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December 31, 2013

As anyone who is involved with the administration of employer group health plans is aware, 2013 has been a year filled with new regulations that will affect the future of the administration of these health plans. With all of the new regulations, it is easy to forget some of the annual requirements that apply to group health plans. In fact, with all of the recent regulatory activity, we are issuing this client alert a little later than we typically do. Here is a summary of the annual participant notice requirements that apply to group health plans:

Women’s Health and Cancer Rights Act (“WHCRA”)

• Each year participants must receive a summary of a health plan’s coverage for mastectomies and breast reconstructive services. If the SPD is reissued each year, the notice can be included in the SPD.

Medicare Part D Notice of Creditable or Non-Creditable Coverage

• This annual notice must be provided to any participant (employee or dependent) who has coverage under Medicare Part A or coverage under Medicare Part B and who lives in the service area of a Medicare Part D prescription drug plan. While employers usually know whether an employee is eligible for Medicare, employers often do not have this information regarding dependents. As a result, providing the notice to all participants ensures compliance. Notice should have been provided by October 15. Again, if the SPD is reissued each year, the notice can be included in the SPD.

HIPAA Notice of Privacy Practices

• In the past, this notice was required to be distributed to participants once every three years. In 2013, the Department of Health and Human Services issued final HIPAA privacy and security regulations. The final regulations expand the provisions that must be included in the notice of privacy practices. The new notice of privacy practices must include an explanation of a covered entity’s obligation to notify affected individuals following a breach in unsecured PHI and must address the Genetic Information Nondiscrimination Act (“GINA”). The updated notice was required to be either (1) posted on a health plan sponsor’s intranet by September 23, 2013 and distributed with annual open enrollment materials or; (2) distributed to each participant by November 23, 2013.

Children’s Health Insurance Program Reauthorization Act (“CHIPRA”)

• Since 2009, special enrollment rights to immediately enroll in an employer’s health plan arise if an individual becomes eligible for a state premium assistance subsidy under Medicaid or CHIP. The subsidy helps low income individuals pay for employer coverage, transferring them from government-sponsored health programs to employer health plans. While most states offer premium assistance subsidies, Michigan is one of the few which does not. CHIPRA imposes a notice requirement on employers who maintain health plans with participants residing in one or more states providing a premium assistance subsidy. The notice must be provided annually to all employees residing in each premium assistance subsidy state, including employees not enrolled in the plan. Model notice language, which is periodically updated, is available on the DOL website and includes contact information for each state offering a premium assistance subsidy. If you have participants living outside of Michigan, you may be required to comply with this notice obligation.

Summary of Benefits and Coverage

• Health Care Reform has added a new participant notice requirement known as the Summary of Benefits and Coverage (“SBC”). The purpose of the SBC is to provide certain information in a prescribed format to participants in an employer’s medical plan so they can easily compare the information to other plans which they may be eligible for, including the coverages which will be offered on the Health Insurance Marketplaces in 2014. In addition, the SBC for the 2014 plan year must indicate if the plan constitutes “minimum essential coverage” and whether the plan provides “minimum value.”

Notice Regarding Grandfathered Plan Status

• Plans that were in effect prior to the enactment of Health Care Reform are exempt from some of the new insurance market reforms under Health Care Reform so long as they retain “grandfathered plan” status. One of the requirements to retain grandfathered plan status is including certain disclosures in SPDs and other plan materials (such as annual open enrollment materials) provided to participants describing the plan’s benefits. The disclosure must state that the plan is grandfathered and must provide contact information for questions and complaints. Model notice language is available on the DOL website.

If you have any questions regarding the annually required participant notices, please contact our practice leader Sue Emery @ sue@emerybenefitsolutions.com for more information.#healthcarereform #ACA

Courtesy of Miller Johnson http://www.millerjohnson.com/pubs/xprPubDetail.aspx?xpST=PubDetail&pub=2077