Group Health and Welfare Required Notices

Tucker Administrators periodically lists these notices as a reminder of a group health plan sponsor's requirement to provide certain information to plan participants, and in some cases, all employees.  This list was included in the February 2011 newsletter, but has been updated to reflect federal agency revisions to the 2011 Medicare Part D enrollment period, claims and W-2 reporting changes.  If you have any questions about this material, or wish to discuss further, please do not hesitate to contact us at 704-525-9666.

 One of the main objectives of health and welfare regulatory compliance is to provide appropriate explanations about the group health plan rights, benefits, and obligations. A required notice provides information to the covered member that is deemed important enough to be given special attention. Some call for an action, usually within a specified period of time. Others provide the information necessary to make a decision about enrolling in a plan. Required notices that are ignored, or are not given in a timely manner to covered members can be a regrettable experience (think COBRA notices). Start the New Year off with peace of mind by reviewing the required notifications and work them into your plan year now.

Most of the notices are required either annually, and/or before the enrollment process. To streamline this process, we suggest that the notices be given in the new hire packet, and also include them with the enrollment materials so that all employees will have the notices before the actual enrollment. Individual notices will still have handled separately. COBRA notices and HIPAA creditable coverage certificates are best left to your COBRA and HIPAA administrator. COBRA especially has a complex series of notices that consist of very precise time and event criteria. Medicare Part D disclosure notices also have specific criteria, but can be easily handled. Many of these notices have model language on government agency websites, for which links are provided.

Below is an overview of a number of group health plan notices, and a brief description of each. It is not intended to be a complete list and is for informational purposes only.  Please call us any time at 704-525-9666 if you wish to discuss.

Summary Plan Description (SPD)

 This is the main vehicle for informing plan members about the entire health plan and how it operates, including claims procedures. It is written so that the average participant can read and understand the contents. The plan administrator must give participants this within 90 days of becoming covered under the plan. For those who have self-funded plans with Tucker Administrators, the SPD and Plan Document (see below) are the same, so there are never any differences in information.

Summary of Material Modification (SMM)

This describes any material modifications to a plan and the changes made to the SPD. Timely distribution of updated SPDs will satisfy the SMM requirement.

Plan Document

This is the legal document that governs the group health plan. It must be provided to a plan participant upon request, and the plan sponsor must have copies available for examination. If requested to be mailed, it must be done so within 30 days of the request, with a copying charge of no more than $0.25 per page. For those who have self-funded plans with Tucker Administrators, the SPD and Plan Document (see below) are the same, so there are never any differences in information.

IRS Form 5500

This from varies from plan to plan. Some plans have limited reporting requirements, and some are exempt. Check with your plan administrator.

COBRA (Consolidate Omnibus Budget Reconciliation Act)

This is a group of notifications that deal with the right to elect/purchase health coverage for a specified period of time when coverage is lost due to a qualifying event. Contact Tucker Administrators’ COBRA Administration staff if you have questions about these Notices.

• Initial COBRA Notice
• Notice to Plan Administrator
• Individual COBRA Notice
• COBRA Election Notices
• Notice of Insufficient Payment
• Notice of Premium Change
• Notice of COBRA Availability  
• Notice of Unavailability of COBRA
• Notice of Early Termination of Coverage
 

Notice in Connection with Extended Election Periods (shown below) 

• The American Recovery and Reinvestment Act (ARRA) added a temporary 65% subsidy for individuals involuntarily terminated between September 1, 2008 and December 31, 2009.

• The Department of Defense Appropriations Act of 2010 extended the subsidy for individuals involuntarily terminated through February 28, 2010 and further extended the subsidy period from 9 to 15 months.

• The Temporary Extension Act of 2010 further extended the subsidy for individuals involuntarily terminated through May 31, 2010.

HIPAA Notice of Privacy Practices

This notice describes how the group health plan’s medical information about the covered member may be used and disclosed and how the member or their authorized representative can get access to this information. This notice (or instructions on how to obtain the notice) must be provided at least every three years after April 13, 2004 (for small plans) or April 13, 2003 (for large plans).

http://www.hhs.gov/ocr/privacy/hipaa/understanding/coveredentities/notice.html 

HIPAA Certificate of Creditable Coverage

A Notice of written certification of period of creditable coverage under plan or COBRA continuation coverage, or statement certifying 18 months of coverage. The group health plan or health insurance issuer must provide to participants and beneficiaries, at the time individual ceases to be covered by plan or COBRA, and on request made within 24 months after the date such coverage ends. It is frequently provided with COBRA notice. See the Department of Labor Model Notices: http://www.dol.gov/ebsa/pdf/CAGAppC.pdf

 
General Notice of Preexisting Condition Exclusion

This notice will now be used only for those participants age 19 or older until January 1, 2014. On January 1, 2014, group health plans may not impose pre existing condition exclusions on applicants of any age. The notice explains that a group health plan may not impose preexisting condition exclusion with respect to a participant or dependent before notifying the participant, in writing, of the existence and terms of any preexisting condition exclusion under the plan. This includes the length of the plan’s look-back period, the maximum preexisting condition exclusion period under the plan, and how the plan will reduce this maximum by creditable coverage.

The general notice is required to be provided as part of any written application materials distributed for enrollment. If a plan does not distribute such materials, the notice must be provided by the earliest date following a request for enrollment that the plan, acting in a reasonable and prompt fashion, can provide the notice.  The plan can include its general notice of preexisting condition exclusion in the summary plan description (SPD) if the SPD is provided as part of the application materials. If not, this general notice must be provided separately. See the Department of Labor Model Notices: http://www.dol.gov/ebsa/pdf/CAGAppC.pdf

A written disclosure to the individual of determination of the period of creditable coverage, including the source and substance of any information on which plan or issuer relied; the remaining pre-existing condition exclusion period; and any appeal procedures established by the plan or issuer. It must be provided within a reasonable period of time after receiving creditable coverage information from an individual that is not enough to offset exclusion period. See the Department of Labor Model Notices: http://www.dol.gov/ebsa/pdf/CAGAppC.pdf

All employers are required to post a notice either prepared by or approved by the EEOC regarding pertinent provisions of the Act in a conspicuous place where notices to employees and applicants for employment are customarily posted. The required posters can be found on the EEOC website at: http://www1.eeoc.gov/employers/poster.cfm.

Individual Notice of Genetic Information Nondiscrimination Act (GINA) required if genetic information is used for toxic substance monitoring or for certain disclosures of genetic information.

Notice of Special Enrollment Rights

On or before the time an employee is offered the opportunity to enroll in the plan, the plan must provide the employee with a description of special enrollment rights, and ensures that the special enrollment notice is provided at or before the time an employee is initially offered the opportunity to enroll in the plan. This may mean making it a separate notice, rather than information provided in the SPD. The plan can include its special enrollment notice in the SPD if the SPD is provided as part of the application material. If not, the special enrollment notice must be provided separately. See the Department of Labor Model Notices: http://www.dol.gov/ebsa/pdf/CAGAppC.pdf 

Posted Notice of Family and Medical Leave Act (FMLA)

All public agencies, local educational agencies, and employers with at least 50 employees working at least one year for 1,250 hours within 75 miles of the employer must post a notice explaining FMLA and the military leave amendments in a location that is available to all employees. Written guidance is required for an employee informing the employer of the need for FMLA leave. Model notices can be found at: http://www.dol.gov/whd/fmla/finalrule.htm

Posted Notice of Uniformed Services Employment and Reemployment Rights Act (USERRA)

All public and private employers, regardless of size, must post a notice in a location that is available to all employees explaining the rights, benefits and obligations of returning service members to family and medical leave benefits. The poster may be found at: http://www.dol.gov/vets/programs/userra/poster.htm

Enrollment Notice for Women’s Health and Cancer Rights Act (WHCRA) and Annual notice for Women’s Health and Cancer Rights Act (WHCRA)

At enrollment, a plan must provide a notice describing the benefits required under WHCRA. The enrollment notice must describe the benefits that WHCRA requires the group health plan to cover, specifically:

• All stages of reconstruction of the breast on which the mastectomy was performed,
• Surgery and reconstruction of the other breast to produce a symmetrical appearance,
•  Prostheses, and
• Physical complications resulting from mastectomy (including lymphedema)

The enrollment notice must describe any deductibles and coinsurance limitations applicable to such coverage. (Note: Under WHCRA, coverage of the required benefits may be subject only to deductibles and coinsurance limitations consistent with those established for other medical/surgical benefits under the plan or coverage.) This Notice must also be given annually. See the Department of Labor Model Notices: http://www.dol.gov/ebsa/pdf/CAGAppC.pdf

Newborns’ and Mothers’ Health Protection Act (NMHPA)

A group health plan that provides maternity or newborn infant coverage just include a statement in the SPD explaining requirements regarding length of hospital stay for childbirth, as it relates to the care of the mother and/or newborn child.

Michelle’s Law’s Notice

This Notice will now be used rarely. Under the Patient Protection and Affordable Care Act (PPACA) group health plans and issuers are generally required to provide dependent coverage to age 26 regardless of student status of the dependent. Nonetheless, under some circumstances, such as a plan that provides dependent coverage beyond age 26, Michelle’s Law provisions may apply. A group health plan or issuer must include with any notice regarding a requirement for certification of student status for coverage, a description of the Michelle’s law provision for continued coverage during medically necessary leaves of absence. The notice must describe Michelle’s Law:

• That it provides extended coverage to college students taking a medically necessary leave that are otherwise covered and eligible for the plan
• It provides coverage under the plan may not end for a college student covered under the plan who takes a medically necessary leave from school prior to the earlier of:
• 1 year after the leave begins or
• The date the child otherwise ceases to be eligible (e.g. attains the specified age)
• The plan may require certification 

Children's Health Insurance Program (CHIP) Notice

The Children's Health Insurance Program Reauthorization Act of 2009 extended the Children's Health Insurance Program (CHIP). The new Act allows states to elect to subsidize the cost of enrolling eligible children and their families in employer-provided group health plans, and employer plans are required to provide certain special enrollment rights related to such coverage. Employers are required to provide an annual written notice to employees about the potential opportunities for premium assistance through this program. 

The notice must inform employees of the potential premium assistance opportunities currently available for coverage under the employer's plan, and it must contain contact information for the state program. The notice goes to each employee, regardless of enrollment status, describing potential opportunities currently available in the State in which the employee resides for premium assistance under Medicaid or CHIP for health coverage of the employees or his dependents. Employers can provide the materials in the enrollment materials as long as it goes to all employees. If the employer attempts to distribute this notice in the enrollment materials typically provided only to eligible employees, there could be persons required to receive the notice that are not a part of this distribution group so they will need to make a separate mailing to non-enrollees. Therefore, because the CHIP notice must be provided to all employees who reside in an affected state, an employer can remedy this by expanding the group that gets the enrollment materials (and CHIP notice) to all employees or by sending a stand-alone CHIP notice to the non-eligible employees. The initial notice must be provided by the later of: the first day of the first plan year beginning after February 4, 2010 or May 1, 2010, and annually thereafter. See the Department of Labor Model Notices: http://www.dol.gov/ebsa/pdf/CAGAppC.pdf

Mental Health Parity Notice

This Notice explains the criteria for medical necessity determinations made under a group health plan with respect to mental health or substance use disorder benefits. It is not applicable to groups with fewer than 50 employees. The plan administrator must provide the Notice to current and potential participants upon request.

Qualified Medical Child Support Order (MCSO) Notice

Notice to participants, any child named in a MCSO, and his or her representative, regarding receipt of a MCSO directing the plan to provide health insurance coverage to a participant’s noncustodial children. Notice must include plan’s procedures for determining its qualified status. A separate notice must be provided as to whether the MCSO is qualified. Plan administrator of group health plan must promptly provide notice of receipt of MCSO. A separate notice regarding whether MCSO is qualified must be provided within a reasonable time after its receipt.

National Medical Support (NMS) Notice

The Notice used by the state agency responsible for enforcing health care coverage provisions in a MCSO. Depending upon certain conditions, the employer must complete and return Part A of the NMS notice to the State agency or transfer Part B of the notice to the plan administrator for a determination on whether the notice is a qualified MCSO. The employer must send Part A to the State agency, or Part B to plan administrator within 20 days after the date of the notice, or sooner, if reasonable. Administrator must promptly notify affected persons of receipt of the notice and the procedures for determining its qualified status. Within 40 days, the plan administrator must complete and return Part B to the State agency and must also provide required information to affected persons. Under certain circumstances, the employer may be required to send Part A to the State agency after the plan administrator has processed Part B.

Medicare Part D-Changed in 2011

As a result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), employers offering group health plan coverage with a prescription drug benefit are required to notify all Medicare participants before October 15 of each year whether that coverage constitutes creditable prescription drug coverage. Creditable coverage here is defined as the employer-sponsored drug benefit is, on average for all plan participants, expected to pay out as much as standard Medicare prescription drug coverage pays. If the plan offers creditable coverage, the notice must indicate that it does, define creditable coverage and explain why it is important. If the plan does not offer creditable coverage, the notice is still required and must clearly state this, as well as information about when to enroll in Part D:

• Prior to an individual’s Initial Enrollment Period for Part D
• Prior to the effective date of coverage for Medicare-eligible employees that enroll the employers plan,
• When prescription drug coverage ends or becomes non-creditable, or
• Upon request

Notice of Creditable or Non-creditable Coverage (revised to reflect October 15 to December 7 enrollment period)   https://www.cms.gov/CreditableCoverage/Model%20Notice%20Letters.asp

Disclosure to Centers for Medicare and Medicaid (CMS) Employers must disclose to CMS that their plan is creditable or non-creditable. The disclosure is electronic only, the website is: https://www.cms.gov/CreditableCoverage/40_CCDisclosure.asp#TopOfPage

Medicare Part D-Retiree Drug Subsidy

Employers who wish to sponsor a prescription drug plan with retiree prescription drug coverage that is at least as good as Part D coverage may apply electronically through the Retiree Drug Subsidy Center, and notify Medicare eligible employees that the plan coverage is creditable.

Health Care Reform

The initial implementation of The Patient Protection and Affordable Care Act ("PPACA") has introduced some new notice requirements. They are: 

No Lifetime Limit

Plans and issuers are required to give written notice that the lifetime limit on the dollar value of all benefits no longer applies and that an individual, if covered, is once again eligible for benefits under the plan. Additionally, if the individual is not enrolled in the plan or health insurance coverage, or if an enrolled individual is eligible for but not enrolled in any benefit package under the plan or health insurance coverage, then the plan or issuer must also give such an individual an opportunity to enroll that continues for at least 30 days (including written notice of the opportunity 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. For individuals who enroll under this opportunity, coverage must take effect not later than the first day of the first plan year beginning on or after September 23, 2010.

These notices may be provided to an employee on behalf of the employee’s dependent. In addition, the notices may be included with other enrollment materials that a plan distributes to employees, provided the statement is prominent. For either notice, if a notice satisfying the requirements is provided to an individual, the obligation to provide the notice with respect to that individual is satisfied for both the plan and the issuer. See DOL website for Model Notice:http://www.dol.gov/ebsa/compliance_assistance.html

Annual Limit Waiver

The notice is to make the information easier for consumers that have annual limits to understand.  Health plans with waivers must tell participants that their health care coverage is subject to an annual dollar limit that is lower than what is required under the law.  Specifically, the yearly notice must include the dollar amount of the annual limit along with a description of the plan benefits to which the limit applies.  Plans must illustrate how the annual limit would impact a consumer who was hospitalized, so participants can understand how far their coverage will reach if they become seriously ill.  To do so, the updated model notice compares a policy’s annual limit with examples demonstrating the average cost of a night’s stay in the hospital.  Plans with waivers must attest annually to their compliance with the consumer disclosure requirement.  This notice must be on the front of the materials explaining the health plan in 14-point bold font.  Please contact Tucker Administrators at 704-525-9666 for recommended model notice language, or go to http://cciio.hhs.gov/resources/files/06162011_annual_limit_guidance_2011-2012_final.pdf that includes the model language within the June 17, 2011 guidance release.

Notice of Adverse Benefit Determinations, Internal/External Review Notices-Added in 2011

These notices are provided by the health plan carrier or in the case of a self-funded plan, the TPA of the plan sponsor.  The notice requirements updated by the PPACA include providing diagnosis codes if requested, information on appeals rights, and written in culturally and linguistically manner as specified by the regulations. The most common are Spanish, Mandarin Chinese, Navajo and Tagalog.  The revised notices are effective January 1, 2012. Contact Tucker Administrators if you have any questions about these Notices.

• Notice of Adverse Benefit Determination
• Notice of Final Internal Adverse Benefit Determination
• Notice of Final External Review Decision

Notice of Opportunity to Enroll in connection with Extension of Dependent Coverage to Age 26

The interim final regulations extending dependent coverage to age 26 provide transitional relief for a child whose coverage ended, or who was denied coverage (or was not eligible for coverage) under a group health plan or health insurance coverage because, under the terms of the plan or coverage, the availability of dependent coverage of children ended before the attainment of age 26. The regulations require a plan or issuer to give such a child an opportunity to enroll that continues for at least 30 days (including written notice of the opportunity to enroll), regardless of whether the plan or coverage offers an open enrollment period and regardless of when any open enrollment period might otherwise occur. This enrollment opportunity (including the written notice) must be provided not later than the first day of the first plan year beginning on or after September 23, 2010. The notice may be included with other enrollment materials that a plan distributes, provided the statement is prominent. Enrollment must be effective as of the first day of the first plan year beginning on or after September 23, 2010. See DOL website for Model Notice:  http://www.dol.gov/ebsa/compliance_assistance.html

Any plan communication given to an employee or dependent must include a statement that the plan is grandfathered, along with contact information for questions or complaints. The notice's purpose is to allow employees to make more informed choices. The regulations include a model notice. Because this notice requirement applies to “any” plan communication, all benefit communications (open enrollment materials, summary plan descriptions, new hire packets, and so forth) must include the notice. As long as the plan is grandfathered, the plan sponsor must maintain records verifying the plan's grandfathered status. Participants, beneficiaries, and state or federal officials are entitled to examine these records. See DOL website for Model Noticehttp://www.dol.gov/ebsa/compliance_assistance.html

 Non-grandfathered plans must provide notice to participants of certain new rights, such as the right to designate a primary care physician or pediatrician and rights relating to obstetrical/gynecological and preventive services. This notice must be provided with the plan's summary plan description or other similar description of benefits under the plan. See DOL website for Model Notice: http://www.dol.gov/ebsa/compliance_assistance.html

W-2 Reporting

This informational reporting is required as part of the Patient Protection and Affordable Care Act (PPACA) to provide useful and comparable consumer information to employees on the cost of their health care coverage.  Form W-2, Wage and Tax Statement, is the form used to provide an employee this information.   It should be entered in Box 12 on the W-2 Form, with the Code DD to identify the amount.

This reporting does not cause employer-provided health care coverage to become taxable. 

Reporting becomes mandatory for the calendar 2012 W-2 Forms that are required to be provided to employees in January 2013.

To read more details about the new W-2 reporting, please read our May, 2011 E-Update.  Updated information is provided in IRS Notice 2012-9.

If you have any questions about this article, please call us any time at 704-525-9666.