The Department of Health and Human Services, the Department of Labor and the Internal Revenue Service continue to roll out regulations implementing various provisions of the Patient Protection and Affordable Care Act ("PPACA"), as amended by the Health Care and Education Reconciliation Act of 2010.  These regulations have created increased notice obligations that will require plan sponsors to revise enrollment materials, summary plan descriptions ("SPD"), and other plan documents.  Plan sponsors must ensure that their increased notice obligations are timely met.  Generally, the notices listed below must be provided no later than the first day of the first plan year beginning on or after September 23, 2010 (i.e., January 1, 2011 for calendar year plans).  Practically, this means that these notices must be incorporated into 2011 open enrollment materials.

Applicable to All Group Health Plans (Including Grandfathered Plans):

Special Enrollment Notice for Dependant Coverage of Children Up to Age 26

The regulations implementing mandatory dependent coverage of children up to age 26 require plan sponsors to provide a special enrollment notice.  The special enrollment notice provides an opportunity to enroll that continues for at least 30 days for children who are now eligible to be covered (e.g., children who graduated in May; aged out and have not been covered; are on COBRA on account of aging out; or never were eligible on account of age when the participant was first eligible for plan coverage).  If a plan sponsor of a calendar year plan decides to provide the special enrollment notice earlier in connection with their open enrollment materials, the special notice regarding dependant coverage should be prominent and the enrollment deadline should be highlighted.  If the plan is grandfathered and chooses to utilize the rules pertaining to grandfathered plans, the notice should explain that, until the plan year beginning on or after January 1, 2014, only adult children who are not eligible for other employer-sponsored group coverage (other than on account of either parent) may enroll.  To review the model notice issued by HHS, please click here.  This notice may need to be customized to fit your plan.

Notice Regarding Plan's Grandfathered Status

In order to maintain a plan's grandfathered status, the disclosure requirements of the regulations regarding grandfathered plans require plan sponsors to include a statement, in any plan materials provided to participants, describing the benefits provided under the plan that are considered grandfathered.  The HHS has issued model language which can be incorporated into already existing SPDs and other plan documents.  To review this model, please click here. Note that the model language may need revision to accompany your plan provisions.  If the plan has lost its grandfathered status or was never grandfathered, disclosure that the plan is not a grandfathered plan is optional.

Special Enrollment Notice for Individuals Who Have Reached Lifetime Limit

The regulations regarding the elimination of lifetime limits require plan sponsors to give a special enrollment notice to individuals who have reached the lifetime limit under the plan and are otherwise still eligible for coverage.  The regulations specify that only individuals who have reached the lifetime limit are required to receive the notice.  The model notice issued by HHS can be found here.

Notice of Rescission of Coverage

Plan sponsors are now required to give a 30 calendar day advance notice before coverage can be rescinded (i.e., coverage revoked retroactively).  As you may recall, PPACA narrowed the situations where coverage can be rescinded to cases of fraud or intentional misrepresentation of a material fact in addition to the usual failure to pay premiums.  Plan sponsors generally will need to revise both plan document and SPD provisions describe how benefits can be lost due to rescission as limited by PPACA.

Applicable to Non-Grandfathered Plans:

Patient Protection Disclosures

The regulations regarding patient protections under PPACA require plan sponsors to provide a notice regarding participants' rights to (a) choose a primary care provider or a pediatrician when the plan requires participants or subscribers to designate a primary care physician; and (b) obtain obstetrical or gynecological care without prior authorization.  This notice should be incorporated in the plan's SPD or provided as a separate addendum whenever the SPD is distributed.  Model language issued by HHS can be found here.  Grandfathered plans are not subject to these patient protection mandates and thus, disclosure is not applicable.

Don't Forget Other Notices:

• Plans continue to have the obligation to annually provide notices to participants regarding Women's Health and Cancer Rights.
• If a group health plan is a stand-alone retiree-only plan, the regulations regarding grandfathered plans clarified that such plans are not subject to the insurance reform mandates of PPACA and thus, are not subject to the notice requirements listed above.  It is recommended that plan sponsors revise enrollment materials, SPDs, and other plan documents to include a disclaimer that their retiree-only plan is not subject to PPACA.