Many employers are aware of the substantive requirements imposed on group health plans under the recently enacted Patient Protection and Affordable Care Act and its reconciliation-related amendments (referred to collectively as the "Act"). For example, group health plans must cover children to age 26 and can no longer impose lifetime dollar limits on essential health benefits. But, many employers are not aware that they must either provide special enrollment periods or revise their current open enrollment process in order to comply with the Act. As employers are reviewing the substantive provisions of their group health plans for compliance with the Act, they should also be reviewing their enrollment materials. Please note that these requirements apply to all employers, including governmental and church entities.
Adult Children
The Act provides that if a group health plan provides coverage to an employee's child, the plan must cover the child until he reaches age 26. A group health plan must offer a special enrollment period to a child (1) whose coverage under the plan ended before the child reached age 26, (2) who was denied coverage, or (3) who was not eligible for coverage under the plan because of the child's age. The plan must provide written notice of this opportunity to enroll, which can be provided to either the child or the employee. The enrollment period must last at least 30 days and must begin no later than the first day of the first plan year beginning on or after September 23, 2010 (January 1, 2011 for calendar year plans).
A plan can use its annual open enrollment period to satisfy this requirement. If a child enrolls during this special enrollment period, coverage must begin no later than the first day of the first plan year beginning on or after September 23, 2010 (again, January 1, 2011 for calendar year plans). If the plan chooses to use its annual open enrollment period to satisfy these requirements, the written notice is "prominent" in the materials. Any child enrolling in the plan for this reason must be treated as a special enrollee and must be given the right to enroll in all of the benefit packages available to similarly situated individuals upon initial enrollment.
Individuals Who Previously Reached a Lifetime Limit
The Act provides that group health plans can no longer impose a lifetime limit on the dollar value of coverage for "essential health benefits." A group health plan must offer a special enrollment period to any individual (1) whose coverage under the plan ended because he reached a lifetime limit on the dollar value of all benefits, and (2) who becomes eligible (or is required to become eligible) for benefits not subject to a lifetime limit on the dollar value of all benefits under the plan or group health on the first day of the first plan year beginning on or after September 23, 2010 (January 1, 2011 for calendar year plans).
Similar to the enrollment period that must be provided to an adult child, a plan must provide written notice of this opportunity to enroll, which can be provided to either the dependent or the employee. The enrollment period must last at least 30 days and must begin no later than the first day of the first plan year beginning on or after September 23, 2010 (January 1, 2011 for calendar year plans).
A plan can use its annual open enrollment period to satisfy this requirement. If an individual enrolls during this special enrollment period, coverage must begin no later than the first day of the first plan year beginning on or after September 23, 2010 (again, January 1, 2011 for calendar year plans). If the plan chooses to use its annual open enrollment period to satisfy these requirements, the written notice is "prominent" in the materials. Any individual enrolling in the plan for this reason must be treated as a special enrollee and must be given the right to enroll in all of the benefit packages available to similarly situated individuals upon initial enrollment.
As you prepare your plan's open enrollment materials, please contact Tara Slone at (248) 457-7870 or your regular Hall Render attorney with any questions you may have.
