Health Plan Checkup Seminar - 6-23-2009 by plr18961

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									                       IMPORTANT INFORMATION


This breakfast briefing is similar to any other legal seminar program
   designed to provide general information on pertinent legal topics. The
   statements made and any materials distributed as part of the seminar
   are provided for educational purposes only. They do not constitute
   legal advice nor do they necessarily reflect the views of Holland & Hart
   LLP or any of its attorneys other than the speaker.


This breakfast briefing is not intended to create an attorney-client
   relationship between you and Holland & Hart LLP. If you have specific
   questions as to the application of U.S. law to your activities, you should
   seek the advice of your legal counsel.
Time for a Check-Up: Is Your Medical Plan Ready for
  Mental Health Parity, GINA, and Michelle’s Law?
              Jane Francis & Brenda Berg
                     June 23, 2009
Mental Health Parity and
Addiction Equity Act of 2008
§ Signed into law October 3, 2008 (dangled from
  Stimulus Bill).
§ Effective for plan years beginning after October 3,
  2009 (January 1, 2010 for calendar year plan).
§ Guidance to be issued by October 3, 2009 – too
  late?
§ Applies to all group health plans (self-funded and
  insured plans covering 50 or more employees).
§ Establishes floor for insured plans; state law may
  have additional requirements.
Mental Health Parity and
Addiction Equity Act of 2008
§ Amends ERISA Section 712, Code Section 9812
  and Public Health Service Act Section 2705.
§ Possible penalties for failing to comply:
  § Excise tax of $100/day for failure to provide benefits per
    individual affected (under Code Section 4980D),
    minimum $2,500 penalty, maximum $500,000 per year.
  § ERISA fiduciary penalties.
  § Individuals, Department of Labor can sue for benefits
    that should have been provided by the plan.
Mental Health Parity and
Addiction Equity Act of 2008
§ A group health plan may not impose more
  restrictive financial requirements or treatment
  limits on mental health OR substance abuse
  benefits (MHSA benefits) than the predominant
  requirements or limits imposed on medical and
  surgical benefits.
§ If a plan covers out-of-network benefits for medical
  and surgical benefits, it must do so for MHSA
  benefits.
Mental Health Parity and
Addiction Equity Act of 2008
§ Examples of Financial Requirements:
  §   co-pays
  §   deductibles
  §   co-insurance
  §   dollar caps per visit
  §   out-of-pocket limits
  §   annual or lifetime dollar limits
Mental Health Parity and
Addiction Equity Act of 2008
§ Examples of Treatment Limits:
  § outpatient visit limit
  § inpatient day limit
  § coverage for out-of-network benefits
Mental Health Parity and
Addiction Equity Act of 2008
§ What are the predominant requirements or limits
  imposed on medical and surgical benefits?
  § Broadly defined by plan terms as most common (i.e.,
    not gastric by-pass or TMJ limits).
  § Appears to be applied separately to each benefit option.
Mental Health Parity and
Addiction Equity Act of 2008
§ Possible ways to comply:
  § Change limits on MHSA benefits to match medical and
    surgical benefits.
  § Change limits on medical and surgical benefits to match
    MHSA benefits.
  § Eliminate some or all MHSA benefits.
Mental Health Parity and
Addiction Equity Act of 2008
§ Cost exemption: A plan is exempt if the plan’s
  qualified actuary can demonstrate that compliance
  would increase plan costs by at least 2% in the
  first year and by at least 1% thereafter.
§ Exemption only applies for plan year following
  year in which cost data is supported. Plan must
  comply for first 6 months of plan year and then
  provide actuarial report for next year’s exemption.
§ Notification to participants and to DOL or DHHS
  when exemption is claimed, showing actual cost
  data. Agencies may audit to confirm.
Mental Health Parity and
Addiction Equity Act of 2008
§ To-Do List:
  § Review group health plan provisions and determine how
    to respond.
  § Amend group health plan, SPDs and communication
    materials.
  § Timely distribute SMM.
  § If benefits are being enhanced, make sure participants
    are informed.
Genetic Information Nondiscrimination Act
of 2008 (GINA)

§ Signed into law May 21, 2008.
§ Effective dates:
   § For provisions for nondiscrimination in health
     insurance: plan years beginning after May 2009
     (January 1, 2010 for calendar year plans).
   § For provisions prohibiting employers from
     discriminating: November 21, 2009.
§ Enforcement is through EEOC, as part of
  Title VII of Civil Rights Act of 1964, for
  employers of 15 or more employees.
Genetic Information Nondiscrimination Act
of 2008 (GINA)



§ Also amended ERISA Section 702(b) and Code
  Section 9802 (as well as PHSA, Medicare and
  HIPAA). No small employer exception.
§ Enforcement identical to MHPAEA, although under
  ERISA rather than the Code: excise tax of
  $100/day/individual, minimum $2,500 – maximum
  $500,000 per year.
§ Fiduciary breach.
§ Individual and DOL causes of action.
Genetic Information Nondiscrimination Act
of 2008 (GINA)



§ Notice of proposed rulemaking issued by EEOC
  on February 25, 2009, primarily addresses
  employment issues.
   § FMLA disclosure for seriously ill family member must be
     treated as confidential medical record.
§ Final regulations were required to be issued by
  May 21, 2009 but to date have not been issued.
§ Establishes floor for insured plans; state law may
  have more stringent requirements.
Genetic Information Nondiscrimination Act
of 2008 (GINA)

§ GINA prohibits employers from
  discriminating against an employee with
  respect to the compensation, terms,
  conditions, or privileges of employment
  based on genetic information.
   § This prohibits discrimination in group health
     plans based on genetic information.
Genetic Information Nondiscrimination Act
of 2008 (GINA)

§ Group health plans, employers, and insurers
  must not request or require genetic
  information for underwriting or enrollment
  purposes, and must not increase premiums
  based on genetic information.
§ Plans and insurers are also prohibited from
  using HIPAA “protected health information”
  that is genetic information for underwriting
  purposes.
Genetic Information Nondiscrimination Act
of 2008 (GINA)

§ Does NOT apply to life insurance, disability
  insurance and long-term care insurance.
§ Does not require coverage of genetic testing
  or treatment.
Genetic Information Nondiscrimination Act
of 2008 (GINA)

§ GINA is not retroactive (not applicable to
  acts or omissions prior to effective date);
  however, any genetic information collected
  prior to the effective date may not be used
  for the purposes prohibited by GINA.
Genetic Information Nondiscrimination Act
of 2008 (GINA)

§ Employers must maintain confidentiality of genetic
  information.
   § HHS is required to revise HIPAA privacy regulations to
     address privacy of genetic information (including any
     collected prior to GINA’s effective date).
Genetic Information Nondiscrimination Act
of 2008 (GINA)

§ What is genetic information?
§ Genetic information includes any test that
  determines variations in a covered person’s
  DNA (includes family members and fetus),
  information regarding family history of a
  particular disease and participation in
  genetic counseling or research.
§ “Family member” to 4th degree relative
  (great- grandparents).
Genetic Information Nondiscrimination Act
of 2008 (GINA)

§ Genetic information does not include the
  manifestation of the disease by the
  individual (e.g., breast cancer versus BRCA
  gene marker).
§ TPA/insurer may consider genetic
  information when addressing treatment
  alternatives (e.g., preventive mastectomy).
Genetic Information Nondiscrimination Act
of 2008 (GINA)

§ Examples of prohibited actions by group
  health plans or sponsors: treating as pre-
  existing condition; limiting options available
  to individuals (e.g., fully-insured HMO v.
  self-insured indemnity option); restricting
  employment activity based on genetic
  information.
§ Wellness initiatives/health risk assessment
  programs. Employers should not receive
  any identifiable information.
Genetic Information Nondiscrimination Act
of 2008 (GINA)

§ To-Do List:
   § Watch for final regulations
   § Ensure no genetic information is used to
     discriminate in benefits, and if collected, is kept
     confidential.
   § Be ready for HIPAA privacy changes due to
     regulations.
   § Consider structure of health risk assessment
     programs. Build in a “decline to answer” option
     or provide disclaimer regarding use of
     information?
Michelle’s Law

§ Signed into law October 9, 2008.
§ Effective for plan years beginning after October 3,
  2009 (January 1, 2010 for calendar year plan).
§ Guidance expected before effective date.
§ Applies to “medically necessary” leaves of
  absence that begin during that plan year - treating
  physician determines when leave begins.
§ No small employer exception.
Michelle’s Law

§ Adds new ERISA Section 714, new Code
  Section 9813 and also new section to
  PHSA.
§ Some states already prohibit use of student
  status in insured plans.
§ Enforcement same as MHPAEA and GINA.
Michelle’s Law

§ Group health plans must allow a dependent
  child who is covered as a student at a post-
  secondary educational institution to continue
  his or her coverage for up to one year if the
  child loses student status and would lose
  coverage due to a medically necessary
  leave of absence (or reduction in course
  load) caused by serious illness or injury, as
  certified by the child’s treating physician.
Michelle’s Law

§ Coverage may terminate before one year if
  coverage would terminate under the plan for
  some other reason (e.g., age limit, change
  in marital status).
§ The plan must provide notice of the new
  provision in any notice provided by the plan
  regarding certification of student status,
  written in clearly understandable language.
Michelle’s Law

§ Coordination with COBRA
  § Currently unclear.
  § Does COBRA coverage period begin on
    the date that student status is lost (even
    though, under Michelle’s Law, coverage
    cannot be terminated for regular COBRA
    termination event of loss of dependent
    status), or does the COBRA coverage
    period begin after Michelle’s Law
    coverage expires?
Michelle’s Law

§ Is tax-free coverage of the child still
  allowed? Losing student status may cause
  the child to no longer qualify as a tax
  dependent.
§ If no longer a tax dependent, employer-
  provided coverage must be taxed, and
  employee premiums for that portion cannot
  be paid through cafeteria plan (akin to
  domestic partner coverage).
Michelle’s Law

§ To-Do List:
  § Amend group health plan for any required changes.
  § Consider whether to also extend coverage for other
    comparable events under the plan.
  § Revise SPD and communication materials and plan
    certification forms regarding certification of student
    status to include plainly understandable description of
    extension of coverage under Michelle’s law.
  § Stay tuned for resolution of COBRA and cafeteria plan
    issues.
Medicare Secondary Payer
Reporting
§ Changes were part of Medicare, Medicaid, and
  SCHIP Extension Act of 2007 (Section 111),
  effective January 1, 2009.
§ New electronic reporting rules require insurers,
  TPAs, and plan administrators (for self-insured
  plans that are self-administered) of plans with 20
  or more employees to report plan data to the
  Centers for Medicare and Medicaid Services
  (CMS) to facilitate determining situations when the
  plan is primary to Medicare.
§ Situations may include “working aged,” ESRD,
  disabled individuals.
Medicare Secondary Payer
Reporting
§ The information to be reported on a
  quarterly basis includes 23 required
  elements (name, DOB, type of coverage,
  effective date of coverage, employer size,
  employee status (active, COBRA, etc.),
  social security numbers (or Medicare Health
  Insurance Claim Numbers) and requires
  information about dependents as well as
  employees.
§ HIPAA and state privacy laws do not apply.
Medicare Secondary Payer
Reporting
§ Plans must first register with CMS, then CMS will assign
  quarterly reporting periods for information. The registration
  periods are:
   § For plans that already had voluntary data sharing agreements with
     Medicare: October 1-31, 2008.
   § For plans that did not already have voluntary data sharing
     agreements with Medicare: April 1-30, 2009 (testing period through
     June 30, 2009).
§ HRA ONLY plans are not required to register until May 1,
  2010.
§ Under the new reporting process, CMS will establish if
  members are Medicare secondary based on the various
  data elements provided by the plan as opposed to the plan
  making the primacy determination.
Medicare Secondary Payer
Reporting
§ Reporting for employees and those with
  initial date of coverage on or after January
  1, 2009 will begin with first reporting period.
§ The deadline for submitting records for
  spouses and other family members whose
  initial date of coverage is prior to January 1,
  2009 was extended to the first reporting
  deadline in the first quarter of 2011 (formerly
  was 2010).
Medicare Secondary Payer
Reporting
§ Failure to report required data may result in
  penalty of $1,000 per day per person for which the
  data should have been submitted.
  § Penalty is assessed against the responsible reporting
    entity; TPAs may or may not be RREs based on their
    status.
§ The government, a beneficiary, a provider or
  another claimant may sue the insurer, the TPA
  and/or the sponsor for double damages.
Medicare Secondary Payer
Reporting
§ Response required within 30 days of CMS
  inquiry (“demand letter”) regarding particular
  individuals.
§ Penalties apply for failure to respond.
§ Remember other penalties – no inducement.
Medicare Secondary Payer
Reporting
§ To-Do List:
  § Make sure plan is registered.
  § Employer must be ready to provide the data in the
    required format.
  § Revise enrollment forms if necessary to collect required
    information (social security numbers) going forward.
  § Collect required information for dependents with
    coverage as of January 1, 2009, or require such
    information as part of next open enrollment.
  § Review TPA service contract: if they are contractually
    responsible for data transmission, do they indemnify the
    plan sponsor for any failure?
  § Check www.cms.hhs.gov/MandatoryInsRep for updates
    to the GHP user guide.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ American Recovery and Reinvestment
  Act of 2009 (ARRA)
  § Signed into law February 17, 2009
§ Guidance: Notice 2009-27, IRS and
  DOL websites
  § http://www.irs.gov/newsroom/article/0,,id=20450
    5,00.html
  § http://www.dol.gov/ebsa/cobra.html
COBRA Subsidy and Second Chance
COBRA Enrollment

§ COBRA subsidy is effective for first
  coverage period after February 17, 2009
  (generally March 1, 2009).
§ Subsidy applies to Federal COBRA
  (including PHSA) and continuation coverage
  under FEHBP and comparable state laws
  (“mini-COBRA”).
§ Applies to all group health plans, even
  vision, dental – except health FSA.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ Federal government will provide
  COBRA subsidy of 65% for up to 9
  months to individuals who are qualified
  beneficiaries as a result of an
  involuntarily termination from
  employment on or after September 1,
  2008 and on or before December 31,
  2009 (“assistance eligible individual” =
  AEI).
COBRA Subsidy and Second Chance
COBRA Enrollment

§ Subsidy ends before 9 months if COBRA
  terminates for another reason (e.g., failure
  to pay).
§ Also terminates earlier when an AEI
  becomes eligible for coverage under
  another group health plan or Medicare.
  § AEI must notify the plan in writing of eligibility
    for other coverage – if fails to do so, tax penalty
    is 110% of subsidy (unless due to reasonable
    cause and not willful neglect).
COBRA Subsidy and Second Chance
COBRA Enrollment

§ Ineligible for subsidy if exceed income limits
  (modified adjusted gross income of $145k or
  $290k for joint return – phaseout begins at
  $125k or $250k joint).
§ BUT plan must still provide coverage upon
  payment of 35% unless AEI waives the
  subsidy by notifying the employer.
§ Waiver is permanent.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ AEI is eligible for subsidy only if AEI
  pays 35% of the amount the AEI would
  otherwise be required to pay for
  COBRA coverage.
§ Example -- $1,000 COBRA premium:
  § Employee must pay $350 (35%).
  § Subsidy is $650 (65%).
COBRA Subsidy and Second Chance
COBRA Enrollment

§ What if there’s a severance agreement
  that says employer will pay 50% of the
  $1,000 COBRA premium?
  § Employer pays $500.
  § Employee’s portion is $500 before
    subsidy – so that’s the only portion eligible
    for the 65% subsidy:
     § Subsidy is $325 (65% of $500).
     § Employee pays $175 (35% of $500).
COBRA Subsidy and Second Chance
COBRA Enrollment

§ What if there’s a severance agreement that
  says employer will pay COBRA premium for
  6 months?
  § No subsidy until after those 6 months.
  § How many months of subsidy are available?
    Depends on how employer treats COBRA:
     § If employer starts COBRA period with the severance
       from employment, then AEI is eligible for 3 months of
       Federal subsidy.
     § If employer starts COBRA period with loss of
       coverage after severance COBRA payments run out,
       then AEI is eligible for 9 months of Federal subsidy.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ Possible solution to employer subsidy
  situation: Employer instead provides a
  taxable severance payment equal to
  the non-taxable COBRA payment it
  would have provided.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ CAREFUL: The subsidy doesn’t apply to
  the portion of any premium for individuals
  who are not qualified beneficiaries on the
  day before the qualifying event – such as
  some domestic partners and same-sex
  spouses, or a dependent child added later.
  § Costs must be allocated, first to cost of covering
    AEIs, then to covering non-AEIs – it’s the
    incremental cost.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ What does it mean to be involuntarily
  terminated?
§ “An involuntary termination means a
  severance from employment due to the
  independent exercise of the unilateral
  authority of the employer to terminate the
  employment, other than due to the
  employee’s implicit or explicit request,
  where the employee was willing and able to
  continue performing services.”
COBRA Subsidy and Second Chance
COBRA Enrollment

§ Involuntary termination is based on all the facts
  and circumstances and may include:
   § layoff with right of recall, or temporary furlough
   § employment termination for cause (except for gross
     misconduct)
   § constructive discharge
   § voluntary termination for good reason
   § termination due to absence from work due to disability
     or illness
   § reduction in force, even if there’s a voluntary “buy-out”
   § failure to renew a contract when it expires
   § failure to continue employment for seasonal employees
   § employer lockout (but not a strike)
COBRA Subsidy and Second Chance
COBRA Enrollment

§ If an employer denies an employee
  eligibility for the subsidy, the employee
  may appeal to the DOL (or CMS) and
  get an expedited review. The standard
  or review is “de novo.”
§ The DOL (or CMS) must make its
  determination within 15 days.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ Employer could be liable for incorrect payroll
  tax reporting and payments if:
  § employer calculates the subsidy incorrectly; or
  § employer offers the subsidy for what wasn’t an
    involuntary termination.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ IRS will accept employer’s determination of
  what is an involuntary termination if the
  determination is “consistent with a
  reasonable interpretation of the applicable
  statutory provisions and IRS guidance.”
§ Employer must maintain supporting
  documentation of its determination.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ Employer pays subsidy portion for now and then
  receives a credit against payroll tax liability on
  Form 941 (after employee’s 35% has been paid).
  § Employer can decide whether to reduce payroll tax
    deposits or claim as an overpayment at the end of the
    quarter.
  § If there is an excess, can apply to next quarter or
    request a refund.
  § Detailed documentation is required (but isn’t submitted).
  § Potential cash-flow hardship for the employer if payroll
    tax withholdings are less than subsidy.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ COBRA Second Chance Election Period
  § There is a “second chance” enrollment period
    for individuals who were eligible for COBRA due
    to an involuntary termination on or after
    September 1, 2008 and before February 17,
    2009, if they did not initially elect COBRA
    coverage, or if they elected but later dropped
    COBRA coverage.
  § The extended enrollment period only applies to
    Federal COBRA and continuation coverage
    under FEHBP – not state coverage.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ If coverage is elected, it is effective for the
  first coverage period beginning on or after
  February 17, 2009 (generally March 1,
  2009). That would coincide with eligibility
  for the COBRA subsidy.
§ Employer can allow election to start with a
  later period – but 9-month subsidy period
  will still run from earliest date.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ Employer notices for subsidy and
  second chance enrollment:
  § Notify all qualified beneficiaries who
    experienced a qualifying COBRA event
    from September 1, 2008 through
    December 31, 2009.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ DOL has issued 4 different model notices:
  § General notice (full version).
     § You don’t have to send if they already got an election
       notice, unless the notice was sent after February 17,
       2009 without including the subsidy information.
  § General notice (abbreviated version, for those
    who currently have COBRA coverage).
  § Alternative notice (for state law continuation).
  § Extended election period notice.
     § Send to all AEIs not currently on COBRA.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ Notice Deadlines:
  § For second chance enrollment, deadline
    was April 18, 2009.
  § No deadline for subsidy notice, but regular
    COBRA notice requirements aren’t met
    until it’s sent.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ Eligible individuals have 60 days after they
  are notified to elect second chance
  enrollment for COBRA coverage.
§ If employer offered a different type of
  coverage than employee was enrolled in
  before, then individuals have 90 days to
  elect.
COBRA Subsidy and Second Chance
COBRA Enrollment

§ To-Do List:
  § Make sure AEIs have received notices.
  § Develop procedures to determine eligibility for
    subsidy (whether involuntarily terminated) and
    proper calculation of subsidy.
  § Revise COBRA notices, SPDs, and other
    communication materials to include subsidy
    information going forward.
  § Work with payroll to get subsidy reported and
    credited on 941, and to keep appropriate
    documentation.
  § Consider subsidy in severance payment design.
HITECH Act

§ Health Information Technology for
  Economic and Clinical Health Act
  (HITECH Act) – part of ARRA.
§ Generally effective February 17, 2010.
§ Expands privacy and security
  provisions of HIPAA.
HITECH Act

§ Civil and monetary penalties were
  increased for HIPAA violations from
  $100 per violation to $1,000 or more
  per violation, and individuals whose
  protected health information was
  accessed in violation of HIPAA will
  share in any recovery.
HITECH Act

§ Enforcement provisions and audits
  were expanded.
  § State AGs can go after HIPAA violation in
    Federal Court.
  § DHHS must periodically audit covered
    entities and business associates to
    assess compliance.
HITECH Act

§ Business associates of covered entities
  are now treated just like covered
  entities for most HIPAA privacy and
  security provisions, including civil and
  criminal penalties, so the requirements
  now apply directly to business
  associates.
§ May need to revise business associate
  agreements.
HITECH Act

§ An organization that provides data
  transmission services to a covered
  entity (or another business associate)
  will now be deemed a business
  associate.
§ Plans might need to enter into new
  business associate agreements and if
  already have, need to revise.
HITECH Act

§ New requirements for notifying affected individuals
  in the event of a breach of unsecured protected
  health information (PHI).
§ If the breach affects at least 500 individuals,
  required to notify major media outlets and HHS.
§ Expected to be effective September 15, 2009.
§ Minimize need to make notifications: make sure
  most data is either de-identified or secured
  (encrypted or destroyed).
HITECH Act

§ Must provide individuals an accounting of
  PHI disclosures made through electronic
  health records for treatment, payment, and
  health care operations during the previous
  three years.
§ Effective January 1, 2014 for entities that
  already have electronic health records,
  otherwise effective January 1, 2011.
HITECH Act

§ Effective February 17, 2010, an individual
  may request a copy of his or her electronic
  health record in electronic format or may
  direct the covered entity to send a copy to
  another entity or person.
§ Electronic health record changes may
  require significant revisions to electronic
  health record software.
§ Regulations are required to be issued.
HITECH Act

§ To-Do List:
  § Revise business associate agreements for changes.
  § Make sure plan has a business associate agreement
    with any organization that provides data transmission
    services for the plan.
  § Review HIPAA policies and procedures to determine
    whether any changes are required.
  § Create or revise an incident response plan to
    incorporate new data breach notification requirements.
  § If using electronic health records, prepare to issue
    records in electronic format and make changes to
    electronic health record software after regulations are
    issued.
CHIPRA Special Enrollment Rights and State
Premium Assistance


§ Children’s Health Insurance Program
  Reauthorization Act of 2009 (CHIPRA -
  signed into law February 4, 2009.
§ Special enrollment rights and state
  premium assistance provisions are
  effective April 1, 2009.
CHIPRA Special Enrollment Rights and State
Premium Assistance


§ The group health plan must allow
  employees and their dependents (who are
  eligible but not currently enrolled) to enroll in
  the plan upon termination of coverage under
  Medicaid or an SCHIP program due to loss
  of eligibility, or becoming eligible for
  premium assistance from the State under a
  Medicaid or SCHIP program.
§ The employee has 60 days to notify the
  employer and make the change.
CHIPRA Special Enrollment Rights and State
Premium Assistance


§ States may subsidize an employees’ costs
  under a group health plan that is “qualified
  employer coverage” (generally coverage
  where employer provides 40% of the cost of
  coverage).
§ Employers can opt out of state payments
  and require employees to pay full share and
  be directly reimbursed from state.
CHIPRA Special Enrollment Rights and State
Premium Assistance


§ Employers must allow employees to
  elect out of group health plan coverage
  on a monthly basis to enroll in SCHIP.
§ Allowed under cafeteria plan?
CHIPRA Special Enrollment Rights and State
Premium Assistance


§ Two new disclosure requirements for premium
  assistance:
   § Notice explaining availability of state premium
     assistance; and
   § Disclosure to the state providing sufficient plan
     information (e.g., benefits, premiums, cost-sharing) to
     allow state to determine whether employees or their
     dependents are eligible for assistance and/or whether
     the SCHIP program will provide supplemental coverage.
§ Notice requirements aren’t effective until first plan
  year after model notice is issued (required to be
  issued by February 17, 2010, so likely effective
  date of January 1, 2011 for calendar year plans).
CHIPRA Special Enrollment Rights and State
Premium Assistance


§ To-Do List:
   § Determine whether any states in which
     employer operates has state premium
     assistance programs, and determine whether to
     opt-out.
   § Amend group health plan and revise SPD and
     communication materials for monthly opt-out,
     and special enrollment with 60-day notice.
   § Amend cafeteria plan and revise SPD and
     communication materials if necessary.
   § Be aware of future notice requirements.
Cafeteria Plan Final Regulations

§ Proposed regulations were issued August 6,
  2007.
  § Written plan requirement
  § Changes in nondiscrimination testing
  § No retroactive amendments!
§ Final regulations are expected to be issued
  soon!! Possible effective date January 1,
  2010.
Cafeteria Plan Final Regulations

§ To-Do List:
  § Be prepared to amend cafeteria plan
    documents and revise SPDs and
    communication materials, possibly before
    January 1, 2010.
  § Be ready to review cafeteria plan design and
    practices of final regulations, particularly
    nondiscrimination testing (are you passing
    now?).
Other Reform Initiatives
§ Tax Equity for Health Plan Beneficiaries Act (H.R.
  2625) was introduced in Congress May 21 – would
  end taxation of domestic partner benefits.
§ Obama administration and Congressional reform
  §   tax (some) employer-provided benefits?
  §   pay-or-play mandate?
  §   expanded Medicaid?
  §   new public health insurance option?
  §   insurance co-ops?
Q&A

       Thank you!

           Jane O. Francis
            (303) 295-8599
      jfrancis@hollandhart.com
                  and
            Brenda R. Berg
            (303) 295-8029
       brberg@hollandhart.com

        Holland & Hart LLP
          P.O. Box 8749
      Denver, CO 80201-8749

								
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