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Patient Protection and Affordable Care Act / Health Reform

The first changes required under the Affordable Care Act will commence with renewals beginning on September 23, 2010 and after. Below is a summary of the changes that you will be required to make at your renewal. This is just a summary specifically designed with GISC client needs in mind. Your GISC Account Executive will review the requirements in detail during your renewal meeting.

PRE-EXISTING CONDITIONS

If your plan contains a pre-existing conditions limitation clause, you may no longer impose it upon dependents under the age of 19.

DEPENDENT COVERAGE

The definition of a dependent must be expanded to include all children up to their 26 th birthday, regardless of dependent status or the availability of other employer coverage. The plan can no longer require financial dependence, student status or that the dependent reside with the employee. This provision mandates a new enrollment opportunity and requires that the Employer notify employees and allows open enrollment for dependents that become eligible due to the change. GISC can provide you with a Notice of Opportunity to Enroll that is based on the model language provided under the statute. Grandfathered plans can exclude coverage if the dependent has the availability of other coverage through an employer. See more about Grandfathered plans below.

PREVENTIVE CARE

Preventive services must be covered with no cost sharing requirements such as co-payments, deductibles or co-insurance. There can also be no annual dollar limit for preventive services. This requirement applies to High Deductible Health Plans who have a Health Savings Account component as well. Grandfathered plans may not have to comply until 2014. Preventive services include but are not limited to:

  • blood pressure, diabetes and cholesterol testing;
  • cancer screenings;
  • immunizations;
  • well child visits;
  • oral and vision well child care and
  • adult routine visits.

ANNUAL & LIFETIME LIMITS

The Act includes a prohibition on annual and lifetime limits for “essential health benefits”. Although the lifetime limits that your plan may have will have to be removed through 2014 you can convert your current lifetime maximum to an equal annual maximum. Permitted annual maximum amounts are graduated from $750,000 in 2010 to the unlimited maximum beginning with renewals in January of 2014. The Act also requires that you provide notice to plan participants that the lifetime limit no longer applies and allow any eligible person who is no longer covered because they exceeded the lifetime limit to re-enroll in the plan. GISC can provide you with a Notice of Lifetime Limit for your use. Your GISC Account Executive will provide additional details upon request.

GRANDFATHERING

The Act also included a provision allowing for “grandfathered” plans to postpone some of the provisions that would normally apply with renewals beginning on September 23, 2010 until 2014. A grandfathered health plan is a group health plan that was in force on March 23, 2010 provided the plan does not make certain changes. The grandfather rules apply separately to each benefit offered under the plan. Even if your plan has grandfathered status you will still need to comply with the more significant requirements in the Act most of which are stated above. Should you wish to consider grandfather status contact your GISC Account Executive. If it has been determined that you are a grandfathered plan you must provide notice of this to your plan participants.

NOTICE REQUIREMENTS

Three of the mandated changes require that you as the Employer provide notice to your employees. Within the next few weeks GISC will have a new section on our website for PPACA/Health Reform. This section will contain the model notices for your use.

FLEXIBLE SPENDING ACCOUNTS

For those employers who offer medical flexible spending accounts effective with plan years January 1, 2011 some over-the-counter medications will only be reimbursable with a physician’s prescription. Please refer to the information sent to you earlier this week.

MISCELLANEOUS and More to Come

  • You will be required to report the value of health coverage on W-2’s.
  • There will be new guidelines for internal and external appeals.
  • The Act provides for the creation of 46 oversight & policy panels.
  • As the Act is put into effect there will be more changes as the reg writers prepare new interpretation.

GISC will provide you with updated information as it becomes available. We will also work with you to amend your plan at renewal.

Should you have questions in the interim please contact your Account Executive.


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