1.)  Grandfathered Health Plans

On June 14, 2010 the U.S. Departments of Health and Human Services, Labor and Treasury issued new regulations for health coverage that was in place on March 23, 2010.

Grandfathered plans can keep their status if these routine changes occur:

• Voluntary increase benefits.
• Conform to required legal changes.
• Continue to enroll new employees and dependents as participants.
• Make modest adjustments to existing benefits.
• Raise premiums to reasonably keep pace with health care costs.
• A new insurance carrier is chosen.  On November 17, 2010 the Departments amended the grandfathered plan regulations to permit insured group health plans to change insurance policies or carriers.  The regulation applies to changes to group health insurance coverage that are effective on or after November 15, 2010.

A plan will no longer be considered grandfathered if the following occurs:

• Benefits are significantly cut or reduced.
• Cost sharing requirements and deductibles are significantly raised.
• Employer contributions are significantly lowered.
• Annual limits are tightened or added.

For more information on what changes will cause employers and insurance plans to lose their grandfathered status, please visit:

http://www.healthcare.gov/news/factsheets/keeping_the_health_plan_you_have_grandfathered.html

2.)  Provisions for plan years starting on or after Sept. 23, 2010 

• No lifetime or annual limits on the dollar value of essential benefits.
• No rescissions on coverage when people get sick and have previously made an unintentional mistake on their application.
• Extension of parent’s coverage for young adults up to age 26.  See the fact sheet on dependent coverage.
• Insurers are prohibited from excluding pre-existing conditions (except in grandfathered individual health insurance plans) for those younger than 19.
• Issuers are required to implement an appeals process for coverage determination and claims on all new plans. 
• No cost sharing requirements for certain preventive services. 
• Access to OB-GYNS and pediatricians without a referral by a separate care provider.
• If a plan or issuer covers emergency care in a hospital, the plan or issuer may not require prior authorization for services even if the health care provider is out of network.
• An excise tax will be imposed on group health plans that discriminate in favor of highly compensated individuals.  

3.)  Model notices issued by the Department of Labor 

The Affordable Care Act requires plan and issuers to provide specific notices to participants enrolled in a healthcare plan.  The Department of Labor Employee Benefits Security Administration http://www.dol.gov/ebsa/  has posted model notices on its website.

The notices for dependent coverage, lifetime limits and patient protections require a plan or issuer to give an individual an opportunity to enroll that continues for at least 30 days (including the written notice to enroll).  The notices and enrollment opportunity must be provided beginning not later than the first day of the first plan year beginning on or after September 23, 2010.  To maintain status as a grandfathered health plan, a plan must provide disclosure to participants that it believes it is a grandfathered plan. 

Grandfather Notice:   http://www.dol.gov/ebsa/grandfatherregmodelnotice.doc

Dependent Coverage Notice:  http://www.dol.gov/ebsa/dependentsmodelnotice.doc

Lifetime Limits Notice:  http://www.dol.gov/ebsa/lifetimelimitsmodelnotice.doc

Patient Protection Notice:  http://www.dol.gov/ebsa/patientprotectionmodelnotice.doc

4.)  Small Business Tax Credit

Effective for 2010, the small business tax credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.  The tax credit is available to businesses that pay at least half of the cost of single coverage for their employees, employers with less than 25 employees and employers who pay wages averaging less than $25,000 per year.  Certain eligibility must be met and that information is available at http://www.IRS.gov.  Owners can use this small business tax credit calculator, powered by H & R Block, to help estimate how their businesses may benefit from the tax credit.  This tool provides an estimate only and is not intended as legal advice. H & R Block is not affiliated with Focus Benefits Group.

5.)  Pre-existing Condition Insurance Plan

The PCIP offers coverage to uninsured Americans who have been unable to obtain health insurance due to a pre-existing condition.

To be eligible for coverage the following must apply:

• You must be a citizen or national of the U.S. or lawfully present in the U.S.
• You must have been uninsured for at least the last 6 months.
• You must have had a problem getting insurance due to a pre-existing condition.
• For children under age 19 or persons who live in Massachusetts only – you must have been quoted a premium of 200% or more of the Pre-existing condition insurance plan premium for your state.
• For more detailed information about the plan visit www.pcip.gov.

6.)  Early Retiree Reinsurance Program

The ERRP provides reimbursement to sponsors of participating employment-based plans for a portion of the health benefits for early retirees and their spouses, surviving spouses and dependents.  The Secretary will reimburse sponsors for certain claims between $15,000 and $90,000.   Health benefits that qualify for claims include medical, surgical, hospital, prescription drug, and other benefits that may be specified by the Secretary of Health and Human Services.   The program started on June 1, 2010 and was set to last until January 1, 2014 or until funds were depleted.  The overwhelming response to the program caused the program to stop accepting applications as of May 5, 2011 based on the availability of funding. For more information about the program please visit www.errp.gov.

7.)  Potential Employer Penalties

Nondiscrimination Requirements for Insured Health Plans

The IRS announced on December 23, 2010 that they will be delaying the enforcement of the new nondiscrimination provisions applicable to insured group health plans.  One of the provisions of the new health care law stated that insured group health plans must comply with the nondiscrimination requirements for self-funded plans including rules that the plan does not discriminate in favor of highly compensated individuals as to eligibility to participate.  In addition, the benefits provided under the plan may not discriminate in favor of participants who are highly compensated individuals.  This new requirement does not apply to grandfathered plans.

The IRS has determined that the provisions will not be required until after regulations or other administrative guidance of general applicability has been issued. 

Employers with 50 or More Employees

Beginning in 2014, employers with 50 or more employees will face penalties if one or more of their full-time employees obtains a premium credit through an exchange.  If an employer does not provide its full-time employees the opportunity to enroll in minimum essential coverage and one or more full-time employees enrolls for coverage in an exchange and qualifies for a premium tax credit, then a penalty is assessed.   In addition, if an employer offers its full-time employees the opportunity to enroll in minimum essential coverage and one or more employees qualifies for a premium tax credit because the coverage is unaffordable, then a penalty is assessed.  Penalties apply to each employee who receives a tax credit and will be assessed on a monthly basis.  No penalties will be assessed on the first 30 full-time employees.

The content on this page is intended for general informational purposes only.  The regulations with the new healthcare law are constantly changing.  We will continue to monitor all of the new legislation and provide updates when they become available.  Our primary source of information for our updates is the Department of Health and Human Services.   Our secondary source will be the insurers themselves, and as they issue their guidelines, we will provide them to you.  You should seek qualified advice prior to taking action based on this or other information you might receive.