2010 |
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| BENEFIT PLAN DESIGN CHANGES | ||
ALL PLANS
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| Requirement | Resources | Notice/Disclosure |
| Provide Dependent Coverage for children under age 26 and eliminate most dependent eligibility criteria (limited exception for grandfathered plans). See also Tax-Free Coverage to Children Under Age 27. This special enrollment (and notice requirement) is a one-time event and does not need to be repeated in subsequent plan years. |
Notice of Special Enrollment Opportunity May be included with other enrollment materials provided that it is prominent, and may be provided to an employee on behalf of a dependent. |
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| Prohibition of Lifetime Limits on Essential Health Benefits. Benefits that are not essential may have lifetime limits. EHB must be equal in scope to benefits covered by a typical employer plan as determined by each State and must include items and services in ten general categories.This special enrollment (and notice requirement) is a one-time event and does not need to be repeated in subsequent plan years. |
Notice that Lifetime Limit No Longer Applies and Special Enrollment Opportunity Provide to any individual who has lost coverage because he or she reached a lifetime limit on benefits – may be included with other enrollment materials provided that it is prominent, and may be provided to an employee on behalf of his or her dependent. |
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Restriction of Annual Limits on Essential Health Benefits (EHB), with limits eliminated entirely by 2014. Benefits that are not essential may have annual limits EHB must be equal in scope to benefits covered by a typical employer plan as determined by each State and must include items and services in ten general categories. |
Amend Summary Plan Description (SPD) and Plan documents as needed. |
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Prohibition of Preexisting Conditions Exclusion for enrollees under age 19 (expands to all enrollees in 2014). |
Amend SPD and Plan documents as needed. |
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Prohibition Against Rescission of Coverage except in cases of fraud or intentional misrepresentation of material fact where prohibited in plan documents (rescission is a retroactive cancellation of coverage; this prohibition does not apply to prospective coverage terminations). |
In order to rescind coverage, plans and insurers must provide at least 30 days advance written notice to each participant who would be affected before coverage may be retroactively rescinded. |
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Grandfathered Plans Only To qualify as a Grandfathered Plan, employers must maintain their plan according to established requirements. |
Participant Disclosure of Grandfathered Plan Status For any plan or benefit option maintaining grandfathered plan status, plan must include Disclosure Statement in all plan materials (including the SPD, insurance certificate, and any other materials describing plan benefits) distributed to participants. |
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NEW and NON-GRANDFATHERED PLANS
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| Requirement | Resources | Notice/Disclosure |
| Required Coverage of Certain Preventive Health Services without cost sharing. This includes women’s preventive health care, such as mammograms, screenings for cervical cancer, prenatal care, contraception, and other services. |
Amend SPD and Plan documents as needed. |
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| Patient Protections allowing participants to designate any participating in-network PCP or Pediatrician as primary care provider, access to OB/GYN care without requiring referral, and coverage of emergency services without prior authorization and as though the ER provider is in-network for true emergencies. |
Patient Protections Model Disclosure for plans that require the designation of primary care providers or referrals from primary care providers to seek specialty care such as OB/GYN services. The notice must be included whenever a SPD or other similar description of benefits is provided to a participant and no later than the first day of the first plan year beginning or after September 23, 2010. |
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| Claims Appeals Process changes and external review standards. On March 18, 2011, the DOL issued Technical Release 2011-01, which extended the non-enforcement policy applicable to three of the four standards specified in T.R. 2010-02 until plan years beginning on or after January 1, 2012. |
Amendment to Interim Final Regulation
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Amend SPD and Plan documents as needed. Plans must also follow new notice, disclosure, and procedural requirements for adverse benefit determinations and appeals. |
| Fully-Insured Plans must comply with IRC Section 105(h) Nondiscrimination Rules that previously only applied to self-insured plans, including rules that prohibit discrimination in favor of highly- compensated individuals in relation to eligibility to participate and benefits provided. Enforcement has been delayed until issuance of further guidance. | Review eligibility criteria, waiting periods, and other benefits provisions to ensure plan does not violate nondiscrimination rules; amend criteria as necessary and update SPD and Plan documents to reflect any changes. | |
| ADMINISTRATIVE, TAX and OTHER PROVISIONS | ||
| Requirement | Resources | Effective Date |
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Tax-Free Coverage to Children Under Age 27
so that the age limit, residency, support, and other tests described in Code Section 152(c) do not apply with respect to such a child for determining the tax exclusion. |
March 30, 2010; if implemented in 2010, cafeteria plan document must be amended on or before 12/31/10; implementing change on or after 1/1/11 requires adoption of cafeteria amendment prior to allowing favorable tax treatment. |
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| Early Retiree Reinsurance Program reimbursing eligible plan sponsors for certain claims incurred by early retirees offered coverage under an employer-sponsored group health plan. Applications for ERRP certification will no longer be accepted after May 5, 2011. |
Eligible claims incurred on or after June 1, 2010 can be submitted for reimbursement after an employer applies and is certified to participate in the program; applications were accepted beginning June 29, 2010. |
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| Limited (35% for most employers) Small Business Health Care Tax Credit to small employers to provide health insurance and contribute at least 50% toward the cost of coverage. Credit amounts increase in 2014. |
After publication of implementing regulations by the Department of Health and Human Services or governing federal agency. |
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| Automatic Health Plan Enrollment for employers with 200 or more employees. |
No Model Notice Yet Available See TITLE I, Subtitle F, Sec. 1511: Automatic enrollment for employees of large employers in the PPACA |
Employers are not required to comply until regulations are issued by the Secretary of Labor. The DOL intends to complete this rulemaking by 2014. |
| Whistleblower and Retaliation Protections to encourage employees to report fraud or abuse in the delivery of health care. |
March 23, 2010. |
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2011 |
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| BENEFIT PLAN DESIGN CHANGES | ||
| Requirement | Resources | Notice/Disclosure |
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OTC Drugs Cannot Be Reimbursed from an FSA, HSA, HRA or Archer MSA unless prescribed by a doctor.
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Amend Plan documents and SPDs as needed and notify participants of change effective no later than January 1, 2011. |
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| HSA/Archer MSA Penalty Tax Increase to 20% for nonmedical distributions. Distributions after December 31, 2010. |
No Notice or disclosure required by employer since rule applies to employees’ individual accounts. |
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| Small employers may establish Simple Cafeteria Plans that provide a safe harbor from nondiscrimination rules if minimum employer contributions are made Years beginning on or after January 1, 2011. |
Review rules for establishing simple cafeteria plan to determine if employer will qualify, adjust eligibility and benefits and amend plan documentation prior to first day of plan year. |
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| ADMINISTRATIVE, TAX and OTHER PROVISIONS | ||
| Requirement | Resources | Effective Date |
| Small Business Wellness Grants to create comprehensive workplace wellness programs for employers who did not have a wellness program in place on March 23, 2010. |
Available to eligible small employers beginning in 2011 taxable year. |
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2012 |
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| ADMINISTRATIVE, TAX and OTHER PROVISIONS | ||
| Requirement | Resources | Effective Date |
| W-2 Reporting of aggregate cost of employer-sponsored health plan coverage. Certain plans and coverage are exempted. |
Compliance Activity (for self-insured plans) Compliance Activity (for fully insured plans) |
Optional for 2011 taxable year. Generally applies beginning with 2012 Forms W-2 (furnished in January 2013). Transitional relief at least through 2012 for employers that file fewer than 250 Forms W-2 in 2011. |
| Summary of Benefits and Coverage and a uniform glossary of commonly used health insurance and medical terms must be provided to plan participants prior to enrollment and upon request. A new SBC or Summary of Material Modifications must be provided to plan participants at least 60 days prior to the effective date of a material modification to the plan. |
Compliance Activity (for self-insured plans) Compliance Activity (for fully insured plans)
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The final regulations require employers to distribute the SBC beginning on or after September 23, 2012. For calendar year plans, this means that SBCs will be required for the first time in conjunction with 2013 open enrollment materials during the fall of 2012. The SBC must be provided as part of any written application materials that are distributed by the plan for enrollment. If the plan does not distribute enrollment materials, the SBC must be distributed no later than the first date the participant is eligible to enroll in coverage for the participant and any beneficiaries.
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| If a health insurer’s Medical Loss Ratio (MLR) fails to meet minimum requirements (generally, 85% in the large group market and 80% in the small group market), the insurer must provide an annual rebate to enrollees. The insurer must send the rebate directly to the employer; the employer is obliged to distribute some or all of the rebate to its employees in accordance with applicable rules. |
Compliance Activity (for fully insured plans) |
The first report to HHS for calendar-year 2011 is due by June 1, 2012. Insurers must make the first round of rebates by August 1, 2012 based on their 2011 MLR. |
Material contained in ComplianceDashboard is a compilation of generally published information by the Department of Labor and other public agencies regulating employee benefit plans and employee benefit issues. It is not legal advice, and should not be construed as legal advice. If legal advice or other professional assistance is or may be required with regard to any issues referenced in this website, the services of a competent legal or tax professional should be immediately sought. The inclusion of links within the ComplianceDashboard website is for informational purposes only. ComplianceDashboard does not warrant the accuracy of information outside this website that is found as a result of following links contained herein, nor does the inclusion of those links herein constitute endorsement of the content of any other website. If you have questions regarding this disclaimer, please contact us at 877-328-7880.