Health Plans Have an Added Mandatory Disclosure under ERISA

Posted by Robert Ellerbrock on May 14, 2012

Ellerbrock_Robert color.jpgSummary of Benefits and Coverage.

Health care reform expands ERISA's disclosure requirements by requiring that group health plans provide a summary of benefits and coverage (“SBC”) to plan participants and beneficiaries before enrollment or re-enrollment. The primary purpose of the SBC is to enable participants to compare coverage options easily and to help them better understand their health benefits.  The SBC must accurately describe the benefits and coverage available to the participant or beneficiary under the applicable plan. This SBC requirement applies in addition to the SPD and SMM requirements already in place.

On March 19, 2012, the Internal Revenue Service, Department of Labor, and Health and Human Services  jointly issued a set of Frequently Asked Questions (“FAQs”) regarding the final regulations that were issued on February 14, 2012, regarding the SBC.  The requirements are generally effective with open enrollment periods that begin on or after September 23, 2012.  While the agencies did not delay the effective date, the FAQs make it clear that they are focusing on helping plans become compliant, rather than imposing penalties.  Specifically, Q/A-2 provides that no penalties will apply during the first year of applicability to those working diligently and in good faith to provide the required SBC content in an appearance consistent with the final regulations.

While the FAQs provide helpful guidance with respect to the SBC requirements, the basic requirements, including the effective date, are largely unchanged from the final regulations.  For a sample SBC, go to the DOL website.   Remember, the plan sponsor is responsible for ensuring distribution of the SBCs at open enrollment, automatic enrollment, special enrollment (e.g., birth of a baby, COBRA event), and upon request. 

Supreme Court Expected to "Diagnose" the Affordable Care Act in June

Posted by Robert Ellerbrock on April 04, 2012

supremeCourtAffordableCareActjpgThe Supreme Court heard oral arguments last week regarding the constitutionality of the individual mandate portion of the Affordable Care Act.  The arguments lasted for three days and were everything from contentious to interesting and at times very entertaining.  On the final day, the Justices heard arguments debating whether the individual mandate could be severed from the  remainder of the Affordable Care Act, or whether the entire Act would be voided if the individual mandate were held to be unconstitutional.  As expected, based on the comments and the questions asked by the Justices,  it appears that this issue will be decided by one or two votes.  Once the Supreme Court releases its opinion, which is expected in June, we will provide additional information regarding its impact on employers and health plans.

Federal Agencies Delay Automatic Enrollment for Group Health Plans

Posted by Dana Thrasher on February 20, 2012

iStock_nowlater.jpgRecall that the Patient Protection and Affordable Care Act (“PPACA”) – the health care reform legislation passed in 2010 – originally required that group health plans implement automatic enrollment in 2014.  The Internal Revenue Service, Department of Labor and Department of Health and Human Services have jointly issued, in the form of “Frequently Asked Questions” or “FAQs,” guidance that delays the implementation of the group health plan automatic enrollment requirement.  Employers (to whom the Fair Labor Standards Act applies and with more than 200 full-time employees) have reprieve regarding the original 2014 deadline until the DOL issues final regulations that provide automatic enrollment guidance.

The FAQs detail issues regarding the requirement for employers to provide coverage to full-time employees or be subject to a penalty assessment (the “employer shared responsibility provisions”).  The FAQs also provide guidance on how employers will determine whether employees are “full time employees” and how to use W-2 income rather than household income to determine whether coverage is “affordable coverage.”  The FAQs provide that the agencies will issue further guidance on the coordination of the employer shared responsibility provisions and the 90-day waiting period limitation (and even more specifically, the application of the waiting period limitation to part-time and seasonal employees).

This guidance provides specific examples that will assist companies in preparing for future compliance.  The agencies are accepting public comments on the guidance through April 9, 2012. 

United States Supreme Court to Hear Challenges to Health Care Reform

Posted by David Pearson on November 16, 2011

Pearson_David color(web).jpgThe Supreme Court decided on November 14, 2011 that it will hear several challenges to the health care reform legislation enacted in 2010 (the Patient Protection and Affordable Care Act).  Oral arguments are scheduled for March, 2012 and a decision is likely by next summer (just in time for the run-up to the Presidential election).

The Court will review several challenges that have worked their way through the federal appellate courts.  The actual case selected for review is State of Florida v. U.S. Dept of Health & Human Services, in which 26 states challenged the constitutionality of the individual insurance mandate, which beginning in 2014 will require individuals who do not have other health insurance (such as through their employers) to purchase individual insurance or pay a penalty.  The 11th Circuit Court of Appeals threw out the individual mandate as unconstitutional, concluding that it violated the commerce clause of the U.S. Constitution.

In addition to reviewing the constitutionality of PPACA's individual mandate, the Supreme Court will consider whether that mandate is severable from the other parts of the statute.  If it finds the mandate both unconstitutional, and also finds that it cannot be severed from the rest the statute, it will likely invalidate the entire PPACA.

The Supreme Court will also consider two other issues:  a challenge to PPACA's expansion of Medicaid coverage, and the question of whether the federal Anti-Injunction Act bars the states from challenging PPACA at this time because the individual mandate penalty is to be considered a "tax."

Given the large divisions in opinion at to the value of the health care reform legislation, the imminent political season leading up to the 2012 elections, and the significant impact that PPACA will have on virtually all employers, the Supreme Court's decision will be eagerly awaited.

 

HHS ANNOUNCES IMMEDIATE HIPAA AUDIT INITIATIVE

Posted by Dana Thrasher on November 11, 2011

Thrasher.jpgThe Office for Civil Rights ("OCR") of the Department of Health and Human Services has announced an audit initiative under which it intends to conduct audits of up to 150 covered entities to review compliance with the Health Insurance Portability and Accountability Act of 1996 ("HIPAA").  The audit will focus on the HIPAA privacy and security requirements.  The OCR will select a broad range of entities, including health plans and health care providers of all sizes.  HIPAA audits begin immediately.

Group health plan sponsors and health care providers should carefully review their HIPAA compliance programs.  Keep in mind that HIPAA mandates training of individuals who have access to protected health information.  Failure to train (and to properly document training) could result in significant liability.  

Similarly, failure to have compliant documents, notices, practices and procedures could subject the covered entity to substantial penalties and well as requirements to provide notification of breaches of the HIPAA requirements. 

HIPAA mandates training. . . audits begin immediately.

Plan sponsors should examine all business associate relationships.  They should ensure too that they have updated their documents and properly documented all relationships. 

What's the Fate of Obamacare. . . Unconstitutional?

Posted by Brian Magargle on August 17, 2011

iStock_thumbs.jpgThe advocates of Obamacare are all wondering what an important new court decision means for the sweeping health care reform passed in March 2010.  Late last week, the 11th Circuit Court of Appeals held a key provision of health care reform is unconstitutional, which could make the law difficult to enforce.  See decision here:  11th Circuit_Decision.pdf.  Obamacare contains a provision known as the "individual mandate," which requires individuals who do not have coverage through their employer to buy insurance or face an annual tax penalty which will be as high as $695 per year by 2016.

The 11th Circuit found that provision exceeds the constitutional authority of Congress, meaning that the federal government cannot force its citizens to buy insurance, and it cannot collect a penalty for citzens failing to do so. Many observers believe that if there is no penalty, there will be no incentive for uninsured individuals to obtain coverage.

 

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FREE Contraceptives for Women? No Co-Pay for Women's Preventive Health Care

Posted by Robert Ellerbrock on August 03, 2011

The Patient Protection and Affordable Care Act of 2010 (PPACA) required health plans to cover services listed in the HHS comprehensive list of preventive services at no cost to patients.  Just this past August 1st, as part of an expansion of coverage for women’s preventive care under the PPACA, the U.S. Department of Health and Human Services (HHS) mandates that the following soon to be co-pay free:  

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  • well-woman visits;
  • screening for gestational diabetes;
  • human papillomavirus (HPV) DNA testing for women 30 years and older;
  • sexually-transmitted infection counseling;
  • human immunodeficiency virus (HIV) screening and counseling;
  • breastfeeding support, supplies, and counseling;
  • domestic violence screening and counseling; and
  • FDA-approved contraception methods and contraceptive counseling.

 

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Medicare Part D Enrollment Period Shifts, Requiring Employers to Issue Notice a Month Earlier

Posted by Robert Ellerbrock on July 26, 2011

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The Affordable Care Act shifted the annual enrollment period for Medicare Part D a month to October 15th through December 7th. Prior to the change, annual enrollment began on November 15th.

CMS guidance, issued in 2009, provided that plans must provide Notices of Creditable (or Non-Creditable) Coverage at the following times:

  • Prior to the Medicare annual enrollment period (which period the Affordable Care Act moved up a month earlier),
  • Prior to an individual’s initial opportunity to enroll in Part D,
  • Prior to the effective date of coverage for any Medicare-eligible individual that joins the plan,
  • When the plan’s prescription drug coverage changes (i.e., ends, is no longer creditable or becomes creditable), and
  • Upon request by an individual.

As the Medicare annual period change is effective for the 2012 Part D enrollment, which takes place in Fall 2011, plan sponsors must prepare to provide the Notice earlier this year and, of course, prior to October 15th.

Plan sponsors should determine if they must modify their Notices to reflect the Affordable Care Act change.

Health Care Reform Proponents Score a Victory

Posted by Dana Thrasher on July 05, 2011

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On one of the most controversial points in the health care reform legislation -- the individual mandate to purchase insurance -- President Obama, his team, and all those in favor of the legislation scored a significant victory last week when a three-judge panel of the 6th Circuit Court of Appeals upheld the constitutionality of the "mandate" that individuals purchase health insurance coverage.  See SixthCircuit_Health Care.pdf.  The challenge questioned whether, under the Commerce Clause, Congress could regulate the economic "inactivity" of failure of individuals to buy insurance. The 4th and 11th Circuits also are expected to issue rulings soon on the issue. Ultimately, the Supreme Court likely will address the issue. In the meantime, those on both sides of the issue anxiously await the 4th and 11th Circuit decisions.