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Planning for 2011 Open Enrollment

With annual enrollment season fast approaching, now is the time to consider new 2011 disclosure obligations.  In particular, with the enactment of the Affordable Care Act (the “Act”), several new notices must be provided to plan participants.  Many plan sponsors may want to consider including these new notices in the 2011 open enrollment materials that they send to employees.  These notices include:

  • Notice Regarding Grandfathered Status:  Any sponsor that wishes to preserve its plan’s grandfathered status must provide participants with a statement informing them that the plan believes it is a grandfathered health plan under the Act and that, as a result, some of the changes required by the Act may not apply.  Because this notice must be contained in all plan materials provided to participants or beneficiaries describing the benefits provided under the plan, it should also be incorporated into a plan’s summary plan description (“SPD”). If a plan has already lost its grandfathered status, or does not intend to assert that status, no such notice is required.

    The Department of Labor (“DOL”) has issued a model notice that plan sponsors may use to satisfy this requirement.  (Please see our June 2010 article for additional details on the requirements for, and implications of, maintaining grandfathered status.)

  • Special Enrollment Notice for Dependent Children to Age 26:  Effective for plan years beginning on or after September 23, 2010, both grandfathered and non-grandfathered group health plans that offer dependent child coverage must provide such coverage up to a child’s 26th birthday.  Moreover, children who previously lost coverage due to reaching the plan’s limiting age, or who were never eligible for coverage due to their age, must be given an opportunity to enroll in the plan.

    Plan sponsors must provide participants with both a special enrollment notice and at least 30 days to elect coverage.  The special enrollment notice may be included with open enrollment materials, but the notice and the enrollment deadline must be prominently displayed.  The DOL has issued a model notice to help plan sponsors comply with this requirement, as well.  (Please refer to our May 2010 article for additional details on the new requirements and guidance applicable to coverage of dependent children.)

  • Special Enrollment Notice Relating to Lifetime Limits:  Effective for plan years beginning on and after September 23, 2010, all group health plans must eliminate lifetime limits on “essential health benefits.” Individuals who are not currently enrolled in a plan because they have previously exhausted the plan’s lifetime limit must be given written notice and an opportunity to re-enroll in the plan (assuming those individuals are otherwise still eligible for coverage).  The plan must allow such individuals at least 30 days to enroll.

    Technically, this notice need be provided only to individuals who have reached the plan’s lifetime limit.  However, plan sponsors might consider including the notice in the plan’s annual enrollment materials.  The DOL has also issued a model notice that provides plan sponsors with language designed to comply with this requirement. (Please refer to our July 2010 article for more information on the Act’s requirements with respect to lifetime and annual limits.)

  • Patient Protection Notice:  Sponsors of non-grandfathered plans must provide a notice describing a participant’s right to select any available participating primary care provider, to designate a pediatrician as a primary care provider, and to obtain obstetrical or gynecological care without preauthorization or referral.  While this notice may (and probably should) be included in a plan’s open enrollment materials, it must also be incorporated into the plan’s SPD.  And yes, the DOL has issued a model notice to help plan sponsors comply with this requirement.

  • OTC Drug Reimbursements:  Effective January 1, 2011, account-based reimbursement plans, such as flexible spending accounts and health reimbursement accounts, cannot reimburse participants for expenses incurred for over-the-counter medicines or drugs (other than insulin) without a prescription.  Although specific notice of this change is not legally required, plan sponsors should alert employees to this change during open enrollment so that they can make informed decisions as to how much to contribute to their accounts during 2011.

  • Children’s Health Insurance Program Reauthorization Act (CHIPRA) Notice:  Effective for plan years beginning on and after February 4, 2010, employers must notify employees of the potential availability of premium assistance under the Children’s Health Insurance Program.  This notice must go to all eligible employees residing in any state that offers premium assistance, regardless of whether those employees are actually enrolled in the employer’s health plan.

    If this notice is combined with annual enrollment materials, the notice must appear separately and in a manner which ensures that employees who may be eligible for the premium assistance could reasonably be expected to appreciate its significance.  Not surprisingly, the DOL has issued a model notice that may be used for this purpose.  (Please refer to our March 2010 article for additional details on the CHIPRA notice).

In addition to these new notices, plan sponsors should not forget to include other existing notices, such as the annual notice regarding Women’s Health and Cancer Rights, in their annual enrollment materials.