Non-Grandfathered Plans

The Affordable Care Act (“ACA”) included various group health plan eligibility and coverage mandates, many of which were effective the first plan year beginning on or after September 23, 2010. Congress exempted plans (that were in existence on March 23, 2010 and covered at least one person continuously on and after that date) from some, but not all, of the ACA’s mandates. Such plans are called “grandfathered plans.”  If certain rules are not followed, the plan loses the grandfathered designation and is then considered a “non-grandfathered” plan.  Non-grandfathered plans are not exempted from any of the ACA mandates.

• Group health plan administrators and plan sponsors should ensure that plan documents, insurance policies, summary plan descriptions, and benefit summaries are updated to include the eligibility and coverage requirements mandated in the ACA (these are also collectively know as PHSA Mandates) mandates and ensure these materials have been distributed to plan participants in accordance with ERISA distribution requirements.

PHSA Mandates

The mandates arising out of the PHSA are applied according to plan type. Click on the link below to view each category of mandates.

• All Plans: Grandfathered/Non-Grandfathered, Fully Insured/Self-Insured
• Non-Grandfathered Plans: Fully Insured/Self-Insured
• Non-Grandfathered Plans: Fully Insured

Required Notices and Disclosures

Notice of Intent to Rescind Coverage: If rescission of coverage is otherwise permitted, plans must provide at least 30 days advance written notice of the intent to rescind coverage to all participants who would be affected, in order to provide affected participants with the opportunity to appeal the retroactive termination of coverage.

Notice of Choice of Provider*: New and non-grandfathered group health plans that require designation of a PCP must provide written notice to each participant describing the plan’s requirements regarding designation of a PCP and access to specialty care, either as a stand-alone notice or in any SPD or benefit summary provided to participants. See the Sample Documents box on this page for a sample notice.

Religious Organizations Exempt from Providing Contraceptive Benefits) Notice of Availability of Separate Payments for Contraceptive Services: For each plan year to which the exemption applies, the TPA or insurer must provide to plan participants and beneficiaries written notice of the availability of separate payments for contraceptive services contemporaneous with (to the extent possible), but separate from, any application materials distributed in connection with enrollment (or re-enrollment) in group health coverage that is effective beginning on the first day of each applicable plan year. Failure to incorporate the PHSA mandates into non-grandfathered plans may expose the employer to an excise tax.