New Employer Requirements Related to Health Insurance and ACA

Revised model COBRA notices

Federal regulators recently released revised model COBRA notices. No changes were made to the COBRA process itself, but the notices were revised to better reflect the availability of Marketplace (Exchange) options available under the Affordable Care Act (ACA) to individuals losing coverage through an employer group, and the interaction of these options with COBRA coverage.

There are two model notices:

1. Continuation Coverage General Notice 
2. Election Notice 

These new model notices replace the previous version released in May 2013. Employers are not required to use the model notices—an employer may make up its own notice as long as it includes all elements required by regulation—but many do so as a simple way to stay in compliance with requirements.

The revised notices were released in conjunction with additional regulatory materials, including:

• Revised Department of Labor regulations concerning COBRA notices; and
• A bulletin from the Department of Health and Human Services clarifying the interaction between COBRA and Marketplace coverage.

For further information about COBRA, including links to the revised notices, see at the U.S. Department of Labor site, www.dol.gov/ebsa/cobra. The model notice links are under the “For Employers” section, 3rd & 4th bullets. Employers need to update their notices immediately.

Revised model CHIP notice

Federal regulators also have recently released a revised model CHIP notice. Under the Children’s Health Insurance Program Reauthorization Act (CHIPRA), employers in states with premium assistance programs are required to issue this notice to employees annually. Massachusetts is one of 38 states that have a premium assistance program, so employers in Massachusetts are required to issue the notice.

The new model notice replaces the original model CHIP notice, which was released in February 2010. Employers are not required to use the model notice—an employer may make up its own notice as long as it includes all elements required by regulation—but many do so as a simple way to stay in compliance with requirements. The notice may be distributed in conjunction with other materials, such open enrollment documents or Summary Plan Description documents.

The revised model notice is available at the U.S. Department of Labor site, www.dol.gov/ebsa.  It can be found under the ‘People are Asking…” section, 3rd bullet. Employers need to update their notices immediately.

Services for gender identity disorder

The Massachusetts Division of Insurance (DOI) recently issued a bulletin notifying insurers that they must provide coverage for services related to gender identity disorder, including gender reassignment surgery, when medically necessary.

There has been no mandate enacted requiring insurers to cover these services, but the DOI cited several existing sources of legal authority at the state and federal level that prohibit discrimination against transgendered individuals, most notably Chapter 199, a 2011 state law which added “gender identity” to several state anti-discrimination provisions.

While not referenced in the bulletin, the bulletin follows closely on the heels of a recent decision requiring Original Medicare to begin covering these services. Commercial insurers and employers are not required to follow Original Medicare’s coverage rules, but many use Original Medicare’s coverage rules as a primary source for developing their own coverage rules.

While the DOI only has oversight of insurance companies, most of the authorities cited in the DOI Bulletin are not state insurance requirements, but are of broader applicability. The decision concerning Original Medicare may also result in a change in the industry standard regarding coverage of these services. See the mass.gov Division of Insurance site for a copy of the DOI Bulletin.

If you have questions about any of the above issues, please contact Bonnie Donovan, Employee Benefits Associate at 508.787.5129 or bdonovan@dfmurphy.com.