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Information to Know

Transgender coverage clarification

The final healthcare reform non-discrimination rules, or what is being referred to in the industry as 1557 rules, were released by the Department of Health and Human Services (HHS) on May 13, 2016. Meritain Health has received a lot of questions related to these rules with regard to transgender coverage. Before we can answer this question, we must look at who is impacted by these regulations.


Who is impacted?

Plans must comply ONLY IF they receive federal financial assistance. Financial assistance does not mean simply receiving payments from Medicare or Medicaid; federal financial assistance from HHS includes receiving premium tax credits through qualified health plans on the Public Exchange, and payments from Medicare Parts A, C and D. Those impacted will need to comply as of their first plan year on or after January 1, 2017. Please note, plans should consult their own counsel to confirm applicability.


Now that we have an understanding of who must comply with these requirements, we can look at what the guidance actually states with regards to coverage of transgender individuals. 


What did the guidance say with regards to benefits for transgender individuals?

The final non-discrimination rules expanded the definition of discrimination to include protection for transgender individuals. Plans cannot limit coverage of covered medically necessary benefits based on an individual’s gender at birth or "identified sex" at the time of the service/claim. For example, if an individual was born a female, but now identifies as a male, the plan cannot deny claims for women’s preventive care simply because the individual identifies as male. Plans are permitted to impose reasonable medical necessity guidelines to determine whether a particular service is medically appropriate or not. 


Plan Sponsors should consult with their own legal counsel to determine if Section 1557 applies to them and if any benefit changes are required within their plan design including whether they want to opt in or opt out of covering the Gender Reassignment Surgery.


Is any action required at this time?

There is no action required of those not directly impacted by this guidance. If you wish to provide additional coverages voluntarily to transgender individuals, you may request an amendment to your plan. There is no requirement to cover transgender surgeries. 


If you have determined you are directly impacted and have to comply with the nondiscrimination requirements, please keep in mind that for significant documents used by the plan, notices offering assistance to those individuals with limited English skills must be provided on all documents in at least the top 15 non-English languages spoken within your state.


If you have any questions, please contact your Client Solutions team.

Increases to ERISA civil monetary penalties for inflation

The Department of Labor (DOL) has increased penalties for employee benefit plans failing to comply with certain provisions. The full list of penalties may be found here: Penalties Fact Sheet


Here is a list of some of the increases that may impact employer health plans:


Type of FilingFormer penalty amountNew penalty amount
Failure to File Form 5500 $1100 per day  $2063 per day
Failure to provide an SBC $1000 per failure $1087 per failure
GINA violations $100 per participant, per day $110 per participant, per day
Failure to disclose CHIP assistance $100 per day $110 per day
Failure to file MEWA M-1 filings $1100 per day $1502 per day

If a violation was reported prior to August 1, 2016, the former penalty amounts will apply. Violations reported after August 1, 2016, will have the new penalty amounts apply. The Department will adjust the penalties annually beginning in 2017 and no later than January 15 of each year.


If you have any questions, please contact your Client Solutions team.

Information about exchange options may be added to COBRA Notice

Plans that send their own COBRA notices will want to be aware that on June 21, 2016, the DOL, HHS and IRS issued a single FAQ to confirm that additional information about Exchange coverage may be added to COBRA election notices. The FAQ clarified that plans are free to go beyond the basic information in the DOL’s model notice and add additional information, such as (1) how to get help with Exchange enrollment, (2) information about financial assistance, (3) Exchange websites and contact information, and (4) other information that may help qualified beneficiaries choose between COBRA and other coverage options.


If you have any questions, please contact your Client Solutions team.


Compliance Quarterly is being provided as an informational tool. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this publication and any attachments, Meritain Health is not exercising discretionary authority over the plan and is not assuming a plan fiduciary role, nor is Meritain Health providing legal advice.


Published November 15, 2016