Compliance specialists at Proskauer Rose L.L.P. say the U.S. Department of Labor is starting to audit health and welfare plans for compliance with the Patient Protection and Affordable Care Act of 2010 (PPACA).
The Labor department seems to be sending one type of written PPACA audit notice to plans that claim “grandfathered” status, a second type to non-grandfathered plans, and a third type to both grandfathered and non-grandfathered plans.
A plan can qualify for grandfathered status by showing that it is roughly the same today as it was before March 23, 2010, when PPACA was signed into law.
PPACA exempts grandfathered plans from some PPACA coverage requirements.
Some of the PPACA provisions that already apply to plans deal with matters such as young adult dependents’ access to coverage, coverage for preventive services, coverage for emergency services, annual benefits limits, and appeal rights.
Lawmakers are fighting PPACA in Congress, and states and others are fighting PPACA at the Supreme Court. But, unless and until the court rules that PPACA is unconstitutional, “the act is enforceable and will be enforced by the [Labor Department],” the Proskauer Rose compliance specialists say in a PPACA audit client alert posted on the firm’s website.
The Labor Department has been doing plan audits for compliance with other benefits rules, such as 401(k) plan rules, for years.
From grandfathered plans, the Labor Department is asking for copies of grandfathered status disclosure documents and documents showing that the plans qualify for grandfathered status, the compliance specialists say.
From non-grandfathered plans, the department is asking for documents such as emergency services benefits documents, preventive services documents, and descriptions of internal claims and appeals procedures.
Plans must show, for example, that they they are covering out-of-network emergency services without requiring more cost sharing than they would require of enrollees using in-network emergency services.
The Labor Department also is auditing plans’ compliance with provisions that affect both grandfathered and non-grandfathered plans, such as the requirement that plans offering dependent coverage make dependent coverage available to adult children up to age 26.
The Proskauer Rose compliance specialists are recommending that employers and plans keep written records of any steps taken to comply with PPACA since Sept. 23, 2010.
“For example, plans should keep and be able to produce notices of coverage for children up to 26 years of age, and evidence of distribution,” the compliance specialists say.
Anyone who gets a PPACA compliance audit request should talk to lawyers immeidately, because the parties involved may need to act quickly to protect their interests, the compliance specialists say.