in order to constitute "minimum essential coverage" in 2014.  For now, this exclusion appears permissible.  

7. As it relates to Essential Benefits what is the best way to determine if a dental plan is considered a Stand Alone plan or part of the medical plan? If a plan offers Medical and Dental and does not charge the participant for the dental coverage, would it be appropriate to recommend removing the dental maximums for dependent coverage?
In order for a dental plan to be a HIPAA-excepted benefit that is exempt from the market reform provisions of PPACA, the dental plan must be "offered separately". This might be demonstrated by a requirement that the enrollee make a separate election to be covered, or not covered, for dental benefits. If the dental benefits are not "offered separately", then it is appropriate to look at the definition of Essential Health Benefits, which vaguely address "pediatric services, including oral and vision care" as one of the "essential health benefits.” There has not been further definition provided to date relating to what "oral and vision care" means, or the "pediatric" age group. A conservative approach would be to eliminate any dollar maximum applied to dental benefits for children. However the plan should consult with their legal advisor.

8. When removing the overall Lifetime maximum from essential benefits, most of our clients maintaining grandfathered status are adding a calendar year maximum equal to or greater than the removed lifetime maximum. What would be the requirements for this calendar year maximum to be compliant with HCR? Can essential benefits and non-essential benefits be combined for this maximum? If not, can separate maximums be applied to each (essential and non-essential)?
The newly imposed overall annual dollar maximum may not be less than the lifetime dollar maximum in place on 3/23/10.  So, for example, if on 3/22/10, the plan had an overall lifetime dollar maximum of $2 million, the newly imposed annual dollar maximum may not be less than $2 million.  If the plan were to impose an annual dollar max below this amount, they would lose grandfathered status in this example.
 
Separately, any overall annual dollar maximum imposed on essential health benefits may not be less than: 
 
a) $750k for plan year on or after 9/23/10
b) $1.25m for plan year on or after 9/23/11
c) $2m for plan year on or after 9/23/12
d) And no annual dollar limits are allowed for plan years on or after 1/1/2014.
 
For example, if on 3/23/10, the plan had an overall lifetime dollar limit of $500,000, the newly imposed annual dollar maximum may not be less than $750k for the 2010-2011 plan year on essential health benefits.
 
However the Dept. of Health and Human Services recently published guidance regarding a "waiver" process with respect to the annual dollar limits on essential health benefits.  A plan may apply (annually) for a waiver from the $750k, $1.25m, $2m annual dollar limit requirements if the plan can demonstrate that these dollar thresholds would result in a significant decrease in access to benefits or a significant increase in premiums.  HHS may accept or deny such requests.

Grandfathered Status

1. One of my clients has a Trustmark fully insured executive reimbursement plan. Any out of network claims for top executives (highly compensated) and family members are paid at the out-of-network benefit level through the self-funded plan and then the difference between out-of-network and in-network is paid through the Executive Reimbursement Plan. Their self-funded plan is not grandfathered effective 6/1.

How does below impact their Executive Reimbursement Plan?

Applies to New Group Health Plans Only

  • Non-Discrimination – Plans cannot discriminate in favor of highly compensated individuals with respect to eligibility or benefits

The self-funded plan administered by CoreSource and the executive reimbursement plan fully insured by Trustmark are 2 separate plans and grandfathered status is evaluated separately. Meaning just because the self-funded plan loses grandfathered status does not mean that the fully insured plan also loses grandfathered status.

If the fully insured plan is grandfathered, it may continue to discriminate in favor of highly compensated individuals for as long as it remains grandfathered. If the fully insured plan loses grandfathered status, it will be subject to the §105(h) non-discrimination rules. 

2. I have a client who must implement mental health parity in August. If they decide not to cover mental health treatment, will they lose their grandfathered status under HCR?

Elimination of all (or substantially all) benefits to diagnose or treat a particular condition will result in a group health plan losing its grandfathered status. Therefore if your client covered mental health treatment on 3/23/10, and drops coverage of mental health treatment in August, it will lose its grandfathered status. 

3. Groups can lose their grandfathered status if there is a decrease in the employer’s contribution rate of more than 5% of the contribution rate as of 3/23/10.  Does that contribution include what the employer made towards dependent coverage or only the employer contribution for employee coverage?

A group health plan ceases to be a grandfathered health plan if the employer or employee organization decreases its contribution rate based on cost of coverage by more than 5% below the contribution rate on 3/23/10. The interim final rule defines “contribution rate based on cost of coverage” as the “amount of contributions made by an employer or employee organization compared to the total cost of coverage, expressed as a percentage’. It further states that “in case of a self-insured plan, contributions by an employer or employee organization are equal to the total cost of coverage minus the employee contributions towards the total cost of coverage’. Based on these definitions, any contribution an employer makes towards an employee’s or dependent’s health care coverage would be included in the 5%. 

4. Would a self-funded group who gave a 5% contribution increase on their 5/1/10 anniversary date be in jeopardy of losing their grandfathered status?

No.

5. A client is inquiring as to the possibility of amending the ending date of their plan year from 12/31/10 to 8/30/11. The amendment would have to be placed into effect 9/1/10 prior to the 9/23/10 reform compliance date. This group has a limited medical plan that w/o extension will have to go away 1/1/11. They do not care about losing their grandfather status and would like to retain their current calendar year benefits and open enrollment period of 10/10. This group does not have any stop-loss coverage. Ultimately unless the reform language is changed again this plan will have to go away after this extension on 9/1/11. They are looking to extend their plan for an additional 9 months before having to dissolve it. Are there any reasons why this could not be done?

The client should seek advice from their legal counsel. Although the term “plan year” does not appear to be defined in PPACA or regulations promulgated under PPACA to date, the definition of “year” in common usage equates to 365 calendar days and the term “plan year” is used in the context of employee benefits is commonly understood to be a 365 calendar day period.

6. A client currently has a plan with a $10,000 annual limit that will no longer be allowed effective 11/1/10. Employers and carriers offering “mini-med” plans are moving to medical indemnity benefit plans. These plans pay a fixed dollar amount for specific services covered under the plan. Please confirm that grandfathered plans will be able to modify the current limited medical benefit design to be an indemnity medical benefit plan design without jeopardy to the plan’s grandfathered status. Or could the client change their plan year to 9/1 for 2010?

There are a couple if issues to consider:
First, one of the enumerated HIPAA excepted benefits is: “hospital indemnity or other fixed indemnity insurance”. There is still ambiguity regarding the extent to which HIPAA “excepted benefits” are subject to PPACA. In the “supplementary information” section of the interim final rule on “grandfathered health plans”, HHS appears to conclude that HIPAA excepted benefits are not subject to the coverage mandate provisions of PPACA such as lifetime/annual dollar limits, preventive care, pre-existing condition exclusion, dependent coverage to age 26, etc. HHS further “encourages” the states not to enforce these provisions of PPACA against excepted benefits. We can provide a copy of these interim final rules to the client for them to review with their legal adviser.

Second, but related to the discussion above, the interim final regulations issued on grandfathering describe the specific triggers that cause a plan to lose grandfather status. These triggers are listed below and the plan would need to determine whether any of these triggers would occur if the plan were to convert from a “mini-med” to a fixed indemnity policy:

  • Any increase in the member’s coinsurance percentage
  • Any increase in the deductible or out-of-pocket limit that exceeds “medical inflation” plus 15 percentage points, based on the level in effect on March 23,2010
  • Any increase in copays above the level in effect on March 23,2010 by an amount that exceeds the greater of a) the sum of medical inflation plus 15 percent, or b)$5 time medical inflation plus $5
  • Any decrease in the employer’s contribution rate of more than 5 percent of the contribution rate as of March 23,2010
  • Any elimination of all or substantially all benefits to diagnose or treat a particular condition (or the elimination of benefits for any “necessary element” to diagnose or treat a condition)
  • Employer-driven transferring of employees from one plan to another, if the plan to which the employees are transferred results in the occurrence of any of the above bullets and there was no “bona fide employment-based reason” to transfer the employees (note: changing the terms or cost of coverage is not a bona fide employment-based reason)
  • A merger, acquisition, or similar business restructuring, if the principal purpose of the action is to cover new individuals under the grandfathered plan
  • Any change in insurance carriers
  • The imposition of any new, or decrease to an existing, annual limit

It is up to the plan whether they would like to change their plan year to 9/1 for 2010.   
      
7. A prospect client is with the Blues, fully insured, and wants to come back to self insured for an August 1, 2010 start. The client wants to cut back and/or eliminate fertility coverage. If the client does that in August will they be grandfathered? If so, since it’s prior to the September 23, 2010 date, will that be permanent?

For purposes of this response, it is presumed that the plan was in effect on March 23, 2010 and the plan year starts on August 1st and ends on July 31st.

Converting from a fully insured to a self-funded plan is not one of the triggers listed in the interim final rule that causes a plan to lose grandfathered status as long as none of the other triggers for losing grandfathered status occurs (note: in contrast, moving from one insurer to another does trigger the loss of grandfathered status). However, the elimination or “substantial elimination” of a benefit to diagnose or treat a particular condition (or the elimination of benefits for any “necessary element” to diagnose or treat a condition) does jeopardize grandfathered status.

If the client reduces or eliminates a fertility benefit on August 1, 2010, then this may be considered the elimination or substantial elimination of a benefit to diagnose or treat a particular condition. In which case, the plan would be subject to all of the mandated coverage provisions of PPACA that apply to non-grandfathered plans effective August 1, 2011 (as this is the first plan year on or after 9/23/10).

8. The employer plan does not have a separate copay for ER admissions, nor a separate per admission hospital copay on March 23, 2010. If the plan was to add $50 ER copay and a $150 hospital copay per admission can this done and maintain grandfathered status? The interim guidelines mention increases in copays cannot be greater than 4% (medical inflation) plus 15 percentage points. If there are currently no copays in place for these two charges, what is the max the plan can put in and stay compliant?

Under the interim final rule, a plan will lose its grandfathered status if is increases co-payments beyond a permitted amount. The increase to a co-payment is measured from 3/23/10 and may not exceed the greater of:

  • Medical inflation (as defined below) on $5.00, plus $5.00 (i.e. $5.00 x medical inflation, plus  $5.00), or
  • Medical inflation (as defined below) plus 15 percent

It appears that the plan would need to us “$0.00” as the starting point for applying the above formulas and therefore could not impose a copay greater than $5.00 increased by medical inflation if it wanted to retain grandfathered status.

9. Does changing stop-loss coverage make a plan lose grandfathered status?

No. The recently released regulations regarding grandfather status mention the following items that would cause a plan to lose grandfathered status:

  • Any increase in coinsurance percentage
  • Any increase in the deductible or out-of-pocket limit that exceeds “medical inflation” plus 15 percentage points. Medical inflation is defined by referring to the overall medical care component of the Consumer Price Index (CPI).

Any increase in copays above the level in effect on March 23, 2010 by an amount that exceeds the greater of the sum of medical inflation plus 15 percent, or $5.00 times medical inflation plus $5.00.

  • Any decrease in the employer’s contribution rate of more than 5 percent of the contribution rate as of March 23,2010
  • Any elimination of all or substantially all benefits to diagnose or treat a particular condition (or the elimination of benefits for any “necessary element” to diagnose or treat a condition)
  • A merger, acquisition, or similar business restructuring, if the principal purpose of the action is to cover new individuals under the grandfather plan
  • If the plan did not impose an overall annual or lifetime limit on the dollar value of benefits on March 23,2010 the imposition of an overall annual limit on the dollar value of benefits
  • If the plan imposed an overall lifetime limit on the dollar value of benefits but no overall annual limit on March 23,2010 the imposition of an overall annual limit on the dollar value that is lower than the dollar value of the lifetime limit on March 23,2010
  • If the plan imposed an overall annual limit on the dollar value of all benefits on March 23, 2010 any decrease in dollar value of the overall annual limit

10. What actually qualifies a plan to be grandfathered?

A grandfathered health plan is an existing group health plan (including a self-insured plan) or health insurance coverage in which a person was enrolled on the date of enactment (March 23, 2010). Current enrollees in grandfathered health plans are allowed to re-enroll in that plan, even if renewal occurs after date of enactment. Family members are allowed to enroll in the grandfathered plan, if such enrollment is permitted under the terms of the plan in effect on the date of enactment. For grandfathered group plans, new employees and their families may enroll.

11. What are examples of “significant” changes that would cause a group to lose its grandfathered status?

PPACA is silent on the question about whether changes (other than the enrollment of family members or employees) to a plan or coverage would make it a new plan. It is not clear under the law whether changes to covered benefits, cost-sharing requirements, actuarial value, or other plan features would cause a plan to lose its grandfathered status. 

12. What near term “market reform” provisions are applicable to grandfathered self-funded plans?

Grandfathered group health plans that are self-funded are subject to the following near term market reform provisions:

  • No lifetime limits on essential health benefits.
  • Restrictions on annual limits on essential health benefits. (No annual limits on essential benefits after January 1, 2014.)
  • May not rescind coverage except in cases of fraud or intentional misrepresentation.
  • Must extend coverage for adult children until age 26, if the plan offers dependent coverage. (Prior to 2014, only if the individual is not eligible for employment-based health coverage.)
  • Pre-existing condition exclusions and limitations are prohibited for covered dependent children up to age 19 (and for all enrollees after January 1, 2014).

13. Do the appeals process changes only apply to grandfathered plans?

Yes.

14. The SIIA document lists preventive services for which non-grandfathered plans must provide first dollar coverage. Multiple governmental entities are referenced based on the type of service. How will we keep track of this for our clients?

It is unclear from the legislation how the Department of Health and Human Services will relay this information to insurers and plan administrators. 

15. Revoking grandfather status – a client has home office employees and field agents. They track their experience separately and they are thinking about radically carving up the plan design to make a new plan to put the agents in. We know this new plan would not be grandfathered, but would this move jeopardize their grandfather status of the existing plan?

No.

16. If a group/client changes TPAs and makes no other changes, will they lose their grandfathered status?

No.

17. The regulations state that a plan may change their contribution structure from a single family one to a per person structure in order to help offset costs of offering dependent coverage up to 26. How could they change their contribution structure and yet not trigger loss of grandfathered status?

For purposes of the grandfathering rules, what is relevant in the context of employer contributions is the rate of the employer’s contribution relative to the cost of coverage for any tier of similarly situated individuals expressed as a percentage. The plan will lose its grandfathered status if the rate of the employer’s contribution towards any tier of coverage for any class of similarly situated individuals decrease by more than 5 percentage points from what it was on 3/23/10.

For example:
On 3/23/10, the cost of coverage was as follows:

  • $500 for employee only coverage
  • $1,000 for family coverage regardless of the number of dependents

The employer paid 50% of the cost of coverage, so $250 for employee only and $500 for family coverage.

On 3/23/11, the cost of coverage is as follows:

  • $500 for employee only coverage
  • $500 per person for family coverage regardless of the number of dependents

Conclusion: The employer would need to continue to pay no less than 45% ($225) of the cost of coverage for each person covered under the plan in order to stay grandfathered.

18. If a group/client changes TPAs and makes no other changes, will they lose their grandfathered status?

No.

19. A question has come up whether a group with a current unlimited LT maximum can implement an annual maximum for 2011. Question is being raised because of the way the regulation reads: "With respect to plan years beginning prior to 1/1/14, a group health plan, ......may establish, for any individual, an annual limit on the dollar amount of benefits that are essential health benefits, provided the limit is no less than the amounts in the following schedule...$750K then $1.25M then $2M... So just because there is not presently an annual limit shouldn't preclude a plan form "establishing" one. Also it doesn't appear that this change would defeat grandfathered status since it is not a cost sharing provision and wouldn't alter the % that the employer contributes toward coverage.

In the scenario described, as of 3/23/10, the plan did not have an overall lifetime or annual dollar limit in place.

Regarding the first part of the question - the plan may implement an annual dollar limit on essential health benefits that does not exceed the tiered schedule set forth in the regulations ($750k for plan/policy years beginning on or after 9/23/10; $1.25 million for plan/policy years beginning on or after 9/23/11; $2 million for plan/policy years beginning on or after 9/23/12; and no annual dollar limits on essential health benefits on plan/policy years beginning on or after 1/1/14).

Regarding the second part of the question - the rule on grandfathering provides that a plan will lose its grandfathered status if it imposes an annual dollar limit where the plan did not impose an overall annual or lifetime dollar limit on 3/23/10. In the scenario outlined, the plan did not have a lifetime or annual dollar limit on 3/23/10 and therefore the imposition of an annual dollar limit in 2011 would cause the plan to lose grandfathered status.

20. If an employer adds an amendment to specify using the Centers of Excellence for Obesity Treatment will that cause them to lose their Grandfathered status? Their intent was to add this language 1/1/10 but it wasn't specifically added when the plan document was written.

A plan that eliminates all or substantially all benefits or "necessary elements" to treat or diagnose a particular condition will lose its grandfathered status. While the plan should consult with its legal counsel before making a final determination, one could argue that requiring a participant to receive obesity treatment through a designated facility does not eliminate (substantially or completely) benefits for such treatment as long as the facility is accessible to the claimant.

21. One of our current clients has recently purchased new dealerships with fully insured plans. They want to add these dealerships under their self funded plan effective 1/1/2011 and want to know if this will cause them to lose their grandfathered status. If they add the new dealerships all employees will have the current benefits offered through the self funded plan.

In general, no, this scenario does not appear to jeopardize the grandfathered status of the self-funded plan. However, the following "tests" from the Interim Final Rule on grandfathering are relevant and should be considered.

  1. If the principal purpose of the acquisitions is to cover the new individuals under the grandfathered self-funded plan, then such plan ceases to be grandfathered.
  2. The self-funded plan also ceases to be grandfathered if there is no "bona fide employment based reason" to transfer the employees into the self-funded plan and the self-funded plan, when compared to the existing insured plans, would result in a change in benefits that would trip one of the triggers in the grandfathering rule for losing grandfathered status (examples: deductible or out-of-pocket increase of more than 15%, decrease in employer contribution of more than 5%). The rule provides that "changing the terms or cost of coverage is not a bona fide employment based reason."

22. A client has one plan offered to all active employees known as the Choice Plan. Executives are enrolled in the executive reimbursement plan that covers their medical out of pocket costs under the fully insured premium advantage plan. The expenses had to be eligible under the Choice Plan to be covered by the executive reimbursement plan. Is the executive plan considered a "separate plan" and thereby not subject to grandfathered rules that apply or don't apply to the Choice Plan.

Based on the description above, the Choice Plan and the Executive Reimbursement Plan are 2 separate plans and the grandfathered status of one does not impact the grandfathered status of the other.

23. Are groups with collective bargaining agreements automatically grandfathered until their next negotiations or do they have to change when negotiated premiums increase, even if those increases were negotiated in the last contract?
The regulations provide that insured plans maintained pursuant to one or more collective bargaining agreements ratified before March 23, 2010, will be treated as grandfathered plans until the last collective bargaining agreement terminates. These plans must still comply, by the general effective date, with all healthcare reforms applicable to grandfathered plans.      

HealthExchange Program and Voucher System

1. In anticipation of the Health Exchange program and the voucher system, should there be any adjustments to my plan design or benefit strategy?

Beginning January 1, 2014, plan sponsors of employer-based plans are required to offer vouchers to employees who meet un-affordability requirements for use to purchase coverage through an insurance exchange.

Employees eligible for a voucher are ones:

  • Whose contribution for coverage exceeds 8% but is less than 9.8% of their household income for the taxable year which ends with or within the plan year; and
  • Whose household income is not greater than 400% of Federal Poverty Level (FPL); and
  • Does not participate in any health plan offered by the employer

The amount of any free choice voucher provided shall be equal to the monthly portion of the cost of the eligible employer-sponsored plan, which would have been paid by the employer if the employee were covered under the plan with respect to which the employer pays the largest portion of the cost of the plan.

An Exchange shall credit the amount of any voucher to the monthly premium of any qualified health plan in the Exchange in which the qualified employee is enrolled and the offering employer shall pay any amounts so credited to the Exchange.

If the amount of the voucher exceeds the amount of the premium of the qualified health plan in which the qualified employee is enrolled for such month, such excess shall be paid to the employee. The cost of the voucher will not count as taxable income for any recipient. The cost of any vouchers to an employer is deductible for such employer.

As the amount of the voucher is equal to the cost that would have been paid by the employer if the employee were covered under the plan with respect to which the employers pays the largest portion of the premium, employers (after considering grandfathering provisions) may want to consider modifying higher cost plans that are offered.

Non-Essential Benefits

1. What is the definition of “non-essential” benefits?

Starting in 2014, all individual and group health plans must include “essential health benefits.” The Secretary of HHS is required to define the term “essential health benefits,” but when defining the list of benefits considered “essential benefits” must include items and services in the following categories:

  • Ambulatory patient services;
  • Emergency services;
  • Hospitalization;
  • Maternity and newborn care;
  • Mental health and substance use disorder services, including behavioral health treatment;
  • Prescription drugs;
  • Rehabilitative and habilitative services and devices;
  • Laboratory services;
  • Preventive and wellness services and chronic disease management;
  • Pediatric services, including oral and vision care.

The Secretary has the authority to periodically update the list of essential health benefits, but the list of benefits must be equal to the scope of benefits provided under a typical employer plan. All benefits not included on the list of essential health benefits provided by the Secretary would be considered non-essential benefits.

Over-The-Counter Changes

1. Should I be concerned about the 2011 OTC changes if I have a July 1 plan year? What if I have a grace period? What about the $2,500 maximum in 2013?

Beginning on January 1, 2011, unless prescribed by a provider, over-the-counter medications are no longer qualifying medical expenses.

Beginning on 2013, contributions to Flexible Spending Accounts will be limited to $2,500 per-year. The Consumer Price Index (CPI) will index this amount each year.

Unless further clarified by regulations, both provisions will take effect on January 1. Plans having a non-calendar year plan year or a grace period on their calendar year plan year should be prepared to comply as of the effective dates rather than the beginning of the next plan year. This may mean that services that were allowable prior to the applicable January 1 would not be allowable after January 1.

2. Starting in 2011 flexible spending accounts will require a physician prescription or physician directive before any over the counter medications can be considered for reimbursement under a health care FSA. Is the physician prescription needed for each transaction involving an OTC item or can the prescription/directive span a period of time? For example: 1/1/2011 through 12/1/2011.

As of 9/17/10, the IRS guidance regarding prescriptions required for over-the-counter drugs and medicines does not limit the duration for which an over-the-counter drug can be prescribed for purposes of reimbursement from a health FSA or other account. As long as the prescribed nature of the medication can be substantiated (even via a 12-month prescription, for example), this appears to satisfy the requirement.

Rescissions

1. What impact will the prohibition on rescissions of coverage have on dependent audits?  Should our clients be amending their plans to include specific language that states that participants can be retroactively removed if the participant has engaged in fraud?

The prohibition on rescissions should not impact dependent audits. It is a business decision for each client as to whether they would like to add specific language addressing dependent audits to their plans.

Other/Miscellaneous Questions

1. Is there anything the employer has to do to comply with the FTC “red flag” rules to prevent ID theft – or is that handled by CoreSource?

The Federal Trade Commission (FTC) “Red Flags” Rules requires many businesses and organizations to implement a written Identity Theft Prevention Program to detect the warning signs – or “red flags” – of identity theft in their day-to-day operations. The Rule applies to “financial institutions” and “creditors” (as defined by the regulation). The FTC has published compliance guidance for businesses available on their website (http://www.ftc.gov/bcp/edu/pubs/business/idtheft/bus23.pdf).

The Rule became effective on January 1, 2008, with full compliance for all covered entitles originally required by November 1, 2008. The commission has issued several Enforcement Policies delaying enforcement of the Rule. The Commission announced in October, 2009, that at the request of certain members of Congress, it was delaying the enforcement of the Rule until June 1, 2010, to allow congress time to finalize legislation that would limit the scope of the Red Flags Rule with an effective date earlier than December 31, 2010, the Commission will begin enforcement as of that effective date. Otherwise the effective date of the Rule is December 31, 2010.

Businesses that have accounts a customer can use to make payments or transfers to third parties are considered a “financial institution” under the Rule. Group health plans that offer Flexible Spending Accounts (FSAs) or Health Reimbursement Arrangements (HRAs) with a debit card or similar option should ensure that there is a written identity theft program in place to protect sensitive information.

Each individual employer must determine whether it would be considered a “financial institution” or “creditor” under the FTC Red Flags Rule. After the employer makes this determination, it will be a business decision by CoreSource how to support the employer, if at all.

2. On the 2018 Excise Tax, do we know yet how they plan to levy that tax and how they will define “Cadillac” plans?

Effective in 2018, the PPACA imposes a 40% excise tax on “excess benefits” for “applicable employer-sponsored coverage”. Liability to pay this tax falls on the “coverage provider” which is the insurance company for insured plans, the employer for HSA and MSA contributions and the person that administers the plan benefits (which is often the employer or a trust established by the employer) for other employer sponsored coverage. The “excess benefit” is the amount by which the annual “cost” of applicable employer sponsored coverage exceeds certain thresholds. In general “costs” equates to premium (or its self-funded equivalent) and includes employer and, with some exceptions, employee contributions. The thresholds in 2018 are $10,200 for single coverage and $27,500 for family coverage, and would be indexed annually. Coverage for individuals who are retired and ages 55 to 64, and workers engaged in high-risk professions (defined in the law), will be subject to higher thresholds ($11,850 single and $30,950 family).

Applicable employer sponsored coverage subject to the 40% excise tax in PPACA is broadly defined to include not only for comprehensive health insurance, but also dental and vision coverage (if this supplemental coverage is not a stand-alone product). In addition, tax-advantaged health-related accounts such as flexible spending accounts (FSAs), health savings accounts (HSAs), health reimbursement accounts (HRAs), and medical savings accounts (MSAs) as well as specified disease and fixed indemnity coverage (to the extent the payment for which is not excludable from gross income) are included in the definition of “applicable employer sponsored coverage” for purposes of the threshold calculation.

Each “coverage provider” must pay its applicable share relative to the “aggregate” cost of all applicable employer-sponsored coverage.

Employers are required to calculate the amount of the excess benefit that is subject to the excise tax and the “applicable share” of such excess benefit for each coverage provider, and to report such applicable share to each coverage provider.

3. If a plan’s fiscal year ends on September 1st (due to the accounting year of the company ending at that time or for another reason), but all past benefit changes (deductibles, coinsurance, percentage changes, etc.) have been effective on 1/1, when should the plan implement the HCR changes? What if the plan year was 10/1?

The client should seek advice from their legal counsel. The provisions if the PPACA specifically indicates that provisions will begin to take effect on the “first plan year following six months from the date of enactment”.

4. There has been some confusion about exactly when these changes are to become effective after September 23, 2010. Is it the Plan Year? What if a plan renews other than January, say July 1, but they make plan benefit changes each January. Are we correct in assuming the changes become effective January 1, 2011 for a group that renewed July 2010?

The legislation states that provisions with an effective date of September 23, 2010, are for plans years beginning on or after September 23, 2010. Plan year is not defined in the legislation. 

5. If the Plan makes the required amendments midyear, will their reinsurance carrier be making a rate adjustment prior to the renewal? 

It is a business decision by the reinsurer.

6. Our typical hospital clients provide higher benefit levels for use at their own facilities. Will this be considered provider discrimination?

Section 2706 of the PPACA prohibits group or individual health plans from discriminating with respect to participation under the plan or coverage against any healthcare provider who is acting within the scope of that provider’s license or certification under applicable State law. This section does not require that a group or individual health plan contract with any healthcare provider willing to abide by the terms and conditions for participation established by the plan or issuer. Nothing in this section prohibits a group health plan, a health insurance issuer, or the Secretary from establishing varying reimbursement rates based on quality or performance measures. The PPACA does not define the term “discriminate.”

7. Do plans have to cover all clinical trials?

If a group plan or a health insurance issuer offering group or individual health insurance coverage provides coverage to a qualified individual, the plan may not deny the individual participation in a clinical trial, may not deny (or limit or impose additional conditions on) the coverage of routine patient costs for items and services furnished in connection with participation in a clinical trial, and may not discriminate against the individual on the basis of the individual’s participation in such trial. 

Routine patient costs include all items and services consistent with the coverage provided in the plan that is typically covered for a qualified individual who is not enrolled in a clinical trial. They do not include: the investigational item, device, or service, itself; items and services that are provided solely to satisfy data collection and analysis needs and that are not used in the direct clinical management of the patient; or a service that is clearly inconsistent with widely accepted and established standards of care for a particular diagnosis. 

Plans may require participants to use participating providers. Federal law does not preempt state laws that require a clinical trial policy for state-regulated health insurance plans that is in addition to the policy required under this section. 

Section 2709 of the PPACA defines the term “approved clinical trail” as a phase I, phase II, phase III, or phase IV clinical trial that is conducted in relation to the prevention, detection, or treatment of cancer or other life-threatening disease or condition. 

8. What is meant by “no cost sharing on preventive/immunization services”?

Effective for plan years beginning on or after September 23, 2010, group health plans (including self-insured plans) and health insurance issuers in the group and individual markets are required to provide first-dollar coverage for the following preventive health services:

  • Items or services with a rating of A or B in the current recommendations of the U.S.  Preventive Services Task Force (USPSTF)
  • Immunizations recommended by the Advisory Committee on Immunization Practices of the  Centers for Disease Control and Prevention (CDC)
  • Preventive care and screenings provided for in the comprehensive guidelines supported by  the Health Resources and Services Administration (HRSA) for infants and children
  • Preventive care and screenings for women as provided for by HRSA

Plans may cover additional services and/or deny coverage for services not required to be covered. A minimum time interval of at least one year will be established for plans to begin covering any newly mandated preventive services.  

9. Does anything in the PPACA negate or prohibit supplemental accident benefits?

No.

10. If a client has more than 500 people on the plan whose primary language is Spanish, are they required to send their notices in Spanish?

It is reasonable to set a “literacy” threshold with respect to “culturally and linguistically appropriate” notice requirement from the claim/appeal regulation.

  • For group health plans covering fewer than 100 participants at the beginning of the plan year, the plan or issuer must provide notices, upon request, in a non-English language if 25% or more of all plan participants are literate only in that non-English language.
  • For group health plans covering 100 or more participants at the beginning of the year, the plan or issuer must provide notices, upon request, in a non-English language if 500 or, if less, at least 10% of plan participants are literate only in that non-English language.

11. Can we get a checklist of all notices that a Plan has to comply with effective 1/1/11?

  1. Prohibition on Lifetime Limits
    1. Individuals who reached a lifetime limit prior to a plan year on or after 9/23/10 and are still otherwise eligible for coverage must be provided a notice that the lifetime limit no longer applies.
    2. If such individuals are no longer enrolled, then they must be provided with a notice and enrollment opportunity no later than the first day of the first plan year on or after 9/23/10.
  2. Extension of Dependent Coverage
    1. A dependent child whose coverage ended or who was denied (or was not eligible for) coverage because the plan did not offer coverage to age 26, and who is otherwise eligible for coverage as of the first day of the first plan year beginning on or after 9/23/10, must receive written notice of an opportunity to enroll in the plan.
    2. For a group health plan or group health insurance coverage, the notice may be included with other enrollment material that a plan distributes to employees, provided the statement is prominent.
  3. Claims/Appeals
    1. Related to claims and appeals processing, notices to be used in the event of an Adverse Benefit Determinations, Internal Final Adverse Benefit Determinations and External Review Decisions must be provided in a “culturally and linguistically appropriate” manner as defined in the regulations. Model Notices are available.
  4. Patient Protection
    1. For plan years on or after 9/23/10, if a plan requires or provides for the designation of a participating primary care provider (PCP), then the insured may designate any participating provider available as the PCP. Plans requiring designation of a PCP must provide notices regarding the rights of the insured in the participant’s summary plan description or similar description of benefits. Model Notices are available.
  5. Grandfathered Plans
    1. To maintain grandfathered status, the plan must include a statement in any materials provided to a participant describing the benefits provided under the plan that the plan believes it is grandfathered and must provide contact information for questions and complaints. Model language is available.
  6. Rescissions
    1. In the event of a rescission of coverage, notice of the rescission must be provided in writing at least 30 days in advance of the rescission to each participant who would be affected. Therefore, if an entire group is to be rescinded, all participants must receive this notice.

12. Is the employer paid portion of the premiums going to be taxed to employees?
No, the employer paid portion of the premium is not going to be taxable to employees as a result of HCR. Instead, the aggregate cost of employer-sponsored coverage needs to be reported on the employee's W-2; however this is just for reporting purposes, not for taxation purposes.