Legal Alerts

Health Care Reform: Grandfathered Health Plan and Adult Child Coverage Notices

12.01.10

Employers preparing for open enrollment and the beginning of a new plan year should remember to provide grandfathered health plan notices and adult child coverage notices as required under health care reform.

Grandfathered Health Plan Notice

In order to maintain status as a grandfathered health plan, any plan materials provided to a participant or beneficiary must include a statement that the plan believes it is a grandfathered health plan and must provide contact information for questions and complaints.

The Department of Labor has provided the following model language that can be used to satisfy this disclosure requirement:

This [group health plan or health insurance issuer] believes this [plan or coverage] is a “grandfathered health plan” under the Patient Protection and Affordable Care Act (the Affordable Care Act).  As permitted by the Affordable Care Act, a grandfathered health plan can preserve certain basic health coverage that was already in effect when that law was enacted.  Being a grandfathered health plan means that your [plan or policy] may not include certain consumer protections of the Affordable Care Act that apply to other plans, for example, the requirement for the provision of preventive health services without any cost sharing.  However, grandfathered health plans must comply with certain other consumer protections in the Affordable Care Act, for example, the elimination of lifetime limits on benefits. 

Questions regarding which protections apply and which protections do not apply to a grandfathered health plan and what might cause a plan to change from grandfathered health plan status can be directed to the plan administrator at [insert contact information].  [For ERISA plans, insert: You may also contact the Employee Benefits Security Administration, U.S. Department of Labor at 1-866-444-3272 or www.dol.gov/ebsa/healthreform. This website has a table summarizing which protections do and do not apply to grandfathered health plans.]

Health care reform, which extended dependent coverage to age 26, provides transitional relief for a child whose coverage ended, or who was denied coverage under a group health plan because, under the terms of the plan the availability of dependent coverage of children ended before the attainment of age 26. Health care reform requires that a plan give a child a written notice about the opportunity to enroll that continues for at least 30 days. This notice must be provided not later than the first day of the first plan year beginning on or after September 23, 2010. The notice may be provided to an employee on behalf of the employee’s child and may be included with other enrollment materials, provided the statement is prominent.Adult Child Coverage Notice

The Department of Labor has provided the following model language that can be used to satisfy this disclosure requirement:

Individuals whose coverage ended, or who were denied coverage (or were not eligible for coverage), because the availability of dependent coverage of children ended before attainment of age 26 are eligible to enroll in [Insert name of group health plan or health insurance coverage].  Individuals may request enrollment for such children for 30 days from the date of notice.  Enrollment will be effective retroactively to [insert date that is the first day of the first plan year beginning on or after September 23, 2010.]  For more information contact the [insert plan administrator or issuer] at [insert contact information]. 

If you have questions or need additional information about these or other employee benefit matters, contact one of our attorneys or visit our Employment Law Resource Center.

This Legal Alert is a periodic publication of Lindquist & Vennum LLP and is intended to provide basic information about new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances.The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

Contact
LaFromboise, Antoine J.
Communications and Brand Manager
T 612.371.3269

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