BeneBits©

Legislative Refresher December 14, 2009


Even as the marathon debate regarding the future direction of the path our nation will take with respect to health care continues, other state and federal laws affecting employee benefits have already gone into effect. We’ve covered these in past BeneBits but here’s a refresher…

HIPAA Privacy and Security – Effective September 23, 2009

The HIPAA Privacy and Security rules were amended in February, 2009 as part of the American Recovery and Reinvestment Act. Covered Entities, Business Associates and Plan Sponsors must be prepared for possible sanctions beginning in February, 2010. Group health plans are now required to notify individuals whenever a breach of that individual’s protected health information has occurred. Business Associates (health plans) will now be directly responsible for PHI as well.

The new provisions require companies to establish procedures to notify affected participants when their information has been disclosed in violation to a company’s Notice of Privacy Practices. Companies are also required to update their privacy policy, notice and procedures. Business Associate agreements with vendors must be updated to reflect their new roles and responsibilities. Employers are now required to maintain a log of all privacy breaches and submit the log annually to the Department of Health and Human Services. And, employees who use or who can see protected health information must be trained or retrained regarding the new provisions.

Genetic Information Nondiscrimination Act of 2008 – Effective at the beginning of the Plan Year starting after May 21, 2009

This law prohibits the use of genetic information in the course of business with respect to setting employee rates or eligibility requirements. The law also prohibits the use of genetic information for employment decisions.

Mental Health Parity Act of 2008 – Effective at the beginning of the Plan Year starting on or after October 3, 2009

This law prohibits health plans from imposing dollar or visit limits to mental health and substance abuse provisions if other plan provisions are not limited in the same manner. For example, many plans in 2008 had inpatient mental heath limits but not inpatient limits for other illnesses.

Michelle’s Law – Effective at the beginning of the Plan Year starting on or after October 9, 2009

This law affects dependent student coverage. Most plans require children covered on an employer’s health plan to maintain a full-time student status over age 18 or 19 in order to maintain eligibility. Students who reduced their classes below a full-time basis due to serious illness or injury lost coverage, requiring COBRA payments in order to maintain medical coverage. This new law requires health plans to continue coverage on a non-COBRA basis for the lesser time period of up to one year or until the child can return to school.

ARRA COBRA Premium Reduction Subsidy

The ability to apply and receive a reduction of COBRA premium for up to 9 months will expire on December 31, 2009 unless the federal government acts to extend this program. Currently there are two bills introduced in Congress to expand and modify the current program. HR 3930 would extend the current 9 month subsidy period to 15 months and extend the program to employees involuntarily terminated through June 30, 2010. Senate bill 2730 would also extend the nine month subsidy to 15 months and cover employees involuntarily terminated through June 30, 2010. The Senate bill would increase the subsidy from 65% to 75%.

Illinois Public Act 95-0958 – Young Adult Dependent Coverage

Although this law was effective June 1, 2009 – the effective date for fully insured medical plans that renew their coverage on a calendar year basis is January 1, 2010. This law requires fully-insured medical plans with dependent eligibility to offer or extend coverage to children of employees covered on group health plans until age 26 if they are unmarried and age 30 if one or both of the adult child’s parents are military veterans.