It may seem paradoxical that the U.S. Department of Labor (DOL) should begin auditing health plans for compliance with the health reform law’s mandates, given that the U.S. Supreme Court could very well strike down the Affordable Care Act (ACA) for being unconstitutional in early summer. But it’s better that plans be ready to demonstrate compliance with the coverage mandates that are presently hanging in the balance.
For the first time, health reform requirements are part of DOL audits, the law firm Proskauer Rose reports in an April 12 alert. “Unless and until the ACA is ruled unconstitutional by the Supreme Court, the Act is enforceable and will be enforced by the DOL,” the firm says.
- Grandfathered Plans. DOL is asking plans that claim grandfathered status to see: (1) the plan’s statement that it believes it is grandfathered within the meaning of Section 1251 of the ACA; and (2) records showing the plan as of March 23, 2010, with ancillary documents required to substantiate its status. See here for more details.(NOTE: A grandfathered health plan is defined as any health plan coverage that was in place on March 23, 2010. Grandfathered health plans are exempted from having to comply with some ACA mandates, including: (1) coverage of preventive services without cost-sharing; (2) new claims appeal and external review processes; (3) coverage for emergency services at in-network terms; (4) coverage of the law’s package of essential health benefits; and more.)
Grandfathered ERISA plans have to include a DOL/Employee Benefits Security Administration number to call in case of complaints.
- Non-grandfathered Plans. DOL wants to see that non-grandfathered plans meet the law’s coverage mandates. Here’s a sampling of what such plans are being asked to show: (1) documents relating to the preventative services for each plan year; (2) the plan’s internal claims and appeals procedures; (3) first and final notices of adverse benefit determinations; and (4) contracts or agreements with independent review organizations or third-party administrators providing external review.
- All Plans. These audit requests pertain to requirements that cannot be “grandfathered away.” They include requests for: (1) a sample of the notice describing enrollment opportunities for dependent children up to age 26; (2) a list of any participants who had coverage rescinded and the reason for such rescissions; and (3) documents relating to any new annual or lifetime limit on benefits.
“The law is still law and the administration is treating it that way,” Attorney Jim Napoli with Proskauer Rose tells the SmartHR Blog. Stopping implementation on the grounds that the court will throw out the entire act is both premature and exposes plans to liability, he added.
Napoli noted that government likely will take the position that if a plan violates the reform law while the mandates are still on the books, a violation still can be pursued even if the Supreme Court decision strikes down all or part of the law.