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HCR Update: Appeals Implementation Grace Period Extended, W-2 Reporting

Apr 01, 2011

Health Care Reform Update

April 1, 2011

Health care reform communications going to every other week  

Going forward, we will issue health care reform communications to brokers every other week instead of weekly. As the frequency and amount of information we receive decreases, this will allow us more time to deal with business decisions to implement the health care reform regulations. 

The next health care reform communications to brokers will be April 15. 

Additional grace period issued for appeals implementation      

Just after we sent the update about our implementation approach for some appeals provision regulations, the Department of Labor (DOL) issued Technical Release 2011-01 . This document does not change the current guidance provided in last year's interim final rules. However, it provides health insurers a longer implementation time period for some of the key elements within the 2010 interim final rules.  

Based on this guidance from DOL, health insurers and group health plans have until plan years beginning on or after January 1, 2012, to implement the new requirements related to: 

  • Including diagnosis and procedure codes on denial notices;
  • Providing notices to consumers in languages other than English;
  • Shortening the time period for prior approval of an urgent care claim; and
  • Giving claimants the right to bypass internal appeals and go to external appeal or litigation if the insurer or plan fails to "strictly comply" with the rule.  

Previous guidance from DOL required compliance with all of these requirements on July 1, 2011.

During this new implementation time frame, health insurers and group health plans are not required to implement these provisions. This new time frame is designed to provide the agencies with more time to issue an amended interim final rule, and we anticipate its release in the near future, and this may impact our implementation. 

This technical release does not impact existing interim final rules that require adverse benefit determinations (for example, denial notices, explanation of benefit forms, etc.) to include the amount and date of the claim, service provider and reason for denial. And, health insurers are still required to include the enhanced description of internal/external appeals process and state-specific contact information, if applicable, for the state's office of health insurance consumer assistance. All of these requirements, as defined in the interim final rules, will still apply for plan years beginning on or after July 1, 2011.  

Thank you for your patience and understanding as our implementation teams continue to assess and act on the latest regulatory guidance.

W-2 reporting delayed further for some employers

Earlier this week the Internal Revenue Service issued additional interim guidance (Notice 2011-28) related to reporting the cost of employer-sponsored health insurance coverage on employees' W-2s.

The release extends the transition relief period for employers who file fewer than 250 W-2s. For these employers, reporting is now required starting with W-2s for the 2013 tax year, which would be issued in 2014.

Additionally, the release provides more clarification on how employers can calculate the cost of coverage to meet this reporting requirement. Please reference questions 24 - 27 and question 31 in the Notice 2011-28.

The guidance reaffirms that this is a reporting requirement only and does not impact employees' taxable wages.

Now you have a single, reliable resource for health care reform information.

This content is provided solely for informational purposes: It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.

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