DOL issues more guidance on health care reform implementation

The U.S. Department of Labor (DOL) says it will focus on helping employers and health plans understand and apply the new health care reform law. Recently the DOL posted new guidance on its website. Some of the highlights are:

• A plan may impose extra conditions on eligibility of children for coverage up to age 26 if a child isn’t actually a son, daughter, stepchild, adopted child or foster child of the employee. For example, if the employee wants to enroll a grandchild or a niece or nephew, the plan could require proof that the child is a dependent for income tax purposes.
• Although recently issued interim regulations state that more than a five percent decrease in the employer’s contribution rate will cause a group health plan to lose grandfathered status, the plan can take steps to prevent being surprised by an immediate loss of grandfathered status. The plan can require the employer to disclose its contribution rate as of March 23, 2010, as well as its contribution rate for the plan under renewal and any future decreases in contribution rates.
• In a multiemployer plan, a decrease of more than five percent in an employer’s contribution amount won’t have any impact on grandfathered status as long as the employee’s contribution rate doesn’t go up.
• Although non-grandfathered plans must have an internal appeals and external review process in place, they have a grace period until July 1, 2011, to update the content of the notices that must be given to an individual whose claim and appeal are denied.

If you’re not sure whether your plan is grandfathered, and what rules apply, talk with your health plan adviser. If you participate in the Vigilant Group Benefits Trust, the required changes for non-grandfathered plans will be effective on January 1, 2011.