Audits are an integral part of the Department of Labor (DOL)’s enforcement efforts. Recently, DOL audits have started to include compliance with the Patient Protection and Affordable Care Act (Pub. L. No. 111-148) and the Health Care and Education Affordability Reconciliation Act, collectively referred to as the "ACA" or "Health Care Reform."

Given the DOL’s focus on ACA compliance, it is a best practice for employers to review their health plans for adherence to the law. To assist employers, the DOL has created a self-audit checklist on the ACA. You can view the DOL’s checklist here.

The following are some of the major provisions covered in the checklist along with tips for documenting compliance:

Grandfathered Status:

If a health plan is considered “grandfathered,” it is exempt from certain requirements of the ACA. To be considered grandfathered, the plan must have existed on the date of the law's enactment (March 23, 2010) and maintained the plan with no “significant” changes.

Self-Audit Check: If your group health plan is claiming grandfathered status, any plan materials provided to participants and beneficiaries must include a statement that: (1) the plan believes it is a grandfathered health plan; and (2) provides contact information for questions and complaints. It is important to retain a copy of this statement in your records.

A group health plan claiming grandfathered status must also retain records documenting the terms of the plan in effect on March 23, 2010 and any other documents necessary to verify, explain, or clarify its status as a grandfathered health plan. These records must be maintained for as long as the plan takes the position that it is grandfathered.

Dependent Coverage:

The ACA requires employer-sponsored health plans that offer dependent coverage to permit children to stay on their parents' health plan until they reach the age of 26. This requirement became effective for plan years beginning on or after September 23, 2010. There is a limited exception that permits grandfathered group plans to exclude adult children from dependent coverage if they are eligible to enroll in an employer-sponsored health plan other than their parents' plan.

Self-Audit Check: Health plans that offer dependent coverage were required to provide a one-time notice and enrollment opportunity to children who became newly eligible to enroll as a result of the ACA’s requirement to provide coverage until age 26. Employers should retain documentation of the notice and the enrollment period.

Rescission:

The ACA prohibits health plans from rescinding coverage retroactively except in cases of fraud or intentional misrepresentation, as prohibited by the terms of the plan. This rule became effective for plan years beginning on or after September 23, 2010. Where rescission is permitted, employers must provide affected individuals with at least 30 days advance notice.

Self-Audit Check: Health plans that have rescinded coverage should retain, for each case, documentation showing the reason coverage was rescinded as well as any written notice provided to affected individuals.

Lifetime and Annual Limits:

Under the ACA, health plans are prohibited from imposing lifetime limits on “essential benefits” an individual may receive. This prohibition became effective for plan years beginning on or after September 23, 2010. The law also phases out the use of annual limits on essential benefits. In 2014, the use of annual dollar limits will be banned for all group health plans.

Self-Audit Check: Employers were required to provide a one-time notice to individuals for whom a lifetime limit no longer applied as a result of the change. If an individual was not enrolled in the plan at the time, the health plan was required to provide the notice and an opportunity to enroll. Employers should retain copies of these notices as well as documentation of the enrollment opportunity.

Summary of Benefits and Coverage:

The ACA requires group health plans to provide two new notices to plan participants and beneficiaries: the summary of benefits and coverage (or "SBC") and uniform glossary of medical and coverage terms (or "glossary"). These notices must be furnished during open enrollment, when individuals otherwise become eligible to enroll, and within seven business days of a request. These notice requirements became effective for open enrollment periods beginning on or after September 23, 2012.

Self-Audit Check: All group health plans must provide the notices. Employers should ensure the notices are provided within the required timeframe and retain copies of the notices provided to participants and beneficiaries.

Additional Requirements:

Other areas of the self-audit address ACA requirements related to:

• Recommended preventative services and immunizations with no cost sharing;
• Permitting enrollees to choose any available participating primary care provider as their doctor and to choose any available participating pediatrician as their child’s primary care doctor;
• Permitting women to see OB-GYNs without a referral; and
• Rules concerning emergency services.
  

It is important for non-grandfathered health plans to retain records demonstrating compliance with the above provisions.

Compliance Recommendations:

Health Care Reform requirements are extensive and regulations implementing its various provisions continue to be released. Employers should work closely with their insurer to confirm that their health plans meet ACA requirements. Check HR411 and the Eye on Washington section of ADP.com for continued updates concerning Health Care Reform. Additionally, Healthcare.gov provides information for both employers and individuals.