Eye On Washington: Health Care Reform
Updated: May 13, 2010
Last Week in Washington
Administration officials continue the monumental task of translating the health reform law into regulations and beginning the implementation process. The various agencies tasked with rule-making have released two sets of interim final regulations in the past week as detailed below.
Sebelius Sends Update to Congress on Health Reform Implementation
On May 11, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius sent a letter to Congressional leaders outlining the Administration’s progress towards implementing the new health reform legislation.
Regulations on Dependent Coverage of Children to Age 26
On May 10, the Department of Labor (DOL), Treasury, and HHS jointly issued interim final rules implementing the provisions of the Patient Protection and Affordable Care Act (PPACA) that extend dependent coverage under group health plans and individual policies to any adult child who has not attained age 26. These new requirements for coverage will go into place for plan years beginning on or after September 23, 2010, and do not take into account any factor other than age. The coverage will be available to the adult son or daughter but not to children or spouses of those adult children. The rule also states that until January 1, 2014, grandfathered health plans may exclude an adult child under age 26, if that child is eligible to enroll in an employer-sponsored health plan other than the parent’s health plan; regulations for grandfathered health plans are expected in the near future. The rule details transitional relief for instances in which a child under age 26 lost coverage due to age, or who was never offered coverage because of age under the terms of the plan or coverage. The transitional relief requires that a plan or coverage provide such a child written notice of enrollment opportunity and an enrollment period of at least 30 days; this enrollment period is to begin no later than the first day of the first plan year beginning on or after September 23, 2010.
The rule is to be published in the Federal Register on May 13, 2010, and will become effective July 12, 2010. Comments are due by August 11, 2010.
An official fact sheet and list of frequently asked questions has also been released.
Regulations on Early Retiree Reinsurance Program
On May 5, HHS released detailed interim final regulations pertaining to the Early Retiree Reinsurance Program (ERRP) established by the Patient Protection and Affordable Care Act. Key concepts include confirmation that the program is available to self-insured and fully-insured plans, all plan sponsors, and is expected to be up and running by June 1. In an interesting wrinkle, CMS does not anticipate annual applications, but only one application for the entirety of the program. The first plan year under consideration will be the plan year ending after June 1, 2010. Full plan year mathematics will be applied, but only claims incurred after June 1 will be contemplated for compensation. The program will reimburse 80% of certain claims between $15,000 and $90,000 for individuals in employer-sponsored early retirement health plans and their spouses, surviving spouses and dependents, provided that these individuals are between age 55 and 64 and not eligible for Medicare. These reimbursements will be made from a fund limited to $5 billion.
The rule was published in the Federal Register on May 5, 2010, and will become effective June 1, 2010. Comments are due by June 4, 2010.
In Case You Missed It:
List of Insurers on the Administration’s health reform site providing coverage for college graduates under age 26 in advance of the required date of September 23.
ADP is committed to obtaining the most current information on health care reform to help ensure that our Benefits, HR and Payroll outsourcing solutions remain compliant with the changing laws while you focus on your business. This content is subject to change. We will continue to provide updates on this page through our partner, AON Consulting, as the situation continues to evolve.