We are a grandfathered plan and will lose grandfathered plan status as of January 1, 2013. What additional plan amendments do we need?
There are a number of requirements that do not apply to grandfathered plans. However, these requirements will apply when a plan loses grandfathered status, so grandfathered plans should be careful not to make mid-year changes that could inadvertently trigger loss of grandfathered status. Instead, grandfathered plans should deliberately decide when they may want to lose grandfathered status so that they can adopt the required plan amendments accordingly. Prior PPACA requirements that will apply when a plan loses grandfathered status include:
- Plans must cover the preventive care coverage listed in the adopted task force recommendations at 100% without cost sharing;
- During appeals, plans must provide any new or additional evidence considered automatically (not just upon request) as soon as possible and sufficiently in advance of the final denial notice to give the claimant an opportunity to respond;
- Plans must add new independent external review procedures;
- Plans must allow a choice of primary care provider where the plan requires such a designation (including allowing a child to name a pediatrician as their primary care provider);
- Plans must not require authorization or referrals for OB-GYN visits;
- Plans must cover emergency services without prior authorization and treat such services as in-network, even if received by an out-of-network provider; and
- Plans must cover the women’s preventive care coverage, as adopted by the agencies, at 100% without cost sharing (for plan years on or after 8/1/12).
What plan amendments are required for the 2013 plan year?
For all plans (grandfathered and non-grandfathered), the following amendments apply:
- Health FSA contributions are limited to $2,500.
- If a group health plan imposes an annual dollar limit on essential health benefits, the annual limit must be at least $2 million.
Non-grandfathered plans also must cover women's preventive care, as adopted by the agencies, at 100% with no cost sharing for plan years on or after 8/1/12.
What plan amendments are required for the 2014 plan year?
For all plans (grandfathered and non-grandfathered), the following amendments apply to plan years on or after 1/1/14:
- Waiting periods will be limited to 90 days;
- Plans may no longer impose an annual dollar limit on essential health benefits;
- Plans may not impose a pre-existing condition exclusion to any enrollee (regardless of age);
For non-grandfathered plans, the following amendments apply to plan years on or after 1/1/14 (and will apply to grandfathered plans when they lose grandfathered status):
- Plans must cover certain clinical trial costs;
- HIPAA wellness program incentives will be allowed to be increased from 20% of the cost of employee coverage to 30%;
- Insured plans in the individual and small group market must cover certain essential health benefits;
- Cost sharing will be limited to $5,950 for individuals / $11,900 for families (amounts to be adjusted before 2014); and
- Deductibles will be limited to $2,000 per individual / $4,000 per family (indexed). Note: There is much debate about whether this provision applies only to the small group market or to the large group market as well, so look out for additional guidance.
Not all of these amendments will apply to every plan, depending on the plan's current terms. However, plans should run these items through their plan amendment checklists to ensure they stay up-to-speed on the latest PPACA requirements and for grandfathered plans, as a reminder that they may need to go back and add amendments that already have been effective for other plans.
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
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.