DOL Audits Of Employer-Sponsored Group Health Plans Now Include Healthcare Reform Compliance

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This post was contributed by Stephen R. Kern, Esq., a Member in the Employee Benefits Practice Group.

The U.S. Department of Labor (the "DOL") has recently enhanced its enforcement activities with respect to group health plans by significantly increasing the number of audits it is conducting. In addition, the DOL's audit letters contain significant document requests that are directed specifically at compliance with the Patient Protection and Affordable Care Act ("PPACA" or "healthcare reform") compliance obligations. For example, the DOL's audit letters now include the following:

  • Age 26 mandate – Plans must provide a sample of the written notice describing the enrollment rights for dependent children up to the age of 26 that has been used by the plan since September 23, 2010. 
  • Prohibition on rescissions of coverage – If the plan has rescinded coverage, it must supply a list of all affected individuals and a copy of the written notice provided 30 days in advance of each rescission. The DOL will analyze whether the reason for the rescission complies with the healthcare reform standard of fraud or intentional misrepresentation of a material fact.
  • Monetary limits on essential health benefits – Plans that have imposed dollar limits since September 23, 2010 must provide documentation showing the limits that are applicable for each year. A plan must also provide a sample of the notice that it sent to participants stating that the plan's lifetime limits had been eliminated. 
  • Grandfathered plan status – Employers that are retaining grandfathered plan status must provide documentation to substantiate that status, as well as a copy of the notice that is part of the plan's documents and has been provided to participants and beneficiaries.
  • Choice of Provider Notice – Nongrandfathered plans must provide a copy of the notice informing participants of the right to designate their choice of certain providers as well as a list of participants who received the notice. 
  • Claims and external review – Nongrandfathered plans must provide samples of the claims and appeals forms that have been used since September 23, 2010 plus the contracts with any independent review organizations or third party administrators that are providing the required external reviews. 

In light of this recent DOL audit activity, employers should carefully document their files regarding these healthcare reform compliance issues. To assist employers in this regard, the DOL recently published a very useful checklist entitled "Self-Compliance Tool for Part 7 of ERISA: Affordable Care Act Provisions" on its website. The DOL compliance tool allows employers to engage in a step-by-step analysis of their level of compliance with the healthcare reform requirements that are currently effective. In addition to the compliance issues referenced above, the compliance tool also deals with summary of benefits and coverage, emergency care, and preventive services. 

The increased scope of the DOL's group health plan audits echoes the recent expansion of other DOL investigations and audits of employers (e.g., wage and hour audits, and other areas of labor and employment law compliance – see our recent blog article for more information).  If you have any questions regarding DOL audits or PPACA, please do not hesitate to contact any member of our Labor & Employment and Employee Benefits Practice Groups.

Topics:  Affordable Care Act, Audits, Compliance, DOL, Employer Group Health Plans, Healthcare

Published In: Health Updates, Insurance Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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