Tuesday, February 09, 2010 09:11
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Not to worry, this will not be another one of those angst-ridden, hand wringing articles about what woulda, coulda or shoulda happened to achieve health care reform. (In fact, you may be perfectly happy and content to watch Congress continue its battle to legislate change to our health care system.) Moreover, I do not intend to prognosticate as to the outcome or even the focus of health care reform – should it be the insurance companies, efficiency in provider service delivery, cost reduction throughout the system, etc.? No, actually I am here to tell you a secret- just in the past 2 years alone (and there’s more on the way), health care reform has been impacting, and will continue to impact, the operation and administration of employer-sponsored health care programs.
“What,” you ask, “is he talking about?” Allow me to provide you with a brief compendium of the alphabet soup of acronym-laden health care legislation (some health care practitioners call it “reform”) that has been enacted since 2008 and how it affects your organizations’ health care plan(s).
Who’s GINA?
The Genetic Information Non-discrimination Act of 2008 (GINA’s full name) was enacted in May of 2008, and was designed to protect the American people from improper use of genetic information. Title I of GINA applies to employer, union and even government sponsored group health plans and amended several statutes, including Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the Internal Revenue Code of 1986 (“IRC”), with the goal of prohibiting discrimination in health coverage based on genetic information. Title II prohibits employers from using genetic information in most aspects of the employment process, from hiring (or failing to hire), discharging, or relating to the compensation, terms, conditions or privileges of employment. This article covers only the Title I aspects of GINA.
Health Plan Requirements
While not conferring or mandating a group health plan or group insurance coverage to provide any particular benefits related to genetic tests, diseases, conditions or genetic services, other than those provided under such plan or coverage, GINA amended ERISA (and similar provisions under the IRC) to establish rules that prohibit a group health plan and a group health insurance issuer from:
GINA expanded the prohibitions under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) against discrimination based on health factors, by prohibiting plans and insurance issuers from adjusting premium or contribution amounts for plans or a group of similarly situated individuals based on genetic information. HIPAA’s privacy rules will be violated if employers request family medical history, or other information which falls within GINA’s definition of genetic information, for underwriting purposes or prior to or in connection with enrollment in a group health plan. This is a change from prior law which allowed plans and issuers to adjust premium amounts for the group health plan or a group of similarly situated individuals based on genetic information.
Who is not covered?
Unlike HIPAA, there are no exceptions from GINA’s requirements for small health plans, although for the sake of accuracy I should add that any group health plan with fewer than 2 participants (is that really a group?) is not subject to the requirements.
What about health risk assessments?
The GINA regulations include several examples which illustrate how their various restrictions would apply to health risk assessments (“HRAs”), the bedrock of many employers’ wellness programs. Allow me to present just a few of those examples:
Example 1: A group health plan provides a premium reduction to enrollees who complete a health risk assessment. The assessment is requested after enrollment, and whether or not it is completed (or what responses are given) it has no effect on the enrollment status of the individual or family members. The health risk assessment includes questions about the individual’s family medical history.
Conclusion: The health risk assessment includes a request for genetic information (that is, the individual’s family medical history). Because completing the health risk assessment results in a premium reduction, the request for genetic information is for underwriting purposes. Therefore, the request violates the GINA requirements. If there was no premium reduction or any other reward for completing the health risk assessment, the GINA requirements would not be violated.
Example 2: A group health plan requests enrollees to complete a health risk assessment prior to enrollment which includes questions about the individual’s family medical history. There is no reward or penalty for completing the assessment.
Conclusion: The health risk assessment includes a request for genetic information (that is, the individual’s family medical history) prior to enrollment. Therefore, the request violates the GINA requirements.
Example 3: A group health plan requests enrollees to complete two distinct HRAs after and unrelated to enrollment. The first HRA instructs the individual to answer only for the individual (and not the individual’s family), and does not ask about any genetic tests the individual has undergone or any genetic services the individual has received. The plan offers a reward for completing the first HRA. The second HRA asks about family medical history and the results of the genetic tests the individual has undergone. The plan offers no reward for completing the second HRA and the instructions make clear that completion of the second HRA is wholly voluntary and will not affect the reward given for completion of the first HRA.
Conclusion: No genetic information is collected in connection with the first HRA (which offers a reward), and no benefits or other rewards are conditioned on the request for genetic information in the second HRA. Therefore, the request for genetic information in the second HRA is not for underwriting purposes, and the two HRAs do not violate the prohibition on the collection of genetic information under GINA.
Penalties
What happens if you make a mistake - we’re all human, after all? GINA can be harsh in her discipline for plan sponsors not following her rules. Both ERISA and the IRC provide for GINA-imposed penalties of a $100 per day per affected individual, with a minimum of $2500 for de minimis violations and a maximum of $15,000 for more substantial violations. The maximum penalty for unintentional failure is $500,000. Please note-the IRS and the DOL each can levy these penalties, so a plan sponsor could get hit with both barrels if a failure is discovered. GINA does not impose a cap for willful or intentional failures.
Penalties-all or any part-may be waived if the failure was discovered during a period that the plan sponsor or group health plan exercised reasonable diligence. (Of course, we’ll need additional regulatory guidance to know when “reasonable diligence” has been exercised.) Does that provide you sufficient comfort?
What’s an employer to do about GINA?
As noted above, the penalties for GINA failures can be steep, although they may be mitigated or eliminated altogether if the employer has exercised reasonable diligence. Thus, employers should take steps to review their plans for compliance, including:
-Collect genetic enrollment after enrollment, but DO NOT use for underwriting.
-Offer plan incentives for completing HRAs ONLY IF genetic information is
not requested.
Included as part of the 2008 Emergency Economic Stabilization Act (“EESA”) was the Mental Health Parity and Addiction Equity Act of 2008 (the “MHPAEA”). No catchy acronym that rolls right off the tongue, nevertheless MHPAEA was important health care legislation.
Background
The initial 1996 Mental Health Party Act (“MHPA”), a part of HIPAA, prohibited large group health plans from applying a separate dollar limit for annual or lifetime mental health services. Although MHPA required equivalent dollar limits for mental health claims, health plans were still able to limit the number of office visits, as well as days that would be covered for an inpatient stay at a mental health facility.
Even parity had its limits and thus MHPAEA expanded the mental health parity protections. MHPAEA prohibits an employer’s group health plan from imposing any restrictions on benefits for mental health treatment or substance use disorders that are not also applied to medical and surgical benefits.
Except as mandated by various state laws, your group health plan is not required to provide mental health or substance abuse benefits, but if the plan does provide such benefits, the following requirements must be met.
Total Lifetime and Annual Limits
A group health plan that does not include a lifetime and/or annual maximum dollar limit on substantially all medical and surgical benefits may not impose a lifetime and/or annual dollar limit on substantially all mental health and substance use disorder benefits. If a plan does include a limit on medical and surgical benefits, the plan must either, (1) provide one overall limit for all benefits applied without distinction between the two categories of benefits; or (2) provide separate but equal limits on mental health/substance use disorder benefits and medical/surgical benefits.
Financial and Treatment Limits
Any deductible, co-payment, coinsurance, out-of-pocket expense, limits on the frequency of treatments, number of visits, days of coverage, or scope of treatment that apply to benefits for mental health/substance use disorders may not be more restrictive than the same financial requirements and treatment limits that are applied to medical/surgical benefits covered by the plan. There can be no cost sharing requirements that apply only to mental health/substance use disorder benefits.
To the extent the plan’s terms and conditions do not conflict with MHPAEA’s parity requirements, it may exclude coverage for a particular mental health or substance use condition, a particular inpatient or outpatient treatment or a treatment setting.
Out-of-Network Providers
If the plan covers medical/surgical treatments and services received by out-of-network providers, the plan must cover treatment and services related to mental health/substance use disorders provided by out-of-network providers.
Exemptions from Compliance
These rules are only applicable to employers who employ more than 50 employees.
While a one-year exemption from the requirements for the next following plan year may apply if the costs associated with compliance increase by more than 2%, you’ll need an actuary to support and certify such cost increase. The employer must notify the IRS and plan participants and beneficiaries if it elects to suspend the mental health/substance use disorder benefits described above.
COBRA – Does the Snake Have Fangs?
Additional significant health care reform legislation was embedded in the American Recovery and Reinvestment Act of 2009 (“ARRA”), including very important and well publicized changes benefiting COBRA-qualified beneficiaries who lost coverage due to the involuntary termination of their employment. Assistance eligible individuals electing COBRA following their involuntary termination of employment would pay only 35% of the full amount, and this government-backed subsidy (through tax credits) would extend for up to nine months. Employers would obtain the remaining 65% through tax credits. An “assistance eligible” individual is a person who became eligible for COBRA between September 1, 2008 and December 31, 2009. Those involuntarily-terminated employees who became eligible for COBRA continuation coverage after December 31, 2009, would not have been eligible for the premium subsidy.
So, now that we’re in 2010, why are we informing you of this COBRA change? Because the country is still facing large unemployment numbers, the COBRA snake still has fangs. On December 21, 2009, President Obama signed into law an extension of the eligibility and coverage periods for federally subsidized COBRA health insurance premiums.
Congress and the President have extended the 65% premium subsidy by six months, for a total of 15 months of subsidized premium coverage, and extended eligibility to those individuals who are involuntarily terminated from their jobs prior to March 1, 2010. A significant change in the subsidy rules permits those individuals who are involuntarily terminated (other than for gross misconduct) before March 1, 2010 to qualify for the subsidy – not just those individuals who are eligible for COBRA continuation coverage before that date.
Those assistance-eligible individuals who had reached the end of their nine-month subsidy period before December 21, 2009, may pay the reduced premium retroactively and maintain COBRA coverage for the remainder of the extended subsidy period if otherwise still eligible for the subsidy.
To reinstate and continue their COBRA coverage, the individual must pay the 35% premium amount for the reinstated coverage period not later than February 19, 2010 (60 days after enactment of the bill), or, if later, 30 days after the date the individual receives notice from his or her former employer regarding the extension. Any assistance eligible individual who paid the full premium amount after the subsidy ended will be reimbursed the premium amount paid in excess of 35%.
Employers must provide additional notification about the COBRA premium subsidy extension to any individual who was an assistance eligible individual at any time on or after October 31, 2009, or who had a qualifying event on or after that date. The notice must be provided by February 19, 2010, or, for qualifying events occurring after December 21, 2009, within the normal COBRA election period. The Department of Labor has issued model notices.
Employers will continue to receive reimbursement from the federal government for 65% of each assistance eligible individual’s COBRA continuation coverage premium.
HIPAA-More Ferocious than a Zoo Animal?
ARRA expanded the health information privacy and security rules under HIPAA.
Business associates (entities that provide services, such as claims processing, to a medical plan or health care provider) are now subject to the same administrative, technical and physical safeguards of the HIPAA security rules that apply to medical plans and health care providers. Both medical plans and business associates must follow specific procedures for notifying medical plan participants of any breach in the privacy of a participant’s protected health information. A “breach” is defined broadly to include the unauthorized acquisition, access, use or disclosure of unsecured protected health information that compromises its privacy, security or integrity, but excludes certain inadvertent disclosures.
What Should you Do Now?
Group health plans should review their HIPAA compliance efforts and their agreements with business associates before the new legislation goes into effect on February 17, 2010, as the privacy requirements applicable to business associates must be incorporated into business associate agreements. Business associates must prepare and implement policies and procedures and other documentation required by the HIPAA security rules. New enforcement actions and civil and criminal penalties apply for violations of the privacy and security rules.
GINA-have You Met Michelle?
As we finalize our compendium of healthcare legislation-in our view, health care reform in the employer health care plan sector- we will discuss one more law-one without an acronym, but rather a human name that embodies a very human story. Michelle’s Law, enacted in October of 2008, to be effective for plan years beginning on or after October 9, 2009 (or January 1, 2010 for calendar year plans) is named for Michelle Morris, a full-time college student who was diagnosed with colon cancer. As a full-time student, she was covered as a dependent under her parents’ health care plan. She was advised by her physician that she should focus her full attention to her cancer treatment, meaning either dropping out of school or reducing her school load to less than that of a full-time student. Taking such action would have meant being dropped from her parent’s employer-subsidized health care plan, necessitating electing COBRA, with a concomitantly large increase in medical premiums. Conversely, remaining as a full-time student, Michelle couldn’t undertake the treatment necessary to attack the cancer. Unfortunately, left with a choice that no one should have to make, she chose to stay in school, and sadly, she died.
So, what does Michelle’s Law require? If a group health plan provides dependent care coverage on the basis of being a full-time college student, the plan must continue the coverage of a dependent child during a period of qualifying medically necessary leave of absence from school. The coverage is required to continue until the earlier of (1) one year after the first day of the medical leave of absence, or (2) the date on which such coverage would otherwise terminate under the terms of the plan. Michelle’s Law applies to almost all insured and self-insured group health plans that extend coverage to dependent children based on student status.
What Should Employers Do?
If your group health plan ties coverage to student status, we recommend that you update plan documents, SPDs, and other plan materials that describe eligibility for benefits, including enrollment materials that require certification of student status.
Conclusion
True, as yet, we have not seen comprehensive health care reform legislation enacted (and we may not-remember I’m not prognosticating), nevertheless, I believe we will continue to see legislation impacting the operation and administration of employer-sponsored health care plans, be it tweaks or large-scale improvements. Maybe that’s reform enough.
Deborah Boughman and Frank Hoffman are with Southfield-based Jaffe Raitt Heuer & Weiss. They can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Founded in 1968, Jaffe Raitt Heuer & Weiss is recognized throughout the nation as a highly qualified, full-service business law firm. With an outstanding reputation for providing sophisticated legal services to entrepreneurial-minded businesses, family-owned enterprises and individuals, Jaffe has more than 100 attorneys and offices in Southfield, Detroit, Ann Arbor, Naples and Jerusalem.
“What,” you ask, “is he talking about?” Allow me to provide you with a brief compendium of the alphabet soup of acronym-laden health care legislation (some health care practitioners call it “reform”) that has been enacted since 2008 and how it affects your organizations’ health care plan(s).
Who’s GINA?
The Genetic Information Non-discrimination Act of 2008 (GINA’s full name) was enacted in May of 2008, and was designed to protect the American people from improper use of genetic information. Title I of GINA applies to employer, union and even government sponsored group health plans and amended several statutes, including Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the Internal Revenue Code of 1986 (“IRC”), with the goal of prohibiting discrimination in health coverage based on genetic information. Title II prohibits employers from using genetic information in most aspects of the employment process, from hiring (or failing to hire), discharging, or relating to the compensation, terms, conditions or privileges of employment. This article covers only the Title I aspects of GINA.
Health Plan Requirements
While not conferring or mandating a group health plan or group insurance coverage to provide any particular benefits related to genetic tests, diseases, conditions or genetic services, other than those provided under such plan or coverage, GINA amended ERISA (and similar provisions under the IRC) to establish rules that prohibit a group health plan and a group health insurance issuer from:
- Charging a higher premium based on genetic information;
- Requesting an individual or family member to undergo a genetic test; and
- Requesting, requiring or purchasing genetic information for underwriting purposes.
GINA expanded the prohibitions under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) against discrimination based on health factors, by prohibiting plans and insurance issuers from adjusting premium or contribution amounts for plans or a group of similarly situated individuals based on genetic information. HIPAA’s privacy rules will be violated if employers request family medical history, or other information which falls within GINA’s definition of genetic information, for underwriting purposes or prior to or in connection with enrollment in a group health plan. This is a change from prior law which allowed plans and issuers to adjust premium amounts for the group health plan or a group of similarly situated individuals based on genetic information.
Who is not covered?
Unlike HIPAA, there are no exceptions from GINA’s requirements for small health plans, although for the sake of accuracy I should add that any group health plan with fewer than 2 participants (is that really a group?) is not subject to the requirements.
What about health risk assessments?
The GINA regulations include several examples which illustrate how their various restrictions would apply to health risk assessments (“HRAs”), the bedrock of many employers’ wellness programs. Allow me to present just a few of those examples:
Example 1: A group health plan provides a premium reduction to enrollees who complete a health risk assessment. The assessment is requested after enrollment, and whether or not it is completed (or what responses are given) it has no effect on the enrollment status of the individual or family members. The health risk assessment includes questions about the individual’s family medical history.
Conclusion: The health risk assessment includes a request for genetic information (that is, the individual’s family medical history). Because completing the health risk assessment results in a premium reduction, the request for genetic information is for underwriting purposes. Therefore, the request violates the GINA requirements. If there was no premium reduction or any other reward for completing the health risk assessment, the GINA requirements would not be violated.
Example 2: A group health plan requests enrollees to complete a health risk assessment prior to enrollment which includes questions about the individual’s family medical history. There is no reward or penalty for completing the assessment.
Conclusion: The health risk assessment includes a request for genetic information (that is, the individual’s family medical history) prior to enrollment. Therefore, the request violates the GINA requirements.
Example 3: A group health plan requests enrollees to complete two distinct HRAs after and unrelated to enrollment. The first HRA instructs the individual to answer only for the individual (and not the individual’s family), and does not ask about any genetic tests the individual has undergone or any genetic services the individual has received. The plan offers a reward for completing the first HRA. The second HRA asks about family medical history and the results of the genetic tests the individual has undergone. The plan offers no reward for completing the second HRA and the instructions make clear that completion of the second HRA is wholly voluntary and will not affect the reward given for completion of the first HRA.
Conclusion: No genetic information is collected in connection with the first HRA (which offers a reward), and no benefits or other rewards are conditioned on the request for genetic information in the second HRA. Therefore, the request for genetic information in the second HRA is not for underwriting purposes, and the two HRAs do not violate the prohibition on the collection of genetic information under GINA.
Penalties
What happens if you make a mistake - we’re all human, after all? GINA can be harsh in her discipline for plan sponsors not following her rules. Both ERISA and the IRC provide for GINA-imposed penalties of a $100 per day per affected individual, with a minimum of $2500 for de minimis violations and a maximum of $15,000 for more substantial violations. The maximum penalty for unintentional failure is $500,000. Please note-the IRS and the DOL each can levy these penalties, so a plan sponsor could get hit with both barrels if a failure is discovered. GINA does not impose a cap for willful or intentional failures.
Penalties-all or any part-may be waived if the failure was discovered during a period that the plan sponsor or group health plan exercised reasonable diligence. (Of course, we’ll need additional regulatory guidance to know when “reasonable diligence” has been exercised.) Does that provide you sufficient comfort?
What’s an employer to do about GINA?
As noted above, the penalties for GINA failures can be steep, although they may be mitigated or eliminated altogether if the employer has exercised reasonable diligence. Thus, employers should take steps to review their plans for compliance, including:
- Identify plan practices that include requests for family medical history or the genetic information, such as HRAs and disease management and wellness programs.
- Revise practices to comply with GINA:
-Collect genetic enrollment after enrollment, but DO NOT use for underwriting.
-Offer plan incentives for completing HRAs ONLY IF genetic information is
not requested.
- Discuss GINA compliance with all third-party administrators and vendors and modify contracts, if necessary for compliance.
- Set up training sessions for managers and supervisors on what constitutes genetic information and how to handle receipt of such information.
Included as part of the 2008 Emergency Economic Stabilization Act (“EESA”) was the Mental Health Parity and Addiction Equity Act of 2008 (the “MHPAEA”). No catchy acronym that rolls right off the tongue, nevertheless MHPAEA was important health care legislation.
Background
The initial 1996 Mental Health Party Act (“MHPA”), a part of HIPAA, prohibited large group health plans from applying a separate dollar limit for annual or lifetime mental health services. Although MHPA required equivalent dollar limits for mental health claims, health plans were still able to limit the number of office visits, as well as days that would be covered for an inpatient stay at a mental health facility.
Even parity had its limits and thus MHPAEA expanded the mental health parity protections. MHPAEA prohibits an employer’s group health plan from imposing any restrictions on benefits for mental health treatment or substance use disorders that are not also applied to medical and surgical benefits.
Except as mandated by various state laws, your group health plan is not required to provide mental health or substance abuse benefits, but if the plan does provide such benefits, the following requirements must be met.
Total Lifetime and Annual Limits
A group health plan that does not include a lifetime and/or annual maximum dollar limit on substantially all medical and surgical benefits may not impose a lifetime and/or annual dollar limit on substantially all mental health and substance use disorder benefits. If a plan does include a limit on medical and surgical benefits, the plan must either, (1) provide one overall limit for all benefits applied without distinction between the two categories of benefits; or (2) provide separate but equal limits on mental health/substance use disorder benefits and medical/surgical benefits.
Financial and Treatment Limits
Any deductible, co-payment, coinsurance, out-of-pocket expense, limits on the frequency of treatments, number of visits, days of coverage, or scope of treatment that apply to benefits for mental health/substance use disorders may not be more restrictive than the same financial requirements and treatment limits that are applied to medical/surgical benefits covered by the plan. There can be no cost sharing requirements that apply only to mental health/substance use disorder benefits.
To the extent the plan’s terms and conditions do not conflict with MHPAEA’s parity requirements, it may exclude coverage for a particular mental health or substance use condition, a particular inpatient or outpatient treatment or a treatment setting.
Out-of-Network Providers
If the plan covers medical/surgical treatments and services received by out-of-network providers, the plan must cover treatment and services related to mental health/substance use disorders provided by out-of-network providers.
Exemptions from Compliance
These rules are only applicable to employers who employ more than 50 employees.
While a one-year exemption from the requirements for the next following plan year may apply if the costs associated with compliance increase by more than 2%, you’ll need an actuary to support and certify such cost increase. The employer must notify the IRS and plan participants and beneficiaries if it elects to suspend the mental health/substance use disorder benefits described above.
COBRA – Does the Snake Have Fangs?
Additional significant health care reform legislation was embedded in the American Recovery and Reinvestment Act of 2009 (“ARRA”), including very important and well publicized changes benefiting COBRA-qualified beneficiaries who lost coverage due to the involuntary termination of their employment. Assistance eligible individuals electing COBRA following their involuntary termination of employment would pay only 35% of the full amount, and this government-backed subsidy (through tax credits) would extend for up to nine months. Employers would obtain the remaining 65% through tax credits. An “assistance eligible” individual is a person who became eligible for COBRA between September 1, 2008 and December 31, 2009. Those involuntarily-terminated employees who became eligible for COBRA continuation coverage after December 31, 2009, would not have been eligible for the premium subsidy.
So, now that we’re in 2010, why are we informing you of this COBRA change? Because the country is still facing large unemployment numbers, the COBRA snake still has fangs. On December 21, 2009, President Obama signed into law an extension of the eligibility and coverage periods for federally subsidized COBRA health insurance premiums.
Congress and the President have extended the 65% premium subsidy by six months, for a total of 15 months of subsidized premium coverage, and extended eligibility to those individuals who are involuntarily terminated from their jobs prior to March 1, 2010. A significant change in the subsidy rules permits those individuals who are involuntarily terminated (other than for gross misconduct) before March 1, 2010 to qualify for the subsidy – not just those individuals who are eligible for COBRA continuation coverage before that date.
Those assistance-eligible individuals who had reached the end of their nine-month subsidy period before December 21, 2009, may pay the reduced premium retroactively and maintain COBRA coverage for the remainder of the extended subsidy period if otherwise still eligible for the subsidy.
To reinstate and continue their COBRA coverage, the individual must pay the 35% premium amount for the reinstated coverage period not later than February 19, 2010 (60 days after enactment of the bill), or, if later, 30 days after the date the individual receives notice from his or her former employer regarding the extension. Any assistance eligible individual who paid the full premium amount after the subsidy ended will be reimbursed the premium amount paid in excess of 35%.
Employers must provide additional notification about the COBRA premium subsidy extension to any individual who was an assistance eligible individual at any time on or after October 31, 2009, or who had a qualifying event on or after that date. The notice must be provided by February 19, 2010, or, for qualifying events occurring after December 21, 2009, within the normal COBRA election period. The Department of Labor has issued model notices.
Employers will continue to receive reimbursement from the federal government for 65% of each assistance eligible individual’s COBRA continuation coverage premium.
HIPAA-More Ferocious than a Zoo Animal?
ARRA expanded the health information privacy and security rules under HIPAA.
Business associates (entities that provide services, such as claims processing, to a medical plan or health care provider) are now subject to the same administrative, technical and physical safeguards of the HIPAA security rules that apply to medical plans and health care providers. Both medical plans and business associates must follow specific procedures for notifying medical plan participants of any breach in the privacy of a participant’s protected health information. A “breach” is defined broadly to include the unauthorized acquisition, access, use or disclosure of unsecured protected health information that compromises its privacy, security or integrity, but excludes certain inadvertent disclosures.
What Should you Do Now?
Group health plans should review their HIPAA compliance efforts and their agreements with business associates before the new legislation goes into effect on February 17, 2010, as the privacy requirements applicable to business associates must be incorporated into business associate agreements. Business associates must prepare and implement policies and procedures and other documentation required by the HIPAA security rules. New enforcement actions and civil and criminal penalties apply for violations of the privacy and security rules.
GINA-have You Met Michelle?
As we finalize our compendium of healthcare legislation-in our view, health care reform in the employer health care plan sector- we will discuss one more law-one without an acronym, but rather a human name that embodies a very human story. Michelle’s Law, enacted in October of 2008, to be effective for plan years beginning on or after October 9, 2009 (or January 1, 2010 for calendar year plans) is named for Michelle Morris, a full-time college student who was diagnosed with colon cancer. As a full-time student, she was covered as a dependent under her parents’ health care plan. She was advised by her physician that she should focus her full attention to her cancer treatment, meaning either dropping out of school or reducing her school load to less than that of a full-time student. Taking such action would have meant being dropped from her parent’s employer-subsidized health care plan, necessitating electing COBRA, with a concomitantly large increase in medical premiums. Conversely, remaining as a full-time student, Michelle couldn’t undertake the treatment necessary to attack the cancer. Unfortunately, left with a choice that no one should have to make, she chose to stay in school, and sadly, she died.
So, what does Michelle’s Law require? If a group health plan provides dependent care coverage on the basis of being a full-time college student, the plan must continue the coverage of a dependent child during a period of qualifying medically necessary leave of absence from school. The coverage is required to continue until the earlier of (1) one year after the first day of the medical leave of absence, or (2) the date on which such coverage would otherwise terminate under the terms of the plan. Michelle’s Law applies to almost all insured and self-insured group health plans that extend coverage to dependent children based on student status.
What Should Employers Do?
If your group health plan ties coverage to student status, we recommend that you update plan documents, SPDs, and other plan materials that describe eligibility for benefits, including enrollment materials that require certification of student status.
Conclusion
True, as yet, we have not seen comprehensive health care reform legislation enacted (and we may not-remember I’m not prognosticating), nevertheless, I believe we will continue to see legislation impacting the operation and administration of employer-sponsored health care plans, be it tweaks or large-scale improvements. Maybe that’s reform enough.
Deborah Boughman and Frank Hoffman are with Southfield-based Jaffe Raitt Heuer & Weiss. They can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Founded in 1968, Jaffe Raitt Heuer & Weiss is recognized throughout the nation as a highly qualified, full-service business law firm. With an outstanding reputation for providing sophisticated legal services to entrepreneurial-minded businesses, family-owned enterprises and individuals, Jaffe has more than 100 attorneys and offices in Southfield, Detroit, Ann Arbor, Naples and Jerusalem.
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