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Oct 2010
13
October 13, 2010

Dealing with Health Plan Disclosures

2011 is right around the corner, and for calendar year plans, that means compliance with health care reform. One of the first things plans have to deal with involves participant disclosures required under the new rules.

What follows is a brief summary of the disclosures required for 2011.

All Group Health Plans

The following notices are required for all group health plans, including grandfathered plans:

  • Extended Dependent Coverage and Enrollment Notice
    Plans that offer dependent coverage must provide a notice informing participants that their children's coverage can continue until the child’s 26th birthday. Plans must also offer a 30-day period to enroll eligible children who lost or were denied coverage because the plan had a lower age limit. Plans may run this special enrollment period concurrently with their normal open enrollment period, as long as the normal period is at least 30 days long.

    Plans may choose to extend coverage beyond the adult child’s 26th birthday, such as until the end of the month or the year in which the individual turns 26, and the value of this coverage can still be excluded from the employee’s income.

    For calendar year plans, the notice and enrollment period must be provided no later than January 1, 2011, and the enrollment must be effective as of that date. Until 2014, grandfathered plans do not have to provide coverage if the adult child is covered under another employer-sponsored plan other than a parent’s plan. The notice may be included with other enrollment materials, provided the statement is prominent. You can find the model notice here: http://www.dol.gov/ebsa/dependentsmodelnotice.doc.

     
  • Lifetime Limits Elimination and Enrollment Notice
    Plans are required to provide notice of the elimination of lifetime dollar limits to those who lost coverage upon reaching a plan's lifetime limit. The plan must offer a 30-day special enrollment opportunity to affected individuals. For calendar year plans, the notice and enrollment period must be provided no later than January 1, 2011, and the enrollment must be effective as of that date. The notice may be included with other enrollment materials, provided the statement is prominent. You can find the model notice here: http://www.dol.gov/ebsa/lifetimelimitsmodelnotice.doc.

     
  • Grandfathered Status
    Plans attempting to retain grandfathered status must include a statement that the plan is believed to be a grandfathered plan. The statement should be included in any plan materials that describe the benefits under the plan, such as the summary plan description, enrollment materials and other similar documents.  You can find the model notice here: http://www.dol.gov/ebsa/grandfatherregmodelnotice.doc. If you wish to treat your plan as grandfathered, but your insurer or third party administrator is treating all plans as non-grandfathered, you must include this notice in any materials that are distributed to plan participants describing the benefits under your plan. The IRS has informally stated that you may implement the required modifications applicable to non-grandfathered plans without destroying your grandfathered status. However, your status can be jeopardized by failure to include the notice on documents issued by your insurer or administrator. If you post your summary plan description or other benefit documents on your website, this notice should be made a permanent part of the PDF file.

     
  • Advance Notice of Rescission
    Plans that retroactively terminate an individual's coverage under the very narrow circumstances now permitted (deliberate fraud or intentional misrepresentation) must give the affected individual at least 30 days' advanced notice. There is no model notice for this requirement.

Non-Grandfathered Plans

Plans that are not grandfathered are subject to the following additional disclosures:

Please contact a member of Warner's Health Care Reform Task Force if you have any questions about Health Care Reform or would like help customizing these disclosures to your plan.

NOTICE. Although we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Also, we cannot treat unsolicited information as confidential. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you.

By clicking the ‘ACCEPT’ button, you agree that we may review any information you transmit to us. You recognize that our review of your information, even if you submitted it in a good faith effort to retain us, and even if you consider it confidential, does not preclude us from representing another client directly adverse to you, even in a matter where that information could and will be used against you.

Please click the ‘ACCEPT’ button if you understand and accept the foregoing statement and wish to proceed.

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