A few weeks ago, we included a checklist of what PPACA plan notices must be provided in 2011 (see What Notices Are Required by PPACA). This week we discuss what plan amendments plans must consider. Each of these possible plan amendments can be very complicated and fact-specific, so you likely will need to review the details of each rule as they apply to your particular plan.
Plan Amendments That Apply to Both Grandfathered & Non-Grandfathered Plans
- Annual & Lifetime Limits – Plans may no longer impose a lifetime limit on "essential" health benefits. Plans may continue to impose an annual limit on these benefits, but that annual limit must be at least $750,000 (which will increase to $1.25 million in 2012). Since they have not yet issued guidance on what benefits are "essential," the agencies in charge of enforcing the rules have said that plans must make a good faith reasonable interpretation of what is "essential."
- Rescission – To the extent a plan retroactively terminates coverage, it may need to either change this practice or amend the plan to set out the circumstances when it may rescind coverage, such as due to fraud or intentional misrepresentation of a material fact.
- Adult Children – Plans generally must cover dependent children to age 26 without imposing additional conditions, such as marital status, student status, residency, or tax dependency. Grandfathered plans are not required to cover children who are eligible for coverage through another employer plan (other than through the child's parents). Note that the agencies recently issued guidance revising this rule, so plans are permitted to impose conditions on some children. The new guidance can be found at http://www.dol.gov/ebsa/faqs/faq-aca.html (Q&A #14).
- Pre-Existing Condition Exclusions (PCEs) – Plans may not impose a PCE to enrollees under age 19.
- Over-the-Counter Drugs – FSAs, HRAs, and HSAs may no longer reimburse OTC drugs without a prescription.