SEC. 2719(b) of the PPACA imposes new external review requirements on group health plans. (Grandfathered plans, i.e., a health plan in which an individual was enrolled on March 23, 2010, escapes Sec. 2719.)
This is a significant augmentation of plan participant rights.
|(b) EXTERNAL REVIEW.—A group health plan and a health insurance issuer offering group or individual health insurance coverage— (1) shall comply with the applicable State external review process for such plans and issuers that, at a minimum, includes the consumer protections set forth in the Uniform External Review Model Act promulgated by the National Association of Insurance Commissioners and is binding on such plans;|
or (2) shall implement an effective external review process that meets minimum standards established by the Secretary through guidance and that is similar to the process described under paragraph (1)— (A) if the applicable State has not established an external review process that meets the requirements of paragraph (1); or (B) if the plan is a self-insured plan that is not subject to State insurance regulation (including a State law that establishes an external review process described in paragraph (1)). (my emphasis)
The NAIC model act on available for review on the NAIC website.
Note particularly the sections pertaining to the binding effect of the external review.* Are those sections a part of the process that must be incorporated into self-funded plans that are not grandfathered? It would seem so. I’d be interested in your comments on that particularly, and any general comment on external review from prior experience with state laws imposing similar requirements.
* From the NAIC Model Act:
|Section 11. Binding Nature of External Review Decision A. An external review decision is binding on the health carrier except to the extent the health carrier has other remedies available under applicable State law.|
B. An external review decision is binding on the covered person except to the extent the covered person has other remedies available under applicable federal or State law.
C. A covered person or the covered person’s authorized representative may not file a subsequent request for external review involving the same adverse determination or final adverse determination for which the covered person has already received an external review decision pursuant to this Act.
Note: Certain plans are exempt from Subtitles A and C of the PPACA. These are group health plans that were in existence on March 23, 2010.
We don’t know yet what regulations will be forthcoming on this issue but it would be an expensive mistake to, say, subject a plan to the new external review requirements because of plan amendments. So be careful.
As with the implementation of many other aspects of health care reform, the finer details pertaining to retaining grandfathered status are still to be determined. It is clear that enrolled individuals may add family members to their coverage if on March 23, 2010, the plan permitted this enrollment. It is also clear that new employees and their families can be enrolled without jeopardizing the plan’s grandfathered status.
Apart from these two allowances, PPACA is silent on the changes that may be made to a grandfathered plan without losing grandfathered status or even if grandfathered status can be lost. There is hope that some design changes are permissible, because earlier versions of health reform bills expressly prohibited changes. But before more guidance on this is issued, any changes to a grandfathered plan should be very carefully considered.
Further caution – Grandfathered plans are still subject to a number of the new requirements, such as PHSA Sec. 2708 (excessive waiting periods), PHSA Sec. 2711 (lifetime limits),PHSA Sec. 2712 (rescissions) and PHSA Sec. 2714 (extension of dependent coverage).
Effective Date – Plan years beginning six months after enactment. Since most plans are calendar year, 1/1/2011 will be the first plan year for the majority of plans.