Smart Benefits: Health Plan Audits—Is Your Company Ready?
Monday, August 13, 2012
The DOL has responsibility for the administration and enforcement of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), which establishes standards governing the operation of employee benefit plans. Specifically, DOL examines plans for compliance with the laws contained in Part 7 of ERISA, including the Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act (Healthcare Reform).
As part of this year’s audits, DOL wants to determine whether plans who are claiming grandfathered or non-grandfathered status are meeting healthcare reform’s coverage mandates.
Specifically, grandfathered plans need to show:
A plan statement that shows the employer believes it is grandfathered within the meaning of Section 1251 of the Affordable Care Act
Records showing the plan status as of March 23, 2010, along with ancillary documents to support the status
Documents supporting any new annual or lifetime limits on benefits
That’s because grandfathered plans are exempt from some healthcare reform mandates like coverage of preventive care services without cost-sharing, new claims appeal and external review processes, coverage for emergency services at in-network levels, and coverage of essential benefits, among other exclusions.
Plan Documentation for All Plans
DOL will also be looking to ensure non-grandfathered plans are meeting documentation requirements under healthcare reform. Specifically, non-grandfathered plans need to show:
Documents relating to preventive services for each plan year
The plan’s internal claims and appeals procedures
First and final notices of adverse benefit determinations
Contracts or agreements with independent review organizations or third-party administrators providing external review
And all plans are required to provide:
Samples of the notice describing enrollment opportunities for dependent children up to age 26
A list of participants who had coverage rescinded and the reasons for it
The DOL has a very clear and comprehensive set of expectations employers must follow in terms of appropriate documentation and key employee notifications – much of which is mandated by the new healthcare reform laws.
Even if you won’t be subject to an audit, it pays to be prepared. As a best practice, employers should review a checklist of required participant disclosures that satisfy general requirements for health plans, as well as specific ones relative to healthcare reform.
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