Health Care Reform Template Language for Employers The health care reform law requires health insurance issuers and sponsors to provide certain notices to employees, either as a separate notice or as part of other benefits materials. To help employers comply with these requirements, we ve compiled this template language library. The library contains two types of language: Required language mandated by health care reform regulations Optional language you can use to explain key reform-related topics in a consumer-friendly way As we continue to receive additional guidance from the U.S. Department of Health and Human Services (HHS) and other regulatory agencies, we ll add any new model language you may need. Also keep in mind that the language in this document may be updated or changed as we receive additional guidance from these agencies. Contents Required language Grandfathered plan disclosure Annual limit waiver Dependent special enrollment right Lifetime limit special enrollment right Patient protections PCP selection and OB/GYN referral Patient protections emergency coverage Optional language Health care reform general description Meaning of grandfathered Health care reform 9/23/10 provisions No pre-ex waiting periods for children Spending account changes W-2 reporting Coverage options other than employer plan Exchanges Please be aware that required language must be included only if it s applicable to your particular plan. Also, you may need to customize the language for your plan. We have identified customizable or optional language with gray highlighted text. This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers. 1
Grandfathered plan disclosure Grandfathering allows groups to be exempt from some health care reform changes if they keep the plan they had on March 23, 2010. Those who get a new plan or make certain changes to their plan will lose grandfathered status. What is required: If a plan is grandfathered, this language must appear on plan materials that reference benefit information or cost-sharing (including those for pharmacy benefits, mental health benefits and flexible spending accounts). Examples include: annual benefit change summaries/descriptions (including information presented on a web page), certificates of coverage, FAQs, and open enrollment kits. When it s required: Required for plan years starting on or after September 23, 2010. Who provides it: For fully insured coverage, the health insurance issuer must provide the disclosure. For self-funded plans, the disclosure may be provided by either the plan sponsor or the designated third-party administrator. On behalf of our fully insured customers, added the required disclosure to applicable plan materials your employees receive from us. [Group health plan or health insurance issuer] believes this plan is a grandfathered health plan under the Patient Protection and Affordable Care Act (the Affordable Care Act). As permitted by the Affordable Care Act, a grandfathered health plan can preserve certain basic health coverage that was already in effect when that law was enacted. Being a grandfathered health plan means that this plan may not include certain consumer protections of the Affordable Care Act that apply to other plans, for example, the requirement for the provision of preventive health services without any cost sharing. However, grandfathered health plans must comply with certain other consumer protections in the Affordable Care Act, for example, the elimination of lifetime limits on benefits. Questions regarding which protections of the Affordable Care Act apply and which protections do not apply to a grandfathered health plan and what might cause a plan to change from grandfathered health plan status can be directed to [Group health plan or health insurance issuer] at the telephone number printed on the back of your member identification card, or contact your group benefits administrator if you do not have an identification card. For ERISA plans, you may also contact the Employee Benefits Security Administration, U.S. Department of Labor at 1-866-444-3272 or www.dol.gov/ebsa/healthreform. This Web site has a table summarizing which protections do and do not apply to grandfathered health plans. For nonfederal governmental plans, you may also contact the U.S. Department of Health and Human Services at www.healthcare.gov. HHS model language Annual limit waiver The health care reform law contains a provision that restricts the use of annual limits on the dollar value of essential health benefits. However, plans can apply for a waiver if compliance with the provision would result in a significant decrease in access to benefits or a significant increase in premiums. 2
What is required: Plans or issuers receiving approval for an annual limit waiver must provide notice to eligible participants and subscribers in any informational or educational materials, and in any plan or policy documents that serve as evidence of coverage and are sent to enrollees. The language shall be prominently displayed in clear, conspicuous 14 point bold type on the front of the materials to satisfy the notice requirement. When it s required: Eligible participants and subscribers with a plan or policy year before February 1, 2011, that have received or that will receive approval for a waiver from HHS must be provided the notice by their plan or issuer no later than February 20, 2011. For waivers covering plan or policy years that begin on or after February 1, 2011, the notice must be provided to eligible participants and subscribers as part of any informational or educational materials, and also in any plan or policy documents evidencing coverage that are sent to enrollees (e.g., summary plan descriptions). Who provides it: Customers who received a waiver are responsible for providing this notice. The Affordable Care Act prohibits health plans from applying dollar limits below a specific amount on coverage for certain benefits. This year, if a plan applies a dollar limit on the coverage it provides for certain benefits in a year, that limit must be at least [$750,000/$1.25 million/$2 million, as applicable]. Your health coverage, offered by [name of group health plan or health insurance issuer], does not meet the minimum standards required by the Affordable Care Act described above. Your coverage has an annual limit of: [dollar amount] on [all covered benefits] and/or [dollar amount(s)] on [which covered benefits notice should describe all annual limits that apply]. This means that your health coverage might not pay for all of the health care expenses you incur. For example, a stay in a hospital costs around $1,853 per day. At this cost, your insurance would only pay for [insert amount] days. Your health plan has requested that the U.S. Department of Health and Human Services waive the requirement to provide coverage for certain key benefits of at least [$750,000/ $1.25 million/ $2 million, as applicable] this year. Your health plan has stated that meeting this minimum dollar limit this year would result in a significant increase in your premiums or a significant decrease in your access to benefits. Based on this representation, the U.S. Department of Health and Human Services has waived the requirement for your plan until [the ending date of the plan or policy year beginning before January 1, 2014]. If you are concerned about your plan s lower dollar limits on key benefits, you and your family may have other options for health care coverage. For more information, go to: www.healthcare.gov. If you have any questions or concerns about this notice, contact [provide contact information for plan administrator or health insurance issuer]. For plans offered in States with a Consumer Assistance Program, insert: In addition, you can contact [contact information for consumer assistance program]. 3
HHS model language updated to reflect new guidance issued June 17, 2011 Dependent special enrollment right The health care reform law allows dependents to be covered on their parents plan until their 26th birthday even if they re out of school, have a job or are married. (In some states, state law extends dependent coverage beyond the 26th birthday.) As part of this provision, subscribers must be notified about how and when they can enroll a dependent who s younger than 26. What is required: The dependent coverage to age 26 provision requires the plan issuer or sponsor to provide written notice about the opportunity to enroll dependents in the plan. The notice may be provided separately or included on other enrollment materials. When it s required: The enrollment opportunity and the notice must occur on or before the first renewal after September 23, 2010. Who provides it: For fully insured coverage, the health insurance issuer provides this notice. For selffunded plans, the disclosure may be provided by either the plan sponsor or the designated third-party administrator. On behalf of our fully insured customers, issued a letter to active subscribers in late August 2010 notifying them of dependent special enrollment rights. If you want to add dependents to your health plan younger than 26 years of age, you have a one-time special enrollment right under the law. This enrollment right applies to adult children under 26 who were denied coverage in the past because they exceeded the maximum dependent age, or who were enrolled and lost coverage because they reached the maximum dependent age under the policy. The special enrollment period will take place no later than the first 30 days of your plan year. Contact your employer s benefits administrator for the exact dates of this special enrollment period. If you currently have single or employee/spouse coverage and you want to add children, you need to change your enrollment status to one that allows dependents to be added to your contract, such as family or employee/children coverage. If you are not currently enrolled, but wish to do so to take advantage of the dependent coverage right, you and your adult child may both enroll during the special enrollment period if you meet eligibility requirements. If you want your children to stay on your plan, you do not need to do anything. If you do not want to keep your children on your plan until age 26, you will need to contact your employer s benefits administrator to remove them as dependents under your policy. (based on HHS model language) 4
Lifetime limit special enrollment right A provision of the health care reform bill prohibits lifetime dollar limits on the value of essential health benefits. Plans must provide notice that lifetime limits no longer apply and that individuals who may have previously reached their lifetime maximum have an opportunity to re-enroll in benefits. What is required: The lifetime limit provision requires the plan issuer or sponsor to provide written notice that lifetime limits no longer apply and that an individual who previously reached a lifetime limit is eligible to re-enroll. The notice may be provided separately or included on other enrollment materials. When it s required: The enrollment opportunity and the notice must occur on or before the first renewal after September 23, 2010. Who provides it: For fully insured coverage, the health insurance issuer provides this notice. For selffunded plans, the disclosure may be provided by either the plan sponsor or the designated third-party administrator. On behalf of our fully insured customers, issued a letter to active subscribers in late August 2010 notifying them of lifetime limit special enrollment rights. The health care reform law requires health insurance companies to remove lifetime dollar limits on benefits from all plans. This applies to medical and pharmacy benefits only; not dental or vision. If your coverage was previously canceled because you reached the lifetime dollar limit under your plan, you have a one-time special enrollment right under the law. You can enroll again and be covered without any lifetime dollar limit on benefits. The special enrollment period will take place no later than the first 30 days of your plan year. Contact your employer s benefits administrator for the exact dates of the special enrollment period. If you are covered by your employer s health plan now, you do not need to do anything. If you are not covered by your employer s health plan now and are not eligible to enroll during the special enrollment period, contact your employer s benefits administrator for more information on when you can enroll. (based on HHS model language) Patient protections PCP selection and OB/GYN referrals Patient protection provisions in the health care reform bill give consumers more flexibility in choosing a primary care doctor, accessing OB-GYN services, and getting emergency care. What is required: The patient protections provision requires plan issuers or sponsors to notify participants of their new rights under health care reform. These benefits changes and the related notice are required only for nongrandfathered plans that have a gatekeeper structure. The notice may be provided separately or included on other benefits materials. When it s required: Required for the plan year that starts on or after September 23, 2010. 5
Who provides it: For fully insured coverage, the health insurance issuer provides this notice. For selffunded plans, the disclosure may be provided by either the plan sponsor or the designated third-party administrator. On behalf of our fully insured customers, added the required disclosure to applicable plan materials your employees receive from us. We are not providing the notice for self-funded customers unless we receive a request to do so. Your plan requires you to select a primary care provider (PCP) for each person the plan covers. You have the right to choose any primary care provider for this role, as long as the provider is in our network and will accept you or your family members. If your plan covers children, you may choose a pediatrician as their primary care provider. If the plan or health insurance coverage designates a primary care provider automatically, insert: Until you choose a provider, [name of group health plan or health insurance issuer] designates one for you. If you want information about how to select a primary care provider, or if you d like help finding a PCP in your plan s network, call [plan administrator or issuer] at [insert contact information]. Your plan requires you to get a referral from your primary care provider before you see a specialist. In addition, you may need to get approval from the plan before you get certain services. However, you don t need prior approval from the plan or a referral from your primary care provider to get obstetrical or gynecological care from an in-network OB-GYN. For help finding an OB-GYN in your plan s network, call [plan administrator or issuer] at [insert contact information]. (based on HHS model language) Patient protections emergency coverage Patient protection provisions in the health care reform bill give consumers more flexibility in choosing a primary care doctor, accessing OB-GYN services, and getting emergency care. What is required: The patient protections provision requires plan issuers or sponsors to notify participants of their new rights under health care reform. These benefits changes and the related notice are required only for non-grandfathered plans. When it s required: Required for the plan year that starts on or after September 23, 2010. Who provides it: For fully insured coverage, the health insurance issuer provides this notice. For selffunded plans, the disclosure may be provided by either the plan sponsor or the designated third-party administrator. On behalf of our fully insured customers, added the required disclosure to applicable plan materials your employees receive from us. If you have a health emergency, you can go to any emergency room. You don t need to get approval from the plan first even if the emergency room isn t in your plan s network. However, we do require you or your doctor to notify us of your visit after you go to the emergency room. 6
Your plan covers both in-network and out-of-network emergency room services. Your out-of-pocket costs are the same, but you may pay more for out-of-network care in other ways. For example, an out-of-network provider is allowed to bill you for some things that in-network providers can t bill you for. (based on HHS model language) Health care reform general description This language explains the parts of the health care reform bill and the gradual timeline for provisions to take effect. Health care reform is based on two bills: The Patient Protection and Affordable Care Act (PPACA) signed into law on March 23, 2010, and the Health Care and Education Reconciliation Act (HCERA) signed into law on March 30, 2010. Together, these two bills (along with their amendments) make up what most people now refer to as the health care reform law. Within this law, there are many separate provisions that must be implemented by various key dates from 2010 to 2018. Meaning of grandfathered This language describes what a grandfathered plan is in a consumer-friendly manner. The word grandfathered describes a health plan that was in effect on March 23, 2010, and hasn t had certain changes since then. The health care reform law has special rules for grandfathered plans. For example, they re not required to make some of the changes mandated in the law. In general, buying a new plan or making a change that reduces your benefits for example, raising your deductible or lowering the percentage your plan pays would cause a loss of grandfathered status. 7
Health care reform 9/23/10 provisions This language briefly describes some plan changes the health care reform law requires for all group health plans (grandfathered and nongrandfathered) at the first renewal on or after September 23, 2010. This year s plan includes changes to ensure compliance with the requirements of the federal health care reform law. Some of the changes include no lifetime maximums, elimination of certain annual limits and the expansion of the definition of dependents. No pre-ex waiting periods for children This language explains what pre-existing condition waiting periods are and clarifies that health care reform doesn t allow them for children under the age of 19. This language can be edited down to the first sentence if space is limited. Plans cannot apply pre-existing condition exclusions, including waiting periods, for children under the age of 19. A pre-existing condition is a condition, disability or illness (either physical or mental) that you had before you enrolled in a health plan. A waiting period means certain benefits aren t available right away. Spending account changes This language explains health care reform changes to spending accounts. Here s an overview of health care reform changes for flexible spending accounts (FSAs), health reimbursement arrangements (HRA) and health savings accounts (HSAs): For FSAs, HRAs and HSAs Starting January 1, 2011, you can use your spending account for an over-thecounter (OTC) drug only if you have a prescription. You won t need a prescription to use your account for insulin or for OTC items that aren t drugs (such as bandages). 8
If you have an HSA Starting January 1, 2011, the penalty for using HSA funds for unapproved expenses went up from 10% to 20%. Plus, the money you spent on unapproved items will be taxed. The rules are different for people 65 and older. If you have an FSA Starting January 1, 2013, you ll be able to contribute up to $2,500 a year for medical expenses. In the past, the federal government didn t set a limit. The limit will be adjusted for the cost of living every year. W-2 reporting This language explains that the cost of employer-provided benefits will appear on W-2s, but employees will not be taxed on the amount. The health care reform law requires employers to report the cost of employer-sponsored group health coverage. You ll start seeing this on the W-2 form you receive at the beginning of 2013 or 2014. But this is a reporting requirement only. It won t have an impact on your taxable income. Coverage options other than employer plan This language outlines how health care reform affects coverage options for people who aren t eligible for employer coverage or Medicare, both now and after 2014. Use this language carefully; while it s helpful information for employees whose coverage is ending, broader use could give the impression that you re discontinuing employerprovided coverage. What are your options if you don t have access to coverage at work? From now until the end of 2013, if you re under the age of 65 you ll have these options: COBRA or state continuation coverage These arrangements allow you to stay on the same plan you had with your employer. But you pay the entire premium, so your monthly payment will increase. Individual coverage You and other individuals like you are grouped together to help share the risk, much like a group health plan. Usually, you have to qualify for individual plans by meeting certain enrollment guidelines and/or health criteria. 9
High risk pool States must offer high risk pools for people who aren t able to get health coverage because of pre-existing conditions. Medicaid Medicaid provides health coverage for low-income people. Starting in 2014, some of these options will change. The high-risk pools will go away. Individual coverage will be guaranteed-issue (meaning you can t be turned down just because of your health) and will be sold through insurance exchanges. Also, more people will be eligible for Medicaid. Exchanges This language briefly explains the role of health insurance exchanges, which will be available in 2014. This is not the HHS-mandated exchange notification. We will add the HHS model language to this document once it s available. Beginning in 2014, state-run programs called health insurance exchanges will allow individuals and qualified small employers to comparison-shop for health insurance online. Plans in the exchange will have standard levels of benefits for example, a gold plan will have certain features and a silver plan will have certain features. Subsidies will be available to low-income people and small businesses that buy insurance through an exchange. The National Accounts business unit serves members of: Blue Cross Life and Health Insurance Company and Blue Cross of California using the trade name Blue Cross in California; using the trade name of Blue Cross and Blue Shield for the following companies in: Colorado Rocky Mountain Hospital and Medical Service, Inc. HMO products underwritten by HMO Colorado, Inc. Connecticut: Health Plans, Inc.; Georgia: Blue Cross and Blue Shield of Georgia, Inc. and Blue Cross Blue Shield Healthcare Plan of Georgia, Inc.; Indiana: Insurance Companies, Inc.; Kentucky: Health Plans of Kentucky, Inc.; Maine: Health Plans of Maine, Inc.; Missouri (excluding 30 counties in the Kansas City area): RightCHOICE Managed Care, Inc. (RIT), Healthy Alliance Life Insurance Company (HALIC), and HMO Missouri, Inc. RIT and certain affiliates administer non-hmo benefits underwritten by HALIC and HMO benefits underwritten by HMO Missouri, Inc. RIT and certain affiliates only provide administrative services for self-funded plans and do not underwrite benefits; Nevada: Rocky Mountain Hospital and Medical Service, Inc. HMO products underwritten by HMO Colorado, Inc., dba HMO Nevada.; New Hampshire: Health Plans of New Hampshire, Inc.; Ohio: Community Insurance Company; Virginia: Health Plans of Virginia, Inc. trades as Blue Cross and Blue Shield in Virginia, and its service area is all of Virginia except for the City of Fairfax, the Town of Vienna, and the area east of State Route 123.; Wisconsin: Blue Cross Blue Shield of Wisconsin (BCBSWi), which underwrites or administers the PPO and indemnity policies; Compcare Health Services Insurance Corporation (Compcare), which underwrites or administers the HMO policies; and Compcare and BCBSWi collectively, which underwrite or administer the POS policies. In 28 eastern and southeastern counties in New York, Empire Blue Cross Blue Shield, the trade name of Empire HealthChoice Assurance, Inc., underwrites and/or administers the PPO, EPO, POS and 10
indemnity policies. Independent licensees of the Blue Cross and Blue Shield Association. ANTHEM is a registered trademark of Insurance Companies Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. 11