Now plans are asking, “What’s next?” This week, we’ll talk about what plan sponsors should be considering going forward.
What Plan Amendments Will Be Required Next?
Believe it or not, some plans already are planning for NEXT year and starting to draft or budget for plan amendments, particularly if they have a Board or committee that must approve the changes. While 2011 and 2014 are the biggest years for actual plan amendments, there still are some changes that will be required in the interim. The restricted annual limit for essential benefits goes up in 2012 to $1.25 million. So plans that adopted the new $750,000 restricted annual limit will need to update this provision. This amount increases to $2 million in 2013. Also for 2013, the amount that may be contributed to a health FSA will be limited to $2,500 per year.
Plans that remained grandfathered, so didn’t have to adopt as many changes for the 2011 plan year, will need to make sure they are still grandfathered and, if not, will need to add the required plan amendments for preventive health, appeals, choice of providers, and emergency services. And all plans should look back and make sure they have included all the required changes for 2011 – for their health plans and their HSA, FSA, or HRA. If not, this will be an opportunity to clean up any loose ends.
Are There New Notice Requirements?
Plan sponsors should pay particular attention to new guidance issued by HHS, DOL, and Treasury. This guidance, which has been in the form of regulations, notices, and FAQs, often contains new requirements, delayed enforcement dates, grace periods, and model language. One recent piece of guidance from OCIIO (the office that has responsibility for much of PPACA) addressed a new notice requirement for plans that have requested a waiver of the annual limit rules. This requirement applies to limited benefit plans (such as “mini-med” plans) that have been approved for the annual waiver. The guidance requires these plans to provide notices to current and eligible participants informing them that the plan does not meet the minimum annual limits and has received a waiver of the annual limit requirements. The notice, which must be prominently displayed in 14-point bold type, must use the model language in the OCIIO guidance (OCIIO Guidance 2010-1B). For plan years beginning before February 1, 2011, the notice must be distributed within 60 days of December 9, 2010, which means that the notice must be distributed on or before Monday, February 7, 2011. For plan years beginning on or after February 1, 2011, the notice must be provided as part of any informational material or any plan documents, such as enrollment materials or SPDs.
What else should plan sponsors make a priority right now?
Plan sponsors that cover retiree health benefits and have not applied for the Early Retiree Reinsurance Program (ERRP) still have time to file an application. At the end of last year, HHS updated the "Common Questions" section of the ERRP website and announced that, as of December 30, over $4 billion dollars remained available for claims reimbursement. Some plans sponsors did not file earlier because they believed bigger plans might beat them to the reimbursement. So we are seeing more plan sponsors consider this process and filing applications, which are reviewed on a continuing basis. Specific procedures and requirements for claims reimbursement can be found at www.errp.gov.
We also are getting a lot of questions on the new claims and appeals rules, particularly the external review requirement. This requirement applies for the 2011 plan year, so is applicable now for calendar year plans. Plan sponsors of self-funded plans must contract with three independent review organizations to handle these external appeals. In many cases, the plan's TPA will do this for them, but the plan sponsor should make sure – and many TPAs require an amendment to the underlying services agreement (and possibly extra fees) in order to take on this responsibility. In next week's column, we'll address specific questions we've received regarding the new claims and appeals rules.
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Got a health-care reform question? You can ask YOUR health-care reform legislation question online at http://www.surveymonkey.com/s/second_opinions
You can find a handy list of Key Provisions of the Patient Protection and Affordable Care Act and their effective dates at http://www.groom.com/HCR-Chart.html
Contributors:
Christy Tinnes is a Principal in the Health & Welfare Group of Groom Law Group in Washington, D.C. She is involved in all aspects of health and welfare plans, including ERISA, HIPAA portability, HIPAA privacy, COBRA, and Medicare. She represents employers designing health plans as well as insurers designing new products. Most recently, she has been extensively involved in the insurance market reform and employer mandate provisions of the health-care reform legislation.
Brigen Winters is a Principal at Groom Law Group, Chartered, where he co-chairs the firm's Policy and Legislation group. He counsels plan sponsors, insurers, and other financial institutions regarding health and welfare, executive compensation, and tax-qualified arrangements, and advises clients on legislative and regulatory matters, with a particular focus on the recently enacted health-reform legislation.
PLEASE NOTE: This feature is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.