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Health Reform and Your Health Plan Compliance Alert
Andrea L. Balogh,
Executive Vice President and General Counsel
Meritain Health
April 14,2010
Executive Vice President and General Counsel
Meritain Health
April 14,2010
As expected on Thursday, March 25, 2010, prior to the Congressional holiday recess, the slightly modified H.R. 4872, the Health Care and Education Tax Credit Reconciliation Act of 2010 (the “Reconciliation Bill”) was passed by the House of Representatives. The President signed the Reconciliation Bill on Tuesday, March 30, 2010, which amends certain portions of H.R. 3590, the Patient Protection and Affordable Care Act (the “Bill”).
Click here for updated tables previously provided to include an overview of the final language of those key provisions in the Bill (as modified by Reconciliation) that may impact your plan.
As previously mentioned, a little-talked-about provision of the Bill has significant impact on whether the specific reform initiatives in the Bill need to be implemented for your existing plan. This provision is the “Grandfather Rule,” which states that individuals enrolled in group health plans that were in effect on March 23, 2010 are exempt from complying with many of the key provisions of the Bill. The Grandfather Rule is not limited to current plan participants but rather allows you to add new employees and dependents as well as family members of current employees to your grandfathered plan.
Plainly stated, you will not have to amend your current plan to provide for many of the required changes in the Bill. Further, the Bill does not specifically require that the terms of your plan remain the same in order for the grandfather to continue to apply. Therefore, it appears that you will be able to make changes to your current plan design without jeopardizing your plan’s “grandfather status.” It remains to be seen whether subsequent regulations and/or guidance will clarify this rule.
The information we have provided in the attached tables is meant to be a high level reference guide to the key elements of the Bill and is not meant to provide any specific guidance on the impact of the Bill to your plan. The tables have been divided into those reforms which will need to be incorporated into your plan for plan years beginning after October 1, 2010 and those reforms that do not take effect until 2014. It is important to note that if your plan year begins before October 1, 2010, you will not need to incorporate any of the required reforms until your 2011 plan year.
We have also included an overview of other significant revenue raising initiatives in the Bill and their effective dates. The tables highlight the reforms that apply to all plans, regardless of their grandfather status, as well as a description of those reforms that do not apply to grandfathered plans.
We are available to work in partnership with you and your advisors in providing specific guidance on the impact health reform may have on your plan design, as well as options for addressing required changes, if any.
In the meantime, if you have any urgent questions, please send them to your Client Relationship Manager and we will make sure to have them reviewed by our legal and compliance staff. We’ll be communicating regularly in the weeks to come.
In the meantime, if you have any urgent questions, please send them to your Client Relationship Manager and we will make sure to have them reviewed by our legal and compliance staff. We’ll be communicating regularly in the weeks to come.
