Looking at the new health-care law.

• Author: Berger, Barrie Tabin
• Position: Federal Focus - Department of Health and Human Services - Law overview

The new federal health-care reform, the Patient Protection and Affordable Care Act (Public Law No. 111-148) and the Health Care and Education Reconciliation Act (Public Law No. 111-152), contains many provisions that are of interest to states and localities that are both plan sponsors and providers of health care.

GOVERNMENTAL PLAN SPONSORS

Employer Notice of Coverage Requirements. By March 2012, plan administrators, sponsors, and insurers must provide a summary plan description of benefits and coverage under the group health plan to participants, prior to enrollment. The secretary of the Department of Health and Human Services (HHS) is required to publish guidance for developing this summary.

Automatic Enrollment. Beginning in 2014, employers with 200 or more full-time employees will be required to automatically enroll employees in their employer-provided health plans.

Coverage Reforms. Group health plans that provide coverage for dependent children will be required to continue making that coverage available until the children reach the age of 26 (effective for plan years beginning on or after September 23, 2010; applies to both newly created and existing health plans). The Department of Treasury, Labor, and HHS issued an interim final rule implementing this provision, available at http://www.federalregister.gov/ OFRUpload/OFRData/2010-11391_PI.pdf. The interim final rule defines who is covered by this new requirement, and it provides for a transition role for adult children who become eligible for coverage. In addition, the Internal Revenue Service (IRS) released a new notice (Notice 2010-38) on the law's tax treatment of group health plan coverage for adult children. The IRS guidance can be found at http://www.irs.gov/pub/irs-drop/n-10-38.pdf. Additional highlights are listed below. Unless otherwise stated, all of the following provisions are effective for plan years beginning on or after September 23, 2010, and all apply to both newly created and existing health plans.

* Group health plans will be prohibited from imposing lifetime and annual limits on the value of essential benefits such as hospitalization and prescription drugs.

* Preexisting condition exclusions cannot be imposed on children under age 19.

* Group health plans cannot rescind health-care coverage, except in the case of fraud or intentional misrepresentation.

* Group health plans must provide preventative care and immunizations without any cost-sharing requirements, as well as annual out-of-pocket maximums in the amount of $5,950 for an individual and $11,900 for a family.

* Group health plans will be required to end all pre-existing condition...