More Clarification on Grandfathered Health Plans

• Required Disclosure of Grandfathered Plan Status. In order for a group health plan or insurance coverage to maintain its grandfathered status the interim regulations require the plan or coverage to include a statement - in any materials it distributes to participants or beneficiaries describing the benefits provided - that the plan or coverage is grandfathered. Does this mean that the statement must be included in an Explanation of Benefits and every other time a communication is sent?
  • No. The FAQs explain that the disclosure should be provided whenever a summary of benefits is provided - e.g., a summary plan description. The disclosure is not required in each communication from the plan to a participant or beneficiary (such as an EOB). However, plan sponsors and issuers are encouraged to identify communications where it would be appropriate to disclose grandfathered status so participants and beneficiaries can understand and make informed choices about their health coverage. FAQ-1

• Separate Treatment or Therapy Plan. Effective for plan years beginning on or after September 23, 2010, plans are prohibited from imposing overall lifetime limits on the dollar value of benefits, although a plan is permitted to impose lifetime dollar limits on specific covered benefits if they are not "essential health benefits." Until the Departments issue guidance on what constitutes "essential health benefits," good faith efforts at compliance are required. What about a separate employer plan that reimburses expenses for "special treatment and therapy" for eligible employees' children with physical, mental or developmental disabilities (such as reimbursement for special education learning facilities, or day or residential special care facilities) which are not covered by the employer's primary medical plans? Can the plan continue to impose a lifetime dollar limit on those benefits?
  • Yes. Until final regulations are issued defining "essential health benefits," the Departments will consider it to be a reasonable good faith interpretation of the law to not impose the ban on lifetime limits to the benefits provided under such a plan. FAQ-3.

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