More Health Care Reform Clarifications: Non-Discrimination and Preventative Services

As we enter 2011, I continue to examine the PPACA, or health care reform law, to gain a better understanding of its provisions so that I can continue to communicate them accurately to clients and readers of this blog alike.  So here are a couple of things I’d like to point out.

First, the IRS, Department of Labor and Department of Health and Human Services have issued a notice delaying the enforcement of group health plan non-discrimination rules, which were to go into effect on January 1, 2011.  So what does this mean?  Under the law, certain current or former executives/owners that aren’t offered to non-executives would be prohibited.  Some of these benefits might include:

  •  A company gives a manager a severance agreement that will pay for all or a portion of his COBRA premiums for a full 12 months if his employment is involuntarily terminated — and all other former workers are required to pay the full COBRA premiums themselves
  • New salaried employees are eligible for healthcare benefits immediately, but hourly workers are not eligible until 90 days after their start date
  • A company offers a low deductible plan option to officers, but only offers rank and file employees a high-deductible plan

The agencies are now saying that companies will not have to comply with the non-discrimination rules until the agenices have issued further guidance regarding this portion of the law.  They did not indicate when that might be, however the agencies did indicate that when guidance is issued the effective date for compliance will be delayed to give plan sponsors time to implement the changes that will be required. 

Perhaps of more importance to the public in general is a clarification on the preventative services portion of the law.  The law states that non-grandfathered plans will have to cover certain preventative services without any cost-sharing for the patient.  This means that physicals, well-baby exams and most immunizations will be covered without the patient having to pay a deductible, co-payment or co-insurance of any kind.  There is also a list of recommended preventative services that will be covered at 100% as well.  One of the new services covered at 100% will be colonoscopies.  HOWEVER, the recommendation is that screening should be done in adults age 50 through age 75.  So if you are under the age of 50, you’re health insurance may still require cost sharing on this procedure.  And let me tell you, the procedure is not inexpensive.  So be sure you check with your health care provider and your insurance company so that you fully understand what preventative services will be covered at 100%.

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