In April, the federal government released two sets of frequently asked questions to assist group health plan sponsors and insurers with the implementation of various health care reform provisions, including the Summary of Benefits and Coverage requirements, annual limit waivers and provider nondiscrimination requirements.
The most recent set of FAQs on the SBC requirements include guidance for plan years beginning on or after January 1, 2014, and before January 1, 2015, (referred to in the FAQs as the "second year of applicability"). In the FAQs, the federal agencies clarify that additional coverage examples are not required as part of the SBC for the second year of applicability. Therefore, for the second year of applicability, plan sponsors and insurers should continue to use the same two coverage examples required under previous SBC guidance - having a baby and managing Type 2 diabetes. The FAQs also retain the good faith compliance standard for the second year of applicability for plan sponsors and insurers who are working diligently and in good faith to comply with the SBC requirements under the ACA.
The federal government has also released an updated SBC template and an updated sample completed SBC. According to the government, the only change to the SBC template and sample completed SBC is the addition of statements regarding whether:
* The plan provides minimum essential coverage; and
* The plan's share of the total allowed costs of benefits provided under the plan meets the applicable minimum value requirements.
Notably, the agencies have not made any changes to the uniform glossary, and no changes have been made to the "Instructions for Completing the SBC" (for either group or individual health coverage), "Why This Matters" language for the SBC, or the coverage examples.
The FAQs also provide transitional relief to plan sponsors that have already begun preparing their SBCs for the second year of applicability. If a plan sponsor is unable to modify the SBC template for disclosures regarding minimum essential coverage and minimum value, the agencies won't take any enforcement action against such plan sponsors for using the template provided under previous SBC guidance. However, such plan sponsors are required to include a cover letter (or similar disclosure) with their SBCs stating whether the plan provides minimum essential coverage and the plan meets the minimum value requirements under the Patient Protection and Affordable Care Act. The FAQs provide model language for these disclosures.
Annual limit waivers
In a separate set of FAQs, the government has clarified that if a group health plan or insurer was granted a waiver from the annual limit requirements under PPACA, and such plan or insurer changes its plan or policy year prior to the expiration date of its annual limit waiver, such change does not modify the expiration date of the waiver. The agencies note that annual limit waivers (and waiver extensions) were approved by Health and Human Services for the plan or policy year in effect when the plan or insurer applied for the waiver (or waiver extension). Therefore, waiver recipients who change their plan year or policy year will not extend the expiration date of their waivers.
As an example, the agencies state that if a waiver approval letter states that a waiver is granted for an April 1, 2013, plan or policy year, the waiver will expire on March 31, 2014, regardless of whether the plan or insurer amends its plan or policy year. Of course, waiver recipients may terminate the waiver at any time prior to its approved expiration date.
The agencies also note that HHS has a record of each waiver's expiration date as HHS required information regarding the effective dates of coverage as part of the annual limit waiver application process.
Under the Affordable Care Act, group health plans and insurers are prohibited from discriminating against any health care provider who is acting within the scope of that provider's license or certification under applicable state law. This provision is applicable to nongrandfathered group health plans and insurers offering group or individual health insurance coverage for plan years and policy years beginning on or after January 1, 2014.
According to recent FAQs, because the provider nondiscrimination requirements under PPACA are "self-implementing," the government agencies will not be issuing regulations prior to the effective date. Until any further guidance is issued, group health plans and insurers offering group or individual coverage are expected to implement these requirements using a good faith, reasonable interpretation of the law. For this purpose, to the extent that an item or service is a covered benefit under the plan or coverage, and consistent with reasonable medical management techniques specified under the plan, plans and insurers may not discriminate based on a provider's license or certification, provided that such provider is acting within the scope of his or her license or certification under state law. Notably, this provision does not require plans and insurers to accept all types of providers into a network, nor does it govern provider reimbursement rates.
Contributing Editor Kate Bongiovanni is an associate in the tax section of Smith, Gambrell & Russell, LLP. She can be reached at firstname.lastname@example.org.
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