Documents Released Providing Clarification on PPACA

The Patient Protection and Affordable Care Act (PPACA) is officially six months old and a number of regulations are now in effect for any new plan year. Federal agencies recently issued several documents clarifying certain PPACA requirements. The following summarizes information is that most notable for self-funded plans:

• Although not legally binding, the FAQ states that the Department is not taking a “punitive” approach in enforcing PPACA compliance. As long as plans make good-faith efforts to comply with requirements, DOL will attempt to help plans understand compliance requirements and not penalize them for violations.
• Guidance will be issued shortly on ways a group plan may retain grandfather status and change carriers.
• The definition of “child” for the purposes of adult dependent coverage has been clarified to mirror the IRS code 152(f)(1) definition, which includes a son, daughter, stepchild, adopted child or foster child. Plans may impose additional conditions on eligibility for health coverage of an individual not described in the IRS code, such as a grandchild or niece, for example, requiring that the individual be a dependent for income tax purposes.
• Regarding external appeals requirements for non-grandfathered plans, a third-party administrator (TPA) may hold contracts with independent review organizations (IROs), instead of the plan sponsor, in order to comply with the safe harbor procedure described in Technical Release 2010-01.
• The DOL issued Technical Release 2010-02 last week regarding internal claims and appeals requirements. It provides a grace period for certain new appeals procedure requirements to give plans more time to bring IT systems up-to-date, and has issued a revised model notice for adverse benefit determinations.
• HHS has issued a memorandum that describes changes made to HIPAA opt-out provisions for non-governmental self-funded plans as a result of PPACA.
• The IRS is asking for comments about the extension of non-discrimination rules to the fully-insured market. Notice 2010-63 also explains the difference in penalties between self-funded plans and fully-insured plans for violating non-discrimination rules. Comments will be accepted until November 4, 2010.

If you have questions about your plan’s compliance with these requirements or how to implement them or any other requirements, please contact your attorney.