Employer Compliance Audits Increasing
The DOL/HHS recently began auditing employers and other covered entities for compliance with the HIPAA Privacy and Security Rules and Breach Notification standards and for compliance with the Affordable Care Act (ACA).
The DOL audits will also focus on Grandfathered Plans. It is asking to see the plan's statement that it believes it is grandfathered within the meaning of Section 1251 of the ACA and records showing the plan as of March 23, 2010, with ancillary documents required to substantiate its status. Grandfathered ERISA plans have to include a DOL/Employee Benefits Security Administration phone number to call in case of complaints.
The DOL also wants to see that non-grandfathered plans meet the law's coverage mandates, e.g., documents relating to the preventive services for each plan year, the plan's internal claims and appeals procedures, first and final notices of adverse benefit determinations, and contracts or agreements with independent review organizations or third-party administrators providing external review.
Lastly, the DOL is auditing plans that cannot be grandfathered. It is requesting a sample notice describing enrollment opportunities for dependent children up to age 26, a list of any participants who had coverage rescinded and the reason for such rescissions, and documents relating to any new annual or lifetime limit on benefits.
Unless and until the U.S. Supreme Court strikes down the ACA, it will be enforced, and employers should be prepared to demonstrate compliance with coverage mandates that are presently the law.
Feds Investigate Self-funded Health Plans and Stop-loss
The government is concerned that small employers might self-insure their health plans to avoid certain requirements under the Affordable Care Act. By purchasing stop-loss insurance policies with relatively low Specific and Aggregate attachment points, employers may be able to create a self-insured plan that closely approximates a fully insured plan, thus circumventing the ACA's mandates. The government is also concerned that "this practice, if widespread, would worsen the risk pool and increase premiums in the fully insured small group market, including in the Small Business Health Options Program (SHOP) Exchanges that begin in 2014." Read More
Last month, we asked "Which Section of the Internal Revenue Code was enacted to provide for more expansive nondiscrimination rules for health care and other employer-provided fringe benefits, but was soon repealed because it was excessively complex and generally unworkable?" The answer is Section 89. 1st place goes to Mary Anderson of Exton, PA and 2nd place to Rebecca Boyd of Bellevue, WA.