Special Enrollment Periods for 2011 Plan Years
Smart first steps
Group health plans, including grandfathered health plans, may need to offer certain employees and their dependents a 30-day special enrollment opportunity beginning not later than the first day of the first plan year beginning on or after September 23, 2010. Specifically, a special enrollment opportunity may be required if –
- The plan currently provides coverage for employees’ children, but eligibility for that coverage can end before an employee’s child reaches age 26, or
- The plan currently imposes a lifetime limit on the dollar value of benefits.
These special enrollment opportunities are part of the requirements for implementing the health reform law’s age-26 mandate and ban on lifetime limits, respectively.
The age-26 mandate basically will require group health plans that offer coverage to employees’ children to allow those children to remain in the plan until they turn 26, even if they are married and/or no longer full-time students. (See Issue Brief #1) The related special enrollment opportunity requires these plans to let employees’ children re-enroll if they previously aged out and are still not 26 years old.
The ban on lifetime limits on the dollar value of all benefits will require plans to eliminate these limits. (See Issue Brief #6) The related special enrollment opportunity requires these plans to let those participants or beneficiaries who previously reached the lifetime maximum to re-enroll if they are still eligible under the plan’s terms.
Notice of these special enrollment periods must be given in writing. Model notices are available at http://www.dol.gov/ebsa/healthreform/.
These special enrollment periods must remain open for a minimum of 30 days. This is true even if the special enrollment periods begin at the same time as the plan’s annual open enrollment period, which may last less than 30 days.
The model notices for these special enrollment periods issued by the Departments of Health and Human Services, Labor, and Treasury, are as follows:
Individuals whose coverage ended, or who were denied coverage (or were not eligible for coverage), because the availability of dependent coverage of children ended before attainment of age 26 are eligible to enroll in [Insert name of group health plan or health insurance coverage]. Individuals may request enrollment for such children for 30 days from the date of notice. Enrollment will be effective retroactively to [insert date that is the first day of the first plan year beginning on or after September 23, 2010.] For more information contact the [insert plan administrator or issuer] at [insert contact information].
Lifetime Limit Ban
The lifetime limit on the dollar value of benefits under [Insert name of group health plan or health insurance issuer] no longer applies. Individuals whose coverage ended by reason of reaching a lifetime limit under the plan are eligible to enroll in the plan. Individuals have 30 days from the date of this notice to request enrollment. For more information contact the [insert plan administrator or issuer] at [insert contact information].
Effective Date: The required notices must be given, and the special enrollment periods must begin, no later than the first day of the first plan year beginning on or after September 23, 2010 (January 1, 2011 for calendar year plans). Anyone who is eligible and elects coverage pursuant to either special enrollment opportunity must be enrolled effective as of the first day of the first plan year beginning on or after September 23, 2010.
Key Implication: Administration
Plan administrators must determine if their plans are required to offer either or both special enrollment opportunities and who is eligible for these opportunities. One or both special enrollment opportunities likely will be required if the plan currently has a lifetime limit on the dollar value of all benefits or cuts off eligibility for employees’ children for any reason before age 26. The next decision relates to timing. Should the special enrollment periods be offered before the next plan year begins – perhaps contemporaneously with the plan’s annual open enrollment period – or should it be offered beginning the first day of the next plan year? Then the required notices must be given in a timely manner, and special enrollments processed.
Smart First Steps for Employers to Consider
Plan Administration: Consider offering the special enrollment periods, if required, during the plan’s annual open enrollment period to minimize the additional administrative burden. In cases whether the plan’s annual open enrollment period is less than 30 days, the special enrollment periods still must remain open for 30 days. So in this circumstance consider keeping the 2011 annual open enrollment period open for 30 days too in order to minimize participant confusion. If the special enrollment periods do not begin until the first day of the next plan year, make sure special enrollees’ coverage is effective as of the first day of the next plan year even if they do not make their election until the end of the applicable special enrollment period.
Communications: Use or closely follow model notices to ensure minimum content requirements are satisfied. Notices can be included in other enrollment materials plans distribute to employees, but must be prominent. If notices are included with other enrollment materials and the annual open enrollment period is scheduled to run less than 30 days, be careful to highlight and explain the different time periods in order to avoid employee confusion and potential compliance issues. Note that giving the required notices to employees is sufficient even if it is the employee’s spouse or dependent who has the special enrollment right.
As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.