Health Care Reform – A Sensible and Practical Plan for Attack 2011
Employers, relax. Take a deep breath and clear your mind. Visualize serenity. Now, imagine yourself preparing for next year’s group health plan open enrollment. Stop. Take another deep breath and let yourself relax again. It’s not as bad as all the hype would have you believe.
Visualize yourself in a comfortable meeting room with some of your favorite coworkers from human resources, payroll, information systems, strategic planning, executive management, legal, etc. This is your Health Care Reform Task Force. But you can give your team a better name than that.
Your team’s goal is to understand and implement this new law. With the right planning, division of labor, and follow through, it may not be as bad as many fear.
About Your Group Health Plan Next Plan Year. We assume your group health plan existed on March 23, 2010. First, determine whether it is fully insured or self-funded. If it is fully insured, your insurer will be responsible for ensuring that the group policy complies with most Health Care Reform requirements. If your plan is self-funded, you will need to coordinate with your third-party administrator to make sure the plan complies with the requirements and with your stop-loss carrier to see how that coverage is affected.
For most of you, the earliest changes apply next year. There is just a handful of those changes. Make sure your group health plan (the plan document or policy) is revised to reflect that:
• dependent coverage continues for children up to age 26;
• life-time dollar limits on essential benefits are eliminated, only “restricted annual limits&rdquo on the dollar value of essential health benefits can be provided;
• pre-existing condition exclusions are eliminated for children under age 19;
• coverage may be rescinded only in the event of fraud; and
• no tax-free reimbursement is made for over-the-counter drugs.
Make sure those changes are reflected in the summary plan description or coverage certificate and in open enrollment materials.
About Other Things You Need to Do for Next Year. Designate a private place, other than a bathroom, where an employee who is a nursing mother can express milk. Just make a decision and announce it.
Also, make sure your payroll system is set up to capture and report (for W-2 purposes) the cost of your employer-provided group health coverage. This will be based on the COBRA premium amount.
About 2012 and Beyond. After you have taken care of plan changes and other requirements for next year, start thinking about how Health Care Reform’s other requirements (generally effective in later years) may affect your employer and group health plan.
These are things like automatically enrolling eligible employees in your group health plan, determining whether or to what extent pay-or-pay penalties may apply, determining whether your plan is subject to an excise tax for being a so-called “Cadillac” plan.
Stay informed but don’t hyperventilate over anything you read or hear. Watch for updates on Health Care Reform legislative changes, regulations, and clarifications. Give an attorney in our Employee Benefits practice group a call if you want to discuss anything.
If you don’t like something about Health Care Reform, make yourself heard by lobbying your favorite politician. When regulations are proposed, comment on them – your comments can make a difference! (Contact our Government Relations practice group.)
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