Employers – Prepare for a Health Care Reform Audit Now
Starting in 2012, the Department of Labor Employee Benefits Security Administration (EBSA) will begin to administer health plan audits to examine employer compliance with health care reform.
The following health care reform requirements need to be in effect for health plans
1. Grandfathered plans (plans in effect as of March 23, 2010) will need to demonstrate:
- A statement that shows the employer believes it is grandfathered within the meaning of Section 1251 of the Affordable Care Act
- Documents showing the status of the plan as of March 23, 2010
- Information showing any new annual or lifetime limits on benefits
Grandfathered plans are not obligated to comply with health care reform provisions such as coverage of preventive care services without cost-sharing, claims appeal and external review processes, coverage for emergency services in-network, and coverage of essential health benefits, among other exclusions.
2. Non-grandfathered plans will need to demonstrate:
- Documentation referencing preventive services for each plan year
- The plan’s internal claims and appeals procedures
- First and final notices of adverse benefit determinations
- Contracts with independent review organizations or third-party administrators providing external review
3. Both grandfathered and non-grandfathered plans will need to demonstrate:
- Notices describing enrollment opportunities for dependent children to remain on their parent’s plan until age 26
- A list of individuals who had their coverage rescinded and the reasons for it
- A summary of benefits and coverage (SBC) showing the benefits and coverage rules for each benefit package that employers offer
- A summary plan description (SPD) showing the terms and conditions of the plan
It is in an employer’s best interest to create a checklist of health care reform provisions and the documentation required for each in case they are subject to an audit by the Department of Labor. Employers should stay in touch with their benefits adviser about health care reform updates so that they can be ready in case an audit does occur.
The information contained in this Focus Benefits Flash is provided as general guidance only and is not intended to be legal or other professional advice. The provisions with health care reform are constantly changing and guidelines may change as updates are issued by the federal government.