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Pre-Ex Limitation Notifications

Guest KM

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Upon enrollment, do newly hired employees need to be notified in writing SEPARATE FROM THE SUMMARY PLAN DESCRIPTION, that the plan has a pre-existing condition limitation which may be reduced by credible coverage under HIPAA?

Does having this information in the SPD suffice?

So far, I have gotten conflicting answers.

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We believe that there are some pre-enrollment disclosures. These disclosures should be included with the enrollment material. They should include:

* the terms of the plan's pre-ex condition limitaion;

* info on creditable coverage (incuding that you the new er will help get the cert of cred. cvg if necessary) and how the pre-ex exclusion period;

* special enrollment rules;

* plan requirements (if any) that the individual give the reason for declining if due to other group health plan coverage and the consequences of failing to state that reason.

If preenrollment disclure is not given to an employee, no preex condition exclusion or limitation may apply to the employee or his dependents.

Did this help or just make you run for cover?

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The PCE notice requirement appears in DOL regulations that are separate from the regulations on SPDs and that do not cross-reference the SPD regulations. Moreover, the IRS has informally indicated that the PCE notice is in addition to the SPD/SMM requirements. Some plans include the PCE notice in their initial COBRA notice (distributed when a participant first becomes covered). Others provide a notice along with other enrollment forms directing the participant to the relevant sections of the SPD regarding PCE provisions. However, in our view, a plan should not rely solely on the SPD itself to satisfy the PCE notice requirements.

Herewith the obligatory disclaimer: Nothing contained in this message should be construed as legal advice pertaining to any specific factual situation. If you need legal advice upon which you can rely, you must seek a written legal opinion from your attorney (which I, obviously, am not).


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