Form M-1 Report for Multiple Employer Welfare Arrangements (MEWAs) and Certain Entities Claiming Exception (ECEs)

Transcription

1 U.S. Department of Labor Employee Benefits Secrity Administration Room N Constittion Avene, NW Washington, DC P-450 Form M-1 Report for Mltiple Employer Welfare Arrangements (MEWAs) and Certain Entities Claiming Exception (ECEs) This package contains the following form and related instrctions: Form M-1 Instrctions Self-Compliance Tool Package Form M-1

2 If yo have additional qestions abot the Form M-1 filing reqirement or the ERISA health coverage reqirements, there s help for yo. Form M-1 Filing Reqirement (1) For qestions on completing the Form M-1, contact the Employee Benefits Secrity Administration s (EBSA s) Form M-1 help desk at (2) For inqiries regarding electronic filing capability, contact the EBSA compter help desk at (3) For inqiries regarding the Form M-1 filing reqirement, contact the Office of Health Plan Standards and Compliance Assistance at ERISA Health Coverage Reqirements (1) For qestions abot ERISA s health coverage reqirements, contact EBSA electronically at or by calling toll-free (2) Information inclding reglations, freqently asked qestions, compliance assistance materials, and other gidance regarding the reqirements related to the grop market reforms added to ERISA by the Patient Protection and Affordable Care Act of 2010 can be fond at (3) EBSA s Health Benefits Edcation Campaign offers compliance assistance seminars across the contry addressing a wide variety of health care isses, inclding HIPAA, MHPAEA, the grop market reform provisions of the Affordable Care Act, and COBRA. For information on pcoming compliance assistance seminars, go to The Department of Labor s EBSA has many helpfl compliance assistance pblications on ERISA s health benefits reqirements, inclding: MEWAs: Mltiple Employer Welfare Arrangements nder the Employee Retirement Income Secrity Act: A Gide to Federal and State Reglation Health Benefits Coverage Under Federal Law An Employer s Gide to Grop Health Contination Coverage Under COBRA EBSA also has many pblications to assist participants and beneficiaries. EBSA s pblications are available on the Internet at by contacting EBSA electronically at or by calling toll-free

3 PART I 2015 Form M-1 MEWA-ECE Form This Form is Open to Pblic Inspection Complete as applicable: A Identify the type of filing: (1) Annal Report: Calendar Year; or Fiscal Year beginning and ending (2) Registration (3) Origination (4) Special Filing B Check here if this is a final report Check here if this is an amended report Check here if this is a reqest for an extension PART II Report for Mltiple Employer Welfare Arrangements (MEWAs) and Certain Entities Claiming Exception (ECEs) This filing is reqired to be filed nder section 101(g) of the Employee Retirement Income Secrity Act of 1974, as amended by the Patient Protection and Affordable Care Act. PURPOSE OF FILING C Identify the type of entity: (1) A Plan MEWA (2) A Non-Plan MEWA (3) An Entity Claiming Exception (ECE) OMB No Department of Labor Employee Benefits Secrity Administration D Enter the most recent date the MEWA or ECE filed the Form M-1: Check the box if this is the first filing or enter the date below. 1a Name and address of the MEWA or ECE 1b Telephone nmber of the MEWA or ECE 1c 1d Employer Identification Nmber (EIN) Plan Nmber (PN) 2a Name and address of the administrator of the MEWA or ECE 2b Telephone nmber of the administrator 2c 2d SAMPLE EIN address of the administrator 3a Name and address of the entity or entities sponsoring the MEWA or ECE 3b Telephone nmber of the sponsor 4a Name and address of the agent for service of process or registered agent 4b Telephone nmber of sch person 5a CUSTODIAL & FINANCIAL INFORMATION Name and address of each member of the Board, officer, trstee, or cstodian of the MEWA or ECE 3c 4c 5b 5c EIN address of sch person Telephone nmber of each sch person address of sch person 6a Name and address of all promoters and/or agents responsible for marketing the MEWA or ECE 6b Telephone nmber of each promoter or agent 6c address of sch person 6d EIN of each promoter or agent

4 Form M-1 Page 2 7a Name and address of any person, financial instittion(s), or other entity holding assets for the MEWA or ECE 7b Telephone Nmber of person financial instittion or entity 8a 9a Name and address of any actary(ies) providing services to the MEWA or ECE If the MEWA or ECE has a contract with a third party administrator (TPA) the name and address of the third party administrator(s) 10a Name and address of any person or entity that has athority or control over the MEWA s or ECE s assets or over assets paid to the entity by plans or employers for the provision of benefits 11a Name and address of any person or entity that has discretionary athority, control, or responsibility with respect to the administration of the MEWA or ECE or any benefit program offered by it 12a Names and addresses of the MEWAs or ECEs that merged 8b 8c 8d 9b 9c 9d Telephone nmber of each actary address of each actary EIN of each actary Telephone nmber of each TPA address of each TPA EIN of each TPA 10b Telephone nmber of each sch person or entity 10c address of sch person or entity 10d EIN of each sch person or entity 11b Telephone nmber of each sch person or entity 11c address of sch person or entity 11d EIN of each sch person or entity 12b Telephone nmber of the entities 12c EINs 12d PNs 13 Do yo have an opinion from an actary assessing the MEWA s or ECE s actarial sondness, inclding the adeqacy of contribtion rates? Yes No 14a Are yo, yor entity, and/or its officers, directors, and employees covered by fidciary liability policies? Please identify the carrier that issed the fidciary liability policy(ies) in the space provided. Yes No SAMPLE 14b Are the fidciaries of each of the plans whose participants are receiving benefits from the entity covered by a fidciary liability policy? Yes No 15 Are all assets in the possession of the MEWA or ECE maintained consistent with section 403 of ERISA and 29 CFR a-1 and b-1? Yes No If no, please explain. 16a Within the past five years, has any litigation, investigation, or other enforcement proceeding (inclding any administrative proceeding) regarding any MEWA, ECE, or Grop Health Plan been institted by a Federal or State agency against the MEWA or ECE, a trstee, or a director, owner, partner, senior manager, or officer of the sponsoring entity? If yes, please identify each litigation or enforcement proceeding to inclde (if applicable): (1) the case nmber, (2) the date, (3) the natre of the proceedings, (4) the cort, (5) all parties (for example, plaintiffs and defendants or petitioners and respondents), and (6) the disposition. Yes No 16b Have any of the persons or entities listed in this Part II ever been the sbject of any criminal or civil investigation or action involving dishonesty or breach of trst or been convicted of a felony? Yes No If yes, please explain. 16c Have any cease and desist orders been issed by a Federal or State agency against any persons or entities listed in this Part II? Yes No If yes, please list the issing entities and the year in which each order was issed.

5 Form M-1 Page 3 17 Complete the following chart: 17a 17b 17c 17d 17e 17f 17g 17h 17i 17j Enter all States where the MEWA or ECE is operating. Is coverage provided? State registration nmber. Name of state agent or entity for service of process. Is the entity a licensed health insrer in this State? If yes to 17e, enter NAIC nmber. If no to 17e, is the entity flly insred? If yes to 17g, enter name and NAIC nmber of insrer. Does the entity prchase stop loss coverage? If yes to 17i, enter the name and NAIC nmber of insrer. 18 Of the States identified in box 17a, identify those States in which the entity condcted 20 percent or more of its bsiness (based on the nmber of participants receiving coverage for medical care). 19 Total nmber of participants covered nder the entity as of the last day of the year to be reported. (For Registration, Origination, or Special Filing, report crrent information as of the date of the filing).... PART III INFORMATION FOR COMPLIANCE WITH PART 7 OF ERISA 20 If yo answered yes to box 16a, in reference to any State or Federal litigation or enforcement proceeding (inclding any administrative proceeding), check yes below if the allegation concerns a provision nder part 7 of ERISA, a corresponding provision nder the Internal Revene Code or Pblic Health Service Act, a breach of any dty nder Title I of ERISA if the nderlying violation relates to a reqirement nder part 7 of ERISA, or a breach of a contractal obligation if the contract provision relates to a reqirement nder part 7 of ERISA Is this a filing for which compliance with part 7 can be evalated? (Note: The Self-Compliance Tool at may be helpfl in answering Boxes 21a-21f.) If yes, complete the following.... Yes No Yes No 21a Is the coverage provided by the MEWA or ECE in compliance with the portability and nondiscrimination provisions of the Health Insrance Portability and Accontability Act of 1996, inclding Title I of the Genetic Information Nondiscrimination Act of 2008, and the Department of Labor s (Department s) reglations issed therender?... Yes No N/A 21b Is the coverage provided by the MEWA or ECE in compliance with the Mental Health Parity Act of 1996 and the Mental Health Parity and Addiction Eqity Act of 2008 and the Department s reglations issed therender?... Yes No N/A 21c Is the coverage provided by the MEWA or ECE in compliance with the Newborns and Mothers Health Protection Act of 1996 and the Department s reglations issed therender?... Yes No N/A 21d Is the coverage provided by the MEWA or ECE in compliance with the Women s Health and Cancer Rights Act of 1998?... Yes No N/A 21e Is the coverage provided by the MEWA or ECE in compliance with Michelle s Law?... Yes No N/A SAMPLE 21f Is the coverage provided by the MEWA or ECE in compliance with the Patient Protection and Affordable Care Act of 2010 and the Department s reglations issed therender that are applicable as of the date signed at the bottom of this form?... Yes No N/A ATTACHMENTS SIGNATURE Under penalty of perjry and other penalties set forth in the instrctions, I declare that I have examined this report, inclding any accompanying attachments, and to the best of my knowledge and belief, it is tre and correct. Under penalty of perjry and other penalties set forth in the instrctions, I also declare that, nless this is an extension reqest, this report is complete. Signatre of Administrator: Address of Administrator: Date:

6 Department of Labor Employee Benefits Secrity Administration Instrctions for Form M-1 Report for Mltiple Employer Welfare Arrangements (MEWAs) and Certain Entities Claiming Exception (ECEs) Abot the Form M-1 The Form M-1 is sed to report information concerning a mltiple employer welfare arrangement (MEWA) and any entity claiming exception (ECE). Reporting is reqired prsant to ERISA section 101(g), 104(a), 505 and 734 of the Employee Retirement Income Secrity Act of 1974 (ERISA), as amended, and 29 CFR and Yo mst file the Form M-1 electronically. Yo cannot file a paper Form M-1 by mail or other delivery service. Yor Form M-1 will be initially screened electronically so it is in the filer s best interest that the responses accrately reflect the circmstances they were designed to report. For more information, see the instrctions for Electronic Filing Reqirement and the Form M-1 filing system at The Department of Labor, EBSA, is committed to working together with administrators to help them comply with this filing reqirement. If yo have any qestions (sch as whether yo are reqired to file this report) or if yo need any assistance in completing this report, please call the EBSA Form M-1 help desk at Changes to Note The Form M-1 is sbstantively different from previos years and now reqires filers to inclde cstodial and financial information relating to the MEWA or ECE. Also, the new rles impose stricter, 30-day filing deadlines for MEWA registration and ECE origination and special filing events. Depending on the type of event experienced, the MEWA or ECE mst file the Form M-1 either 30 days prior to or within 30 days of the event. All MEWAs that are employee welfare benefit plans are now sbject to the Form 5500 annal report. For more information on the Form 5500 yo can access or call toll-free at Electronic Filing Only. The Form M-1 mst be filed electronically. Printed copies of the Form M-1 will no longer be made available. Detailed information on electronic filing is available at mewa. For inqiries regarding electronic filing capability, contact the EBSA compter help desk at MEWA registration. The Patient Protection and Affordable Care Act ( Affordable Care Act ) amended section 101(g) of ERISA reqiring MEWAs to register with the Secretary prior to operating in a State. In addition to the Form M-1 annal report reqirement, now MEWAs mst file the Form M-1 30 days prior to operating in any State or within 30 days of knowingly expanding operations into an additional State, experiencing a merger, a participant increase of 50 percent or more, or a material change. ECE origination and special filings. In addition to the annal reports, ECEs now mst file 30 days prior to operating in any State or within 30 days of knowingly expanding operations in an additional State, experiencing a merger, a participant increase of 50 percent or more, or a material change. ECEs mst only file when sch events occr for the first three years after an origination, which is limited to when the ECE first begins operating in a State, experiences a merger or has a participant increase of 50 percent or more. ECEs that move into an additional State or experience a material change will not be reqired to file otside of the three year window. Table of Contents SECTION 1: Who Mst File... 2 General Rles... 2 Exceptions to the Filing Reqirements... 2 SECTION 2: When to File... 3 Annal Report General Rle... 3 Annal Report Exception for 2012 Filings... 3 Registration, Origination or Special Filings... 3 Material Change... 4 Extensions of Time... 4 Section 3: Electronic Filing... 4 How to File... 4 Amended Report... 4 Final Report... 4 Attaching Additional Pages... 4 Penalties... 4 Signatre and Date... 4 SECTION 4: Line-by-Line Instrctions... 5 Part I Prpose of Filing... 5 Part II Cstodial & Financial Information... 5 Part III Information for Compliance with Part 7 of ERISA... 8 Paperwork Redction Act Notice... 10

7 SECTION 1: Who Mst File General Rles The administrator of a MEWA mst file this report regardless of whether the entity is a grop health plan. The administrator of an ECE mst file this report dring the first three years after the ECE is originated. A MEWA is an employee welfare benefit plan or other arrangement that is established or maintained for the prpose of offering or providing medical care to the employees of two or more employers (inclding one or more self-employed individals), or to their beneficiaries, except that the term does not inclde any sch plan or other arrangement that is established or maintained nder or prsant to one or more agreements that the Secretary finds to be collective bargaining agreements, by a rral electric cooperative, or by a rral telephone cooperative association. See ERISA section 3(40). (Note: Many States reglate entities as MEWAs sing their own State definition of the term. Whether or not an entity meets a State s definition of a MEWA for prposes of reglation nder State law is a matter of State law.) An entity claiming exception or ECE is an entity that claims it is not a MEWA on the basis that the entity is established or maintained prsant to one or more agreements that the Secretary finds to be collective bargaining agreements within the meaning of section 3(40) (A)(i) of ERISA and 29 CFR For more information on MEWAs, visit EBSA s Web site at or call the EBSA toll-free hotline at and ask for the booklet entitled MEWAs: Mltiple Employer Welfare Arrangements nder the Employee Retirement Income Secrity Act (ERISA): A Gide to Federal and State Reglation. For information on State MEWA reglation, contact yor State Insrance Department. Exceptions to the Filing Reqirements In no event is reporting reqired by the administrator of a MEWA or ECE if the MEWA or ECE meets any of the following conditions: (1) It is licensed or athorized to operate as a health insrance isser in every State in which it offers or provides coverage for medical care to employees. The term health insrance isser or isser is defined, in pertinent part, in of the Department s reglations as an insrance company, insrance service, or insrance organization (inclding an HMO) that is reqired to be licensed to engage in the bsiness of insrance in a State and that is sbject to State law which reglates insrance.... Sch term does not inclde a grop health plan. (2) It provides coverage that consists solely of excepted benefits, which are not sbject to part 7 of ERISA. (However, if the MEWA or ECE provides coverage that consists both of excepted benefits and other benefits for medical care that are not excepted benefits, the administrator of the MEWA or ECE is reqired to file the Form M-1.) (3) It is a grop health plan that is not sbject to ERISA, inclding a governmental plan, chrch plan, or plan maintained only for the prpose of complying with workers compensation laws within the meaning of sections 4(b)(1), 4(b)(2), or 4(b)(3) of ERISA, respectively. In general, a grop health plan means an employee welfare benefit plan to the extent that the plan provides medical care to employees (inclding both crrent and former employees) or their dependents (as defined nder the terms of the plan) directly or throgh insrance, reimbrsement, or otherwise. See ERISA section 733(a) and 29 CFR (4) It provides coverage only throgh grop health plans that are not covered by ERISA, inclding governmental plans, chrch plans, and plans maintained only for the prpose of complying with workers compensation laws within the meaning of sections 4(b)(1), 4(b)(2), or 4(b) (3) of ERISA, respectively (or other arrangements not sbject to ERISA, sch as health insrance coverage offered to individals other than in connection with a grop health plan, known as individal market coverage). In addition, in no event is reporting reqired by the administrator of an entity that meets the definition of a MEWA or ECE becase one or more of the following is tre: (1) It provides coverage to the employees of two or more trades or bsinesses that share a common control interest of at least 25 percent at any time dring the plan year, applying principles similar to the principles applied nder section 414(c) of the Internal Revene Code. (2) It provides coverage to the employees of two or more employers de to a change in control of bsinesses (sch as a merger or acqisition) that occrs for a prpose other than avoiding Form M-1 filing and is temporary in natre (i.e., it does not extend beyond the end of the plan year following the plan year in which the change in control occrs). (3) It provides coverage to persons (exclding sposes and dependents) who are not employees or former employees of the plan sponsor, sch as nonemployee members of the board of directors or independent contractors, and the nmber of sch persons who are not employees or former employees does not exceed one percent of the total nmber of employees or former employees covered nder the arrangement, determined as of the last day of the year to be reported or determined as of the 60th day following the date the MEWA or ECE began operating in a manner sch that a filing is reqired prsant to 29 CFR (e)(1)(i), (2), or (3). Page 2

8 SECTION 2: When to File Annal Report General Rle For prposes of these instrctions, an annal report refers to the annal Form M-1 filing reqired of all MEWAs and certain ECEs. The annal report mst be filed no later than March 1 following any calendar year for which a filing is reqired (nless March 1 is a Satrday, Snday, or Federal holiday, in which case the form mst be filed no later than the next bsiness day). Filing the Form M-1 annal report, does not satisfy the reqirement nder ERISA section 104 and 29 CFR to file an annal report (Form 5500 series). The administrator of an ECE mst file an annal report if the ECE was last originated at any time within 3 years before the annal filing de date. An ECE may be originated more than once. No annal report is reqired if, between October 1 and December 31, the MEWA or ECE experiences an origination, special filing, or registration event and makes a sbseqent, timely filing. The administrator of a MEWA or ECE that is reqired to file mst file the annal report sing the previos calendar year s information. (For example, for a filing de by March 1, 2016, calendar year 2015 information shold be sed.) However, the administrator of a MEWA or ECE may report sing fiscal year information if the administrator of the MEWA or ECE has at least 6 continos months of fiscal year information to report. (Ths, for example, for a filing that is de by March 1, 2016, fiscal year 2015 information may be sed if the administrator has at least 6 continos months of fiscal year 2015 information to report.) Registration, Origination, or Special Filings Additional filings are necessary when a MEWA or ECE experiences certain events, beginning on or after Jly 1, A MEWA mst file a Form M-1 prsant to of the Department s reglations when any of the following registration events occr: (1) The MEWA first begins operating with regard to the employees of two or more employers (inclding one or more self-employed individals); (2) The MEWA begins knowingly operating in any additional State; (3) The MEWA begins operating following a merger with another MEWA; (4) The nmber of employees receiving coverage for medical care nder the MEWA is at least 50 percent greater than the nmber of sch employees on the last day of the previos calendar year; or (5) The MEWA experiences a material change as defined by these instrctions. Event 1 reqires a registration filing 30 days prior to the event, while events 2-5 reqire a registration filing within 30 days of the event occrring. A MEWA may be reqired to register more than once in a calendar year. A MEWA that is reqired to make a registration filing mst se the most recently pdated Form M-1 that is available to do so. (For example, a registration filing de by November 1, 2016 wold se the 2015 Form M-1.) An ECE mst file a Form M-1 prsant to of the Department s reglations when any of the following origination events occr: (1) The ECE first begins operating with regard to the employees of two or more employers (inclding one or more self-employed individals); (2) The ECE begins operating following a merger with another ECE (nless all of the ECEs that participate in the merger previosly were last originated at least three years prior to the merger); and, (3) The nmber of employees receiving coverage for medical care nder the ECE is at least 50 percent greater than the nmber of sch employees on the last day of the previos calendar year (nless the increase is de to a merger with another ECE nder which all ECEs that participate in the merger were last originated at least three years prior to the merger). Event 1 reqires an origination event filing 30 days prior to the event, while events 2 and 3 reqire a filing within 30 days of the event occrring. An ECE that is reqired to make an origination filing mst se the most recently pdated Form M-1 that is available to do so. (For example, an origination filing de by November 1, 2016 wold se the 2015 Form M-1.) An ECE mst also file a Form M-1 when any of the following special filing events occr within the three-year filing period following an origination event: (1) The ECE begins knowingly operating in any additional State; or (2) The ECE experiences a material change as defined by these instrctions. Special event filings are de within 30 days of the event occrring. An ECE may be reqired to file the Form M-1 more than once in a calendar year. An ECE that is reqired to make a special filing mst se the most recently pdated Form M-1 that is available to do so. (For example, a special filing de by November 1, 2016 wold se the 2015 Form M-1.) Page 3

9 Material Change If any of the cstodial or financial information reported on Part II of this Form M-1 changes, sch change is considered a material change and reqires the MEWA or ECE to sbmit a new Form M-1 filing. Note, ECEs mst only file when a material change occrs dring the threeyear filing period following an origination event. A material change will not restart the calclation of that period. Extensions of Time A one-time extension of time to file will atomatically be granted if the administrator of the MEWA or ECE reqests an extension. To reqest an extension, the administrator mst: (1) check box B(3) in Part I, and complete the rest of Part I as it applies to the MEWA or ECE; (2) complete boxes 1a-d, 2a-d, and 3a-c in Part II; (3) electronically sign, date, and provide the administrator s name at the end of the form; and (4) electronically file this reqest for extension no later than the normal de date for the Form M-1. In sch a case, the administrator will have an additional 60 days to file a completed Form M-1. A copy of this reqest for extension mst be attached to the completed Form M-1 when filed. Section 3: Electronic Filing How to File The Form M-1 mst be filed electronically with the Department of Labor by going to mewa. Yor entries mst be in the proper format in order for the electronic system to process yor filing. For example, if a qestion reqires yo to enter a nmerical accont nmber, yo cannot enter a word. To redce the possibility of correspondence and penalties: Complete all lines on the Form M-1 nless otherwise specified. Do not enter N/A or Not Applicable on the Form M-1 nless specifically permitted. Yes or No qestions on the Form M-1 cannot be left blank, nless specifically permitted. Answer either Yes or No, bt not both. Do not enter social secrity nmbers in response to qestions asking for an employer identification nmber (EIN). Becase of privacy concerns, the inclsion of a social secrity nmber on the Form M-1 or on an attachment that is open to pblic inspection may reslt in the rejection of the filing. Amended Report To correct errors and/or omissions on a previosly filed Form M-1, sbmit a completed Form M-1 indicating the filing is an amended report in Part I, Item B(2). Final Report If the administrator of a MEWA or ECE does not intend to file a Form M-1 next year, the filing shold be the final report. For example, if this is the third filing following an origination for an ECE, or if a MEWA has ceased operations, the administrator shold indicate this is the final report in Part I, Item B(1). Attaching Additional Pages If additional pages are necessary to provide the reqired information, attachments may be ploaded to yor electronic filing sing the Attachments tab. Instrctions are provided on the filing website. Penalties ERISA section 502(c)(5) and 29 CFR c-5 provides for a civil penalty for failre to file a Form M-1, failre to file a complete Form M-1, and late Form M-1 filings. In the event of no filing, an incomplete filing, or a late filing, a penalty may apply of p to $1,100 a day for each day that the administrator of the MEWA fails or refses to file a complete report (or a higher amont if adjsted prsant to the Federal Civil Penalties Inflation Adjstment Act of 1990, as amended by the Debt Collection Improvement Act of 1996). ERISA section 521(a) athorizes the Secretary of Labor to isse an ex parte cease and desist order if it appears to the Secretary that the alleged condct of a MEWA is fradlent, or creates an immediate danger to the pblic safety or welfare, or is casing or can reasonably be expected to case significant, imminent, and irreparable pblic injry. ERISA section 521(e) athorizes the Secretary to isse a smmary seizre order if it appears that a MEWA is in a financially hazardos condition. In addition, certain other penalties may apply. Signatre and Date For prposes of Title I of ERISA, the administrator is reqired to file the Form M-1. The administrator or, if the administrator is an entity, a person athorized to sign on behalf of the administrator mst electronically sign the Form M-1 and sbmit it to the electronic filing system. If the administrator does not electronically sign a filing, the filing stats will indicate that there is an error with yor filing. To obtain an electronic signatre, go to dol.gov/mewa and register as a signer. Yo will be provided with a User ID and Password. Both the User ID and Password are needed to sign the Form M-1. Electronic signatres on annal retrns/reports filed are governed by the applicable stattory and reglatory reqirements. The system will prevent the sbmission of any filing that does not inclde all reqired information. A completed filing will generate a receipt confirmation code. The administrator mst keep a copy of the receipt as well as any attachments on file as part of its records as reqired by section 107 of ERISA. Page 4

10 Note: Even after sbmission, yor filing may be sbject to frther, detailed review by DOL and may be deemed deficient based pon this review. See Penalties section. Detailed information on electronic filing is available at If yo have qestions abot sing or completing the Form M-1, please contact the Form M-1 Help Desk at SECTION 4: Line-by-Line Instrctions Important: Yes/No qestions mst be marked Yes or No, bt not both. N/A is not an acceptable response nless expressly permitted in the instrctions to that line. Note: For prposes of the Form M-1, an annal report is the annal filing made by all MEWAs by March 1 and for ECEs, the annal filing made by March 1 for the first three years after an origination. Part I Prpose of Filing Item A: Check the appropriate box indicating whether this filing is an annal report, registration, origination, or special filing. If it is an annal report, check the appropriate box indicating whether calendar year or fiscal year information is being sed to complete the form. If fiscal year information is being sed, specify the month, day and year corresponding to the information. If it is a registration, origination, or special filing, check the appropriate box (or boxes) indicating the reason (or reasons) for the filing. Item B: Check the appropriate box identifying if the report is a final report, an amended report, or a reqest for extension. If this is not an amended report, final report, or reqest for extension, skip to Item C. Item C: Check the appropriate box identifying whether the filing entity is a plan MEWA (a MEWA within the meaning of ERISA section 3(40) that is also an employee welfare benefit plan within the meaning of ERISA section 3(3)), a non-plan MEWA or an ECE. Item D: Enter the date of the most recent MEWA or ECE Form M-1 filing. Indicate in the check box if this is the MEWA or ECE s first time filing a Form M-1. Part II Cstodial & Financial Information Box 1a and 1b: Enter the name, address, and telephone nmber of the MEWA or ECE. Box 1c: Enter any EIN sed by the MEWA or ECE in reporting to the Department of Labor or the Internal Revene Service. An EIN is a nine-digit employer identification nmber (for example, ) that has been assigned by the IRS. Entities that do not have an EIN shold apply for one on Form SS-4, Application for Employer Identification Nmber, as soon as possible. Yo can obtain Form SS-4 by calling or at the IRS Web site at EBSA does NOT isse EINs. If the MEWA or ECE does not have any EINs associated with it, leave Box 1c blank. Box 1d: Enter any plan nmber sed by the MEWA or ECE. A plan nmber or PN is a three-digit nmber assigned to a plan or other entity by an employer or plan administrator. For plans or other entities providing welfare benefits, the first plan nmber shold be nmber 501 and additional plans shold be nmbered consectively. For MEWAs or ECEs that file a Form 5500 Annal Retrn/ Report of Employee Benefit Plan (Form 5500), the same PN shold be sed for the Form M-1. (For more information on the Form 5500 yo can access dol.gov or call toll-free at ) If the MEWA or ECE does not have any PNs associated with it, leave Box 1d blank. For Boxes 1c and 1d, list only EINs and PNs sed by the MEWA or ECE itself and not those sed by grop health plans or employers that prchase coverage throgh the MEWA or ECE. Box 2a and 2b: Enter the name, address, and telephone nmber of the administrator of the MEWA or ECE. The term administrator is defined in of the Department s reglations as: (1) The person specifically so designated by the terms of the instrment nder which the MEWA or ECE is operated; (2) If the MEWA or ECE is a grop health plan and the administrator is not so designated, the plan sponsor (as defined in section 3(16)(B) of ERISA); or (3) In the case of a MEWA or ECE for which an administrator is not designated and a plan sponsor cannot be identified, jointly and severally, the person or persons actally responsible (whether or not so designated nder the terms of the instrment nder which the MEWA or ECE is operated) for the control, disposition, or management of the cash or property received by or contribted to the MEWA or ECE, irrespective of whether sch control, disposition, or management is exercised directly by sch person or persons or indirectly throgh an agent, cstodian, or trstee designated by sch person or persons. Box 2c: Enter any EIN sed by the administrator in reporting to the Department of Labor or the Internal Revene Service. For this prpose, se only an EIN associated with the administrator as a separate entity. Do not se any EIN associated with the MEWA or ECE itself. Box 2d: Enter the address of the administrator of the MEWA or ECE. Boxes 3a throgh 3c: Enter the name, address, and telephone nmber of the entity or entities sponsoring the MEWA or ECE, and any EIN sed by the sponsor in reporting to the Department of Labor or the Internal Revene Service. For prposes of the Form M-1, the sponsor is either: (1) the plan sponsor as defined in ERISA section 3(16)(B) if the MEWA or ECE is a grop health plan; or (2) the entity that establishes or maintains the MEWA or ECE if the MEWA or ECE is not a grop health plan. Page 5

11 For this prpose, se only an EIN associated with the sponsor. Do not se any EIN associated with the MEWA or ECE itself. If the filing entity does not have a sponsor, leave Boxes 3a throgh 3c blank and skip to Box 4a. Boxes 4a throgh 4c: Enter the name, address, telephone nmber, and address of the agent for service of process or registered agent on behalf of the MEWA or ECE. An agent for service of process or registered agent is a person appointed by the MEWA or ECE to receive legal notices on behalf of the MEWA or ECE. Boxes 5a throgh 5c: Enter the name, address, telephone nmber, and address of each member of the Board of Directors, as well as each officer, trstee, or cstodian of the MEWA or ECE. Yo may attach additional pages if necessary to provide all reqired information on each board member. If the filing entity does not have a Board of Directors or officer, trstee or cstodian, leave Boxes 5a throgh 5c blank and skip to Box 6a. Boxes 6a throgh 6d: Enter the name, address, telephone nmber, and address of each promoter or agent responsible for marketing the MEWA or ECE, and any EIN sed by sch in reporting to the Department of Labor or the Internal Revene Service. For this prpose, se only an EIN associated with the promoter or agent. Do not se any EIN associated with the MEWA or ECE itself. If there is no sch promoter or agent, leave Boxes 6a throgh 6d blank and skip to Box 7a. Boxes 7a throgh 7b: Enter the name, address, and telephone nmber of each person, financial instittion(s), or other entity holding assets for the MEWA or ECE. Boxes 8a throgh 8c: Enter the name, address, telephone nmber, and address of each actary or actaries providing services to the MEWA or ECE. An actary is a professional who examines risk and is in charge of evalating the likelihood of ftre events. An actary shold be an associate or fellow of the Society of Actaries and a member of the American Academy of Actaries and be able to jdge the actarial sondness of the arrangement. Boxes 8a throgh 8c are mandatory if yo answer Yes to Box 13. Box 8d: Enter any EIN sed by the actary in reporting to the Department of Labor or the Internal Revene Service. For this prpose, se only an EIN associated with the actary. Do not se any EIN associated with the MEWA or ECE itself. If there is no actary, leave Boxes 8a throgh 8d blank and skip to Box 9a. Boxes 9a throgh 9d: Enter the name, address, telephone nmber, and address of each third party administrator (TPA) providing services to the MEWA or ECE, and any EIN sed by sch in reporting to the Department of Labor or the Internal Revene Service. For this prpose, se only an EIN associated with the TPA. Do not se any EIN associated with the MEWA or ECE itself. If there is no sch TPA, leave Boxes 9a throgh 9d blank and skip to Box 10a. Boxes 10a throgh 10d: Enter the name, address, telephone nmber, and address of each person or entity that has athority or control of the MEWA s or ECE s assets, or of assets paid by plans or employers to the MEWA or ECE, and any EIN sed by sch in reporting to the Department of Labor or the Internal Revene Service. For this prpose, se only an EIN associated with the person or entity. Do not se any EIN associated with the MEWA or ECE itself. Boxes 11a throgh 11d: Enter the name, address, telephone nmber, and address of each person or entity that has discretionary athority, control or responsibility with respect to the administration of the MEWA or ECE, and any EIN sed by sch in reporting to the Department of Labor or the Internal Revene Service. For this prpose, se only an EIN associated with the person or entity. Do not se any EIN associated with the MEWA or ECE itself. Boxes 12a throgh 12d: Enter the names, address, and telephone nmber of the MEWAs or ECEs who were involved in a merger with the filing entity, any EIN sed by sch entity (or entities) in reporting to the Department of Labor or Internal Revene Service, and any PN assigned to the plans or entities involved. If no merger has occrred, skip to Box 13. Boxes 13 throgh 16c: Answer yes or no to the qestions in this section. If yor response reqires additional explanation, identify the necessary information and attach pages as needed. Box 13: With respect to Box 13, check yes or no as applicable. For this prpose, only check yes if the opinion is in writing and crrent within the last year. If yo mark yes, yo mst also complete Boxes 8a throgh 8c. Boxes 14a and 14b: With respect to Boxes 14a and 14b, check yes or no as applicable. If yes, provide the name of the isser in the space provided. Box 15: With respect to Box 15, check yes or no as applicable. If yo answer no, inclde an explanation in the space provided or attach additional docments. Boxes 16a throgh 16c: With respect to Boxes 16a throgh 16c, check yes or no as applicable. If yo check yes to Box 16a, yo mst identify each proceeding and attach pages as needed to inclde (1) the case nmber, (2) the case date, (3) the natre of the proceedings, (4) the cort, (5) all parties (for example, plaintiffs and defendants or petitioners and respondents), and (6) the disposition. For this prpose, inclde only adits and investigations that reslt in corrective action. If yo check yes to Box 16b, provide additional explanation as appropriate. If yo check yes to Box 16c, list the issing entities and the year in which each order was issed. Page 6

12 Boxes 17a throgh 17j: Complete the chart with the information that is crrent as of the date of filing, except for an annal report, which mst reflect the information that is crrent as of the last day of the previos calendar year or fiscal year. See Annal Report paragraph in Section 2. When completing the chart, complete Box 17a first. Then for each row, complete Boxes 17b throgh 17j as it applies to the State listed in Box 17a. Box 17a. Enter all States in which the MEWA or ECE provides benefits for medical coverage. For this prpose, list the State(s) where the employers (of the employees receiving coverage) are domiciled. State means State within the meaning of 29 CFR Indicate if a State was not inclded on previos M-1 filings by checking the New State? Box. For example, consider MEWA A is located in State A and provides coverage to the employees of an Employer B located in State B. Employer B has employees located in State A, State B, and State C. In this example, MEWA A wold report State B in Box 17a. However, State A and State C wold not be listed becase it is not a State where an Employer with employees receiving coverage from a MEWA is domiciled. Box 17b. For each State listed in Box 17a, specify whether or not coverage is provided in that State. Box 17c. For each State listed in Box 17a, specify the State registration nmber for the MEWA or ECE. Box 17d. For each State listed in Box 17a, state the name of the agent or entity for service of process in that State. Box 17e. For each State listed in Box 17a, respond yes or no to whether the entity is licensed or otherwise athorized to operate as a health insrance isser in each State listed in that row. For more information on whether an entity that is a licensed or registered MEWA or ECE in a State meets the definition of a health insrance isser in that State, contact the State Insrance Department. Box 17f. For each yes answer in Box 17e, enter the National Association of Insrance Commissioners (NAIC) nmber. Box 17g. For each no answer in Box 17e, specify whether the MEWA or ECE is flly insred throgh one or more health insrance issers in each State. Box 17h. For each yes answer in Box 17g, enter the name of the insrer and its NAIC nmber (if available). If there is more than one insrer, enter all insrers and their NAIC nmbers (if available). Box 17i. In each State listed in Box 17a, specify whether the MEWA or ECE has prchased any stop-loss coverage. For this prpose, stop-loss coverage incldes any coverage defined by the State as stop-loss coverage. Stoploss coverage also incldes any financial reimbrsement instrment that is related to liability for the payment of health claims by the MEWA or ECE, inclding reinsrance and excess loss insrance. Box 17j. For each yes answer in Box 17i, enter the name of the stop-loss insrer and its NAIC nmber (if available). If there is more than one stop-loss insrer, enter all stop-loss insrers and their NAIC nmbers (if available). Box 18: Of the States identified in Box 17a, identify all States in which the MEWA or ECE condcted 20 percent or more of its bsiness (based on the nmber of participants receiving coverage for medical care nder the MEWA or ECE). For example, consider a MEWA that offers or provides coverage to the employees of six employers. Two employers are located in State X and 70 participants in the MEWA receive coverage throgh these two employers. Three employers are located in State Y and 30 participants in the MEWA receive coverage throgh these three employers. Finally, one employer is located in State Z and 200 participants in the MEWA receive coverage throgh this employer. In this example, the administrator of the MEWA shold specify State X and State Z nder Box 18 becase the MEWA condcts 23 1/3 percent of its bsiness in State X (70/300 = 23 1/3 percent) and 66 2/3 percent of its bsiness in State Z (200/300 = 66 2/3 percent). However, the administrator shold not specify State Y becase the MEWA condcts only 10 percent of its bsiness in State Y (30/300 = 10 percent). Complete Box 18 with information that is crrent as of the date of filing, except for an annal report, which may reflect the information that is crrent as of the last day of the previos calendar year or fiscal year. Box 19: Identify the total nmber of participants covered nder the MEWA or ECE. For more information on determining the nmber of participants, see the Department of Labor s reglations at 29 CFR (d). The description of participant in the instrctions below is only for prposes of this Box. An individal becomes a participant covered nder a MEWA or ECE on the earliest of: the date designated by the MEWA or ECE as the date on which the individal begins participation in the MEWA or ECE; the date on which the individal becomes eligible nder the MEWA or ECE for a benefit sbject only to occrrence of the contingency for which the benefit is provided; or the date on which the individal makes a contribtion to the MEWA or ECE, whether volntary or mandatory. See 29 CFR (d)(1). This incldes former employees who are receiving grop health contination coverage benefits prsant to Part 6 of ERISA and who are covered by the MEWA or ECE. Covered dependents are not conted as participants. A child who is an alternate recipient entitled to health benefits nder a qalified medical child spport order (QMCSO) shold not be conted as a participant. An individal is not a participant covered nder a MEWA or ECE on the earliest date on which the individal (a) is ineligible to receive any benefit nder the MEWA or ECE even if the contingency for which sch benefit is provided shold occr, and (b) is not designated by the MEWA or ECE as a participant. See 29 CFR (d)(2). If the report is a registration, origination, or special filing, complete this item with information that is crrent as of the date of the filing. Otherwise, complete this item with information that is crrent as of the last day of the year to be reported. (See Section 2 on Annal Report General Rle.) Page 7

13 Part III Information for Compliance with Part 7 of ERISA Backgrond Information on Part 7 of ERISA: The Health Insrance Portability and Accontability Act of 1996 (Pb. L ) (HIPAA) amended ERISA to provide for, among other things, improved portability and continity of health insrance coverage. The Mental Health Parity Act of 1996 (Pb. L , as amended by Pb. L and Pb. L ) (MHPA) amended ERISA to provide parity in the application of annal and lifetime dollar limits for certain mental health benefits with sch dollar limits on medical and srgical benefits. The Pal Wellstone and Pete Domenici Mental Health Parity and Addiction Eqity Act of 2008 (Pb. L ) (MHPAEA) amended ERISA by expanding the MHPA rles to provide benefits for sbstance se disorders, as well as added new rles for parity in financial reqirements and treatment limitations. The Newborns and Mothers Health Protection Act of 1996 (Pb. L ) (Newborns Act) amended ERISA to provide new protections for mothers and their newborn children with regard to the length of hospital stays in connection with childbirth. The Women s Health and Cancer Rights Act of 1998 (Pb. L ) (WHCRA) amended ERISA to provide individals new rights for reconstrctive srgery in connection with a mastectomy. The Genetic Information Nondiscrimination Act of 2008 (Pb. L ) (GINA) amended ERISA to prohibit the se of genetic information to adjst grop premims or contribtions, prohibit the collection of genetic information, and prohibit reqesting individals to ndergo genetic testing. Michelle s Law (Pb. L ) amended ERISA to prohibit grop health plans and issers from terminating coverage for a dependent child, whose enrollment in the plan reqires stdent stats at a postsecondary edcational instittion, if the stdent stats is lost as a reslt of a medically necessary leave of absence. The Patient Protection and Affordable Care Act (Pb. L ) (the Affordable Care Act) amended ERISA to provide a wide range of protections for participants of grop health plans. All of the foregoing provisions are set forth in part 7 of sbtitle B of title I of ERISA (part 7). The Department of Labor has pblished informal gidance in its pblication, Health Benefits Coverage Under Federal Law. This pblication provides assistance in nderstanding the HIPAA portability, HIPAA nondiscrimination, CHIPRA, GINA, WHCRA, and Newborns Act reqirements. Information on the Affordable Care Act is available on EBSA s website at Additionally, the website will be pdated when any new information or gidance relevant to part 7 of ERISA is made available. A Self-Compliance Tool, which may be sed to help assess an entity s compliance with part 7 of ERISA, is available at ebsa/healthlawschecksheets.html. This tool provides information gidance with respect to all the provisions listed above. General Information Regarding the Applicability of Part 7: In general, the foregoing provisions apply to grop health plans and health insrance issers in connection with a grop health plan. Many MEWAs and ECEs are grop health plans or health insrance issers. However, even if a MEWA or ECE is neither a grop health plan nor a health insrance isser, if the MEWA or ECE offers or provides benefits for medical care throgh one or more grop health plans, the coverage is reqired to comply with part 7 of ERISA and the MEWA or ECE is reqired to complete Boxes 20 throgh 21f. Part 7 of ERISA does not apply to any grop health plan or grop health insrance isser in relation to its provision of excepted benefits. Certain benefits that are generally not health coverage are excepted in all circmstances. These benefits are: coverage only for accidents (inclding accidental death and dismemberment), disability income insrance, liability insrance (inclding general liability insrance and atomobile liability insrance), coverage issed as a spplement to liability insrance, workers compensation or similar insrance, atomobile medical payment insrance, credit-only insrance (for example, mortgage insrance), and coverage for on-site medical clinics. Other benefits that generally are health coverage are excepted if certain conditions are met. Specifically, limited scope dental benefits, limited scope vision benefits, and long-term care benefits are excepted if they are provided nder a separate policy, certificate, or contract of insrance, or are otherwise not an integral part of the grop health plan. Benefits provided nder a health flexible spending arrangement may also qalify as excepted benefits if certain reqirements are met. For more information on limited excepted benefits, see the Department of Labor s reglations at 29 CFR (c)(3). In addition, noncoordinated benefits may be excepted benefits. The term noncoordinated benefits refers to coverage for a specified disease or illness (sch as cancer-only coverage) or hospital indemnity or other fixed dollar indemnity insrance (sch as insrance that pays $100/day for a hospital stay as its only insrance benefit), if three conditions are met. First, the benefits mst be provided nder a separate policy, certificate, or contract of insrance. Second, there can be no coordination between the provision of these benefits and an exclsion of benefits nder a grop health plan maintained by the same plan sponsor. Third, benefits mst be paid withot regard to whether benefits are provided with respect to the same event nder a grop health plan maintained by the same plan sponsor. For more information on these noncoordinated excepted benefits, see the Department of Labor s reglations at 29 CFR (c)(4). Finally, spplemental benefits may be excepted if certain conditions are met. Specifically, the benefits are excepted only if they are provided nder a separate policy, certificate or contract of insrance, and the benefits are Medicare spplemental (commonly known as Medigap or MedSpp ) policies, TRICARE spplements, or spplements to certain employer grop health plans. Sch spplemental coverage cannot dplicate primary coverage and mst be specifically designed to fill gaps in primary coverage, coinsrance, or dedctibles. For more information on spplemental excepted benefits, see the Department of Labor s Field Assistance Blletin Page 8

14 Note that retiree coverage nder a grop health plan that coordinates with Medicare may serve a spplemental fnction similar to that of a Medigap policy. However, sch employer-provided retiree wrap arond benefits are not excepted benefits (becase they are expressly exclded from the definition of a Medicare spplemental policy in section 1882(g)(1) of the Social Secrity Act). For more information on spplemental excepted benefits, see the Department of Labor s reglations at 29 CFR (c)(5). Relation to Other Laws: States may, nder certain circmstances, impose stricter laws with respect to health insrance issers. Generally, qestions concerning State laws shold be directed to that State s Insrance Department. For More Information: Gidance material and additional compliance assistance information that may be helpfl in nderstanding the reqirements listed above is available in pblications, fact sheets, and freqently asked qestions available on EBSA s website at Interested persons may also call and speak to a benefits advisor abot these laws sing the EBSA toll-free hotline at Box 20: With respect to Box 20, check yes or no as applicable. Check yes if yo answered yes in Box 16a and sch litigation or enforcement proceeding was related to a provision nder part 7 of ERISA. Box 21: In general, if yo are the administrator of a MEWA or ECE that is a grop health plan or health insrance isser or a MEWA or ECE that provides benefits for medical care to employees throgh one or more grop health plans, yo mst answer yes to Box 21 and then proceed to Boxes 21a-21f. For prposes of determining if a MEWA or ECE is in compliance with these provisions, the administrator shold check the relevant stattory provisions implementing reglations. In addition, the Self-Compliance Tool at healthlawschecksheets.html may be helpfl in answering Boxes 21a throgh 21f. For MEWAs or ECEs who are not yet providing benefits and so are nable to evalate their compliance with part 7 as of the date the Form M-1 is filed, check no and proceed to the signatre. Box 21a: The HIPAA portability reqirements added sections 701, 702, and 703 of ERISA. Title I of GINA amended section 702 of ERISA. General Applicability. In general, yo mst answer yes or no to this qestion if yo are the administrator of a MEWA or ECE that is a grop health plan or health insrance isser or a MEWA or ECE that provides benefits for medical care to employees throgh one or more grop health plans. Exceptions. Yo may answer N/A if either of the following paragraphs apply: (1) The MEWA or ECE is a small health plan (as described in section 732(a) of ERISA and (b) of the Department s reglations) (2) The MEWA or ECE offers coverage only to small grop health plans (as described in section 732(a) of ERISA and (b) of the Department s reglations). Box 21b: MHPA added section 712 of ERISA. MHPAEA amended section 712 of ERISA. General Applicability. In general, yo mst answer yes or no to this qestion if yo are the administrator of a MEWA or ECE that is a grop health plan or health insrance isser or a MEWA or ECE that provides benefits for medical care to employees throgh one or more grop health plans. Exceptions. Yo may answer N/A if any of the following paragraphs apply: (1) The MEWA or ECE is a small grop health plan (as described in section 732(a) of ERISA and (b) of the Department s reglations). (2) The MEWA or ECE offers coverage only to small grop health plans (as described in section 732(a) of ERISA and (b) of the Department s reglations). (3) The MEWA or ECE does not provide both medical/ srgical benefits and mental health benefits. (4) The MEWA or ECE offers or provides coverage only to small employers (as described in the small employer exemption contained in section 712(c)(1) of ERISA and (e) of the Department s reglations). (5) The coverage has satisfied the reqirements for the increased cost exemption (described in section 712(c) of ERISA and (f) of the Department s reglations). Box 21c: The Newborns Act added section 711 of ERISA. General Applicability. In general, yo mst answer yes or no to this qestion if yo are the administrator of a MEWA or ECE that is a grop health plan or health insrance isser or a MEWA or ECE that provides benefits for medical care to employees throgh one or more grop health plans. Exceptions. Yo may answer N/A if either of the following paragraphs apply: (1) The MEWA or ECE does not provide benefits for hospital lengths of stay in connection with childbirth. (2) The MEWA or ECE is sbject to State law reglating sch coverage, instead of the Federal Newborns Act reqirements, in all States identified in Box 17a, in accordance with section 711(f) of ERISA and (e) of the Department s reglations. Box 21d: WHCRA added section 713 of ERISA. General Applicability. In general, yo mst answer yes or no to this qestion if yo are the administrator of a MEWA or ECE that is a grop health plan or health insrance isser or a MEWA or ECE that provides benefits for medical care to employees throgh one or more grop health plans. Exceptions. Yo may answer N/A if any of the following paragraphs apply: (1) The MEWA or ECE is a small health plan (as described in section 732(a) of ERISA and (b) of the Department s reglations). (2) The MEWA or ECE offers coverage only to small grop health plans (as described in section 732(a) of ERISA and (b) of the Department s reglations). (3) The MEWA or ECE does not provide medical/ srgical benefits with respect to a mastectomy. Page 9

15 Box 21e: Michelle s Law added section 714 of ERISA. General Applicability. In general, yo mst answer yes or no to this qestion if yo are the administrator of a MEWA or ECE that is a grop health plan or health insrance isser or a MEWA or ECE that provides benefits for medical care to employees throgh one or more grop health plans. Exceptions. Yo may answer N/A if any of the following paragraphs apply: (1) The MEWA or ECE is a small health plan (as described in section 732(a) of ERISA and (b) of the Department s reglations). (2) The MEWA or ECE offers coverage only to small grop health plans (as described in section 732(a) of ERISA and (b) of the Department s reglations). (3) The MEWA or ECE does not provide coverage to dependents. Box 21f: The Affordable Care Act amends section 715 of ERISA to incorporate, by reference, changes to the PHS Act. General Applicability. In general, yo mst answer yes or no to this qestion if yo are the administrator of a MEWA or ECE that is a grop health plan or health insrance isser or a MEWA or ECE that provides benefits for medical care to employees throgh one or more grop health plans. Exceptions. Yo may answer N/A if any of the following paragraphs apply: (1) The MEWA or ECE is a small health plan (as described in section 732(a) of ERISA and (b) of the Department s reglations). (2) The MEWA or ECE offers coverage only to small grop health plans (as described in section 732(a) of ERISA and (b) of the Department s reglations). Paperwork Redction Act Notice We ask for the information on this form to carry ot the law as specified in ERISA. Yo are reqired to give s the information. We need it to determine whether the MEWA is operating according to law. Yo are not reqired to respond to this collection of information nless it displays a crrent, valid OMB control nmber. The average time needed to complete and file the form is estimated below. These times will vary depending on individal circmstances. Learning abot the law or the form: 2 hrs. Preparing the form: 1 hr. and 20 min. - 2 hrs. and 35 min. Please send comments regarding the brden estimate or any other aspect of this collection of information, inclding sggestions for redcing this brden, to the U.S. Department of Labor, Office of Policy and Research, Attention: PRA Official, 200 Constittion Avene, N.W., Room N-5711, Washington, DC and reference OMB Control Nmber Page 10

16 Self-Compliance Tool for Part 7 of ERISA: Health Care-Related Provisions INTRODUCTION This self-compliance tool is intended to help grop health plans, plan sponsors, plan administrators, health insrance issers, and other parties determine whether a grop health plan is in compliance with some of the provisions of Part 7 of ERISA. The reqirements described in this Part 7 tool generally apply to grop health plans and grop health insrance issers. However, references in this tool generally are limited to grop health plans or plans for convenience. In addition, these provisions generally do not apply to retiree-only or excepted benefits plans (See 29 CFR ). This self-compliance tool is not meant to be considered legal advice. Rather, it is intended to give the ser a basic nderstanding of Part 7 of ERISA to better carry ot plan-related responsibilities. It provides a smmary of the statte, recent reglations and other gidance issed by the Department. In addition, some of the provisions discssed involve isses for which rles have not yet been finalized. Proposed rles, interim final rles, and transition periods generally are noted. Periodically check the Department of Labor s Website (dol.gov/ebsa) nder Laws & Reglations for pblication of final rles. Cmlative List of Self-Compliance Tool Qestions for Health Care-Related Stattes Added to Part 7 of ERISA I. Determining Compliance with the HIPAA Provisions in Part 7 of ERISA If yo answer No to any of the qestions below, the grop health plan is in violation of the HIPAA provisions in Part 7 of ERISA. YES NO N/A The Health Insrance Portability and Accontability Act (HIPAA) incldes provisions of Federal law governing health coverage portability, health information privacy, administrative simplification, medical savings acconts, and long-term care insrance. The Department of Labor is responsible for the law s portability and nondiscrimination reqirements. HIPAA s portability provisions affect grop health plan coverage in the following ways: Provide certain individals special enrollment rights in grop health coverage when specific events occr, e.g., birth of a child (regardless of any open season) (see SECTION A), and Prohibit discrimination in grop health plan eligibility, benefits, and premims based on specific health factors (see SECTIONS B-C). 1

17 While HIPAA previosly provided for limits with respect to preexisting condition exclsions, new protections nder the Affordable Care Act now prohibit the imposition of preexisting condition exclsions for plan years beginning on or after Janary 1, For plan years beginning on or after Janary 1, 2014, plans are no longer reqired to isse the general notice of preexisting condition exclsion or individal notice of period of preexisting condition exclsion. HIPAA certificates of creditable coverage mst be provided throgh the end of 2014 (December 31, 2014) so that individals who may need to offset a preexisting condition exclsion nder a non-calendar year plan wold still have access to a certificate of creditable coverage throgh the end of See 29 CFR , 5; 29 CFR (a). SECTION A Compliance with the Special Enrollment Provisions Grop health plans mst allow individals (who are otherwise eligible) to enroll pon certain specified events, regardless of any late enrollment provisions, if enrollment is reqested within 30 days (or 60 days in the case of the special enrollment rights added by the Children s Health Insrance Program Reathorization Act of 2009 (CHIPRA), discssed in Qestion 3) of the event. The plan mst provide for special enrollment, as follows: Qestion 1 Special enrollment pon loss of other coverage Does the plan provide fll special enrollment rights pon loss of other coverage?... A plan mst permit loss-of-coverage special enrollment pon: (1) loss of eligibility for grop health plan coverage or health insrance coverage; and (2) termination of employer contribtions toward grop health plan coverage. See ERISA section 701(f)(1); 29 CFR (a). When a crrent employee loses eligibility for coverage, the plan mst permit the employee and any dependents to special enroll. See 29 CFR (a)(2)(i). When a dependent of a crrent employee loses eligibility for coverage, the plan mst permit the dependent and the employee to special enroll. See 29 CFR (a)(2)(ii). Examples: Examples of reasons for loss of eligibility inclde: legal separation, divorce, death of an employee, termination or redction in the nmber of hors of employment - volntary or involntary (with or withot electing COBRA), exhastion of COBRA, redction in hors, aging ot nder other parent s coverage, or moving ot of an HMO s service area. Loss of eligibility for coverage does not inclde loss de to the individal s failre to pay premims or termination of coverage for case - sch as for frad. See 29 CFR (a) (3)(i). When employer contribtions toward an employee s or dependent s coverage terminates, the plan mst permit special enrollment, even if the employee or 2

18 dependent did not lose eligibility for coverage. See 29 CFR (a) (3)(ii). Plans mst allow an employee a period of at least 30 days to reqest enrollment. See 29 CFR (a)(4)(i). Coverage mst become effective no later than the first day of the first month following a completed reqest for enrollment. See 29 CFR (a)(4)(ii). Tip: Ensre that the plan permits special enrollment pon all of the loss of coverage events described above. Qestion 2 Dependent special enrollment Does the plan provide fll special enrollment rights to individals pon marriage, birth, adoption, and placement for adoption?... Plans mst generally permit crrent employees to enroll pon marriage and pon birth, adoption, or placement for adoption of a dependent child. See ERISA section 701(f)(2); 29 CFR (b)(2). Plans mst generally permit a participant s spose and new dependents to enroll pon marriage, birth, adoption, and placement for adoption. See ERISA section 701(f)(2); 29 CFR (b)(2). Plans mst allow an individal a period of at least 30 days to reqest enrollment. See 29 CFR (b)(3)(i). In the case of marriage, coverage mst become effective no later than the first day of the month following a completed reqest for enrollment. See 29 CFR (b)(3)(iii)(A). In the case of birth, adoption, or placement for adoption, coverage mst become effective as of the date of the birth, adoption, or placement for adoption. See 29 CFR (b)(3)(iii)(B). Tips: Remember to allow all eligible employees, sposes, and new dependents to enroll pon these events. Also, ensre that the effective date of coverage complies with HIPAA, keeping in mind that some effective dates of coverage are retroactive. Qestion 3 Special enrollment rights provided throgh CHIPRA Does the plan provide fll special enrollment rights as reqired nder CHIPRA?... Under the following conditions a grop health plan mst allow an employee or dependent (who is otherwise eligible) to enroll, regardless of any late enrollment provisions, if enrollment is reqested within 60 days: 3

19 When an employee or dependent s Medicaid or CHIP coverage is terminated. When an employee or dependent is covered nder a Medicaid plan nder title XIX of the Social Secrity Act or nder a State Children s Health Insrance Plan (CHIP) nder title XXI of the Social Secrity Act and coverage of the employee or dependent is terminated as a reslt of loss of eligibility, a grop health plan mst allow special enrollment. The employee or dependent mst reqest special enrollment within 60 days after the date of termination of Medicaid or CHIP coverage. See ERISA section 701(f)(3). Upon Eligibility for Employment Assistance nder Medicaid or CHIP. When an employee or dependent becomes eligible for premim assistance, with respect to coverage nder the grop health plan or health insrance coverage nder a Medicaid plan or State CHIP plan, the grop health plan mst allow special enrollment. The employee or dependent mst reqest special enrollment within 60 days after the employee or dependent is determined to be eligible for assistance. See ERISA section 701(f)(3). Note: In addition, employers that maintain a grop health plan in a state with a CHIP or Medicaid program that provides for premim assistance for grop health plan coverage mst provide a written notice (referred to as the Employer CHIP Notice) to each employee to inform them of possible opportnities available in the state in which they reside for premim assistance for health coverage of employees or dependents. A model notice is available at dol.gov/ebsa/newsroom/ fschip.html. Qestion 4 Treatment of special enrollees Does the plan treat special enrollees the same as individals who enroll when first eligible, for prposes of eligibility for benefit packages and premims? If an individal reqests enrollment while the individal is entitled to special enrollment, the individal is a special enrollee, even if the reqest for enrollment coincides with a late enrollment opportnity nder the plan. See 29 CFR (d)(1). Special enrollees mst be offered the same benefit packages available to similarly sitated individals who enroll when first eligible. (Any difference in benefits or cost-sharing reqirements for different individals constittes a different benefit package.) In addition, a special enrollee cannot be reqired to pay more for coverage than a similarly sitated individal who enrolls in the same coverage when first eligible. See 29 CFR (d)(2). Qestion 5 Notice of special enrollment rights Does the plan provide timely and adeqate notices of special enrollment rights?... On or before the time an employee is offered the opportnity to enroll in the plan, the plan mst provide the employee with a description of special enrollment rights. 4

20 Tip: Ensre that the special enrollment notice is provided at or before the time an employee is initially offered the opportnity to enroll in the plan. This may mean breaking it off from the SPD. The plan can inclde its special enrollment notice in the SPD if the SPD is provided at or before the initial enrollment opportnity (for example, as part of the application materials). If not, the special enrollment notice mst be provided separately to be timely. A model notice is provided in the Model Disclosres on page 138. SECTION B Compliance with the HIPAA Nondiscrimination Provisions Overview. HIPAA prohibits grop health plans and health insrance issers from discriminating against individals in eligibility and contined eligibility for benefits and in individal premim or contribtion rates based on health factors. These health factors inclde: health stats, medical condition (inclding both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, evidence of insrability (inclding conditions arising ot of acts of domestic violence and participation in activities sch as motorcycling, snowmobiling, all-terrain vehicle riding, horseback riding, skiing, and other similar activities), and disability. See ERISA section 702; 29 CFR Similarly Sitated Individals. It is important to recognize that the nondiscrimination rles prohibit discrimination within a grop of similarly sitated individals. Under 29 CFR (d), plans may treat distinct grops of similarly sitated individals differently, if the distinctions between or among the grops are not based on a health factor. If distingishing among grops of participants, plans and issers mst base distinctions on bona fide employment-based classifications consistent with the employer s sal bsiness practice. Whether an employment-based classification is bona fide is based on relevant facts and circmstances, sch as whether the employer ses the classification for prposes independent of qalification for health coverage. Bona fide employment-based classifications might inclde: fll-time verss part-time employee stats; different geographic location; membership in a collective bargaining nit; date of hire or length of service; or differing occpations. In addition, plans may treat participants and beneficiaries as two separate grops of similarly sitated individals. Plans may also distingish among beneficiaries. Distinctions among grops of beneficiaries may be based on bona fide employment-based classifications of the participant throgh whom the beneficiary is receiving coverage, relationship to the participant (sch as spose or dependent), marital stats, age of dependent children, or any other factor that is not a health factor. However, see section 2714 of the PHS Act, as amended by the Affordable Care Act and incorporated into section 715 of ERISA, for rles on defining dependents nder the plan. (For information regarding the Affordable Care Act, please visit or Website at dol.gov/ebsa/healthreform). Exception for benign discrimination: The nondiscrimination rles do not prohibit a plan from establishing more favorable rles for eligibility or premim rates for individals with an adverse health factor, sch as a disability. See 29 CFR (g). 5

21 Check to see that the plan complies with HIPAA s nondiscrimination provisions as follows: Qestion 6 Nondiscrimination in eligibility Does the plan allow individals eligibility and contined eligibility nder the plan regardless of any adverse health factor?... Examples of plan provisions that violate ERISA section 702(a) becase they discriminate in eligibility based on a health factor inclde: v Plan provisions that reqire evidence of insrability, sch as passing a physical exam, providing a certification of good health, or demonstrating good health throgh answers to a health care qestionnaire in order to enroll. See 29 CFR (b)(1). Also, note that it may be permissible for plans to reqire individals to complete physical exams or health care qestionnaires for prposes other than for determining eligibility to enroll in the plan, sch as for determining an appropriate blended, aggregate grop rate for providing coverage to the plan as a whole. See 29 CFR (b)(1)(iii) Example 1. Tip: Eliminate plan provisions that deny individals eligibility or contined eligibility nder the plan based on a health factor, even if sch provisions apply only to late enrollees. Qestion 7 Nondiscrimination in benefits Does the plan niformly provide benefits to participants and beneficiaries, withot directing any benefit restrictions at individal participants and beneficiaries based on a health factor?... Benefits provided mst be niformly available and any benefit restrictions mst be applied niformly to all similarly sitated individals and cannot be directed at any individal participants or beneficiaries based on a health factor. If benefit exclsions or limitations are applied only to certain individals based on a health factor, this wold violate ERISA section 702(a) and 29 CFR (b)(2). Examples of plan provisions that may be permissible nder ERISA section 702(a) inclde: v Limits or exclsions for certain types of treatments or drgs, v Limitations based on medical necessity or experimental treatment, and v Cost-sharing, if the limit applies niformly to all similarly sitated individals and is not directed at individal participants or beneficiaries based on a health factor. However, other provisions of law, sch as the Affordable Care Act, may prohibit some of these limitations (sch as PHS Act section 2713, reqiring plans and issers to provide coverage for, and not impose cost-sharing reqirements with 6

22 respect to, certain recommended preventive services. (For information regarding the Affordable Care Act, please visit or Website at dol.gov/ebsa/healthreform). Qestion 8 Sorce-of-injry restrictions If the plan imposes a sorce-of-injry restriction, does it comply with the HIPAA nondiscrimination provisions?... Plans may exclde benefits for the treatment of certain injries based on the sorce of that injry, except that plans may not exclde benefits otherwise provided for treatment of an injry if the injry reslts from an act of domestic violence or a medical condition. See 29 CFR (b)(2)(iii). An example of a permissible sorce-of-injry exclsion wold inclde: v A plan provision that provides benefits for head injries generally, bt excldes benefits for head injries sstained while participating in bngee jmping. An impermissible sorce-of-injry exclsion wold inclde: v A plan provision that generally provides coverage for medical/srgical benefits, inclding hospital stays that are medically necessary, bt excldes benefits for self-inflicted injries or attempted sicide. This is impermissible becase the plan provision excldes benefits for treatment of injries that may reslt from a medical condition (depression). If the plan does not impose a sorce-of-injry restriction, check N/A and skip to Qestion 9. Qestion 9 Nondiscrimination in premims or contribtions Does the plan comply with HIPAA s nondiscrimination rles regarding individal premim or contribtion rates?... Under ERISA section 702(b) and 29 CFR (c), plans may not reqire an individal to pay a premim or contribtion that is greater than a premim or contribtion for a similarly sitated individal enrolled in the plan on the basis of any health factor. For example, it wold be impermissible for a plan to reqire certain fll-time employees to pay a higher premim than other fll-time employees based on their prior claims experience. Nonetheless, the nondiscrimination rles do not prohibit a plan from providing a reward based on adherence to a wellness program. See ERISA section 702(b)(2)(B); PHS Act section Final rles for wellness programs were pblished on Jne 6, 2013 at 29 CFR and 29 CFR (These rles were issed throgh athority nder the Affordable Care Act (PHS section 2705) and nder the HIPAA nondiscrimination provisions. These rles apply to both grandfathered and nongrandfathered grop health plans.) 7

23 To help evalate whether this exception is available, refer to SECTION C on page 70. Once yo have completed SECTION C, retrn to this page to contine with Qestion 10, below. Qestion 10 List billing Is there compliance with the list billing provisions?... Under 29 CFR (c)(2)(ii), plans and issers may not charge or qote an employer a different premim for an individal in a grop of similarly sitated individals based on a health factor. This practice is commonly referred to as list billing. If an isser is list billing an employer and the plan is passing the separate and different rates on to the individal participants and beneficiaries, both the plan and the isser are violating the prohibition against discrimination in premim rates. This does not prevent plans and issers from taking the health factors of each individal into accont in establishing a blended/aggregate rate for providing coverage to the plan. Note: Plans and issers are not permitted to adjst premim or contribtion rates based on genetic information of one or more individals in the grop. For more information on discrimination based on genetic information, refer to SECTION V. Note also that, nder the Affordable Care Act, certain premim rating reqirements apply to health insrance coverage in the small grop market. Visit HealthCare.gov for more information. Qestion 11 Nonconfinement clases Is the plan free of any nonconfinement clases?... Typically, a nonconfinement clase will deny or delay eligibility for some or all benefits if an individal is confined to a hospital or other health care instittion. Sometimes nonconfinement clases also deny or delay eligibility if an individal cannot perform ordinary life activities. Often a nonconfinement clase is imposed only with respect to dependents, bt they sometimes are also imposed with respect to employees. 29 CFR (e) (1) explains that these nonconfinement clases violate ERISA sections 702(a) (if the clase delays or denies eligibility) and 702(b) (if the clase raises individal premims). Tip: Delete all nonconfinement clases. Qestion 12 Actively-at-work clases Is the plan free of any impermissible actively-at-work clases?... Typically, actively-at-work provisions delay eligibility for benefits based on an individal being absent from work. 29 CFR (e)(2) explains that actively-at-work provisions generally violate ERISA sections 702(a) (if the clase delays or denies eligibility) and 702(b) (if the clase raises individal premims or contribtions), nless absence from work de to a health factor is treated, for prposes of the plan, as if the individal is at work. 8

24 Nonetheless, an exception provides that a plan may establish a rle for eligibility that reqires an individal to begin work for the employer sponsoring the plan before eligibility commences. Frther, plans may establish rles for eligibility or set any individal s premim or contribtion rate in accordance with the rles relating to similarly sitated individals in 29 CFR (d). For example, a plan that treats fll-time and parttime employees differently for other employment-based prposes, sch as eligibility for other employee benefits, may distingish in rles for eligibility nder the plan between fll-time and part-time employees. Tip: Careflly examine any actively-at-work provision to ensre consistency with HIPAA. SECTION C Compliance with the Wellness Program Provisions Use the following qestions to help determine whether the plan offers a program of health promotion or disease prevention that is reqired to comply with the Department s final wellness program reglations and, if so, whether the program is in compliance with the reglations. See final reglations issed by the Departments on Jne 6, 2013 at 29 CFR and 29 CFR These reglations se joint athority nder HIPAA and the ACA and apply for plan years beginning on or after Janary 1, 2014, however reglations nder HIPAA s nondiscrimination provisions relating to wellness programs were applicable for plan years prior to the applicability of these final wellness program rles. The reqirements relating to wellness programs apply to both grandfathered and non-grandfathered grop health plans (See frther discssion of grandfather stats nder the ACA section VII, A of this tool). Qestion 13 Does the plan have a wellness program?... A wide range of wellness programs exist to promote health and prevent disease. However, these programs are not always labeled wellness programs. Examples inclde: a program that redces individals costsharing for complying with a preventive care plan; a diagnostic testing program for health problems; and rewards for attending edcational classes, following healthy lifestyle recommendations, or meeting certain biometric targets (sch as weight, cholesterol, nicotine se, or blood pressre targets). Tip: Ignore the labels wellness programs can be called many things. Other common names inclde: disease management programs, smoking cessation programs, and case management programs. Qestion 14 Is the wellness program part of a grop health plan?... The wellness program is only sbject to Part 7 of ERISA if it is part of a grop health plan. If the employer operates the wellness program separate from the grop health plan, the program may be reglated by other laws, bt it is not sbject to the grop health plan rles discssed here. 9

25 Example: An employer instittes a policy that any employee who smokes will be fired. Here, the anti-smoking policy is not part of the grop health plan, so the wellness program rles do not apply. (Bt see 29 CFR , which clarifies that compliance with the HIPAA nondiscrimination rles, inclding the wellness program rles, is not determinative of compliance with any other provision of ERISA or any other State or Federal law, sch as the Americans with Disabilities Act.) Qestion 15 Does the program discriminate based on a health factor (i.e., is it a health-contingent program)?... A program discriminates based on a health factor if it reqires an individal to meet a standard related to a health factor in order to obtain a reward (or reqires an individal to ndertake more than a similarly sitated individal based on a health factor in order to obtain the same reward). A reward can be in the form of a discont or rebate of a premim or contribtion, a waiver of all or part of a cost-sharing mechanism (sch as dedctibles, copayments, or coinsrance), an additional benefit, or any other financial or other incentive. A reward can also be the avoidance of a penalty (sch as the absence of a srcharge, or other financial or nonfinancial disincentive). If none of the conditions for obtaining a reward is based on an individal satisfying a standard that is related to a health factor (or if a wellness program does not provide a reward), the wellness program is a participatory wellness program. See 29 CFR (f)(1)(ii). Example 1: Plan participants who have a cholesterol level nder 200 will receive a premim redction of 30 percent. In this Example 1, the plan reqires individals to meet a standard related to a health factor in order to obtain a reward. Example 2: A plan reqires all eligible employees to complete a health risk assessment to enroll in the plan. Employee answers are fed into a compter that identifies risk factors and sends edcational information to the employee s home address. In this Example 2, the reqirement to complete the assessment does not, itself, discriminate based on a health factor. However, if the plan sed individals specific health information to discriminate in individal eligibility, benefits, or premims, there wold be discrimination based on a health factor. Tip: Participatory wellness programs are permissible, provided the program is made available to all similarly sitated individals, regardless of health stats. If yo answered No to ANY of the above qestions 13-15, STOP. The plan is not sbject to the HIPAA wellness rles. If yo are completing this section as part of a review of yor plan, please contine to SECTION D. 10

26 Qestion 16 If the program discriminates based on a health factor, is the program saved by the benign discrimination provisions?... The Department s reglations at 29 CFR (g) permit discrimination in favor of an individal based on a health factor. Example: A plan grants participants who have diabetes a waiver of the plan s annal dedctible if they enroll in a disease management program that consists of attending edcational classes and following their doctor s recommendations regarding exercise and medication. This is benign discrimination becase the program is offering a reward to individals based on an adverse health factor. Tip: The benign discrimination exception is NOT available if the plan asks diabetics to meet a standard related to a health factor (sch as maintaining a certain body mass index (BMI)) in order to get a reward. In this case, an intervening discrimination is introdced and the plan cannot rely solely on the benign discrimination exception. If yo answered Yes to this qestion, STOP. There does not appear to be a violation of the wellness program rles. If yo are completing this section as part of a review of yor plan, please contine to SECTION D. If yo answered No to this qestion, proceed to Qestions 17 and 18. The health-contingent wellness program mst meet the 5 criteria. Qestion 17 Within the health-contingent wellness program category, is the program an activity-only program?... An activity-only wellness program is a type of health-contingent wellness program that reqires an individal to perform or complete an activity related to a health factor in order to obtain a reward bt does not reqire the individal to attain or maintain a specific health otcome. See 29 CFR (f)(1)(iv). v Examples inclde walking, diet or exercise programs. If yo answered Yes to this qestion, proceed to Qestion 19. If yo answered No to this qestion, proceed to Qestion 18. Qestion 18 Within the health-contingent wellness program category, is the program an otcome-based program?... An otcome-based wellness program is a type of health-contingent wellness program that reqires an individal to attain or maintain a specific health otcome (sch as not smoking or attaining certain reslts on biometric screenings) in order to obtain a reward. See 29 CFR (f)(1)(iv). 11

27 Qestion 19 Is the health-contingent program in compliance with the five reqirements?... A. Is the amont of the reward offered nder the plan limited to 30 percent (or 50 percent for programs designed to prevent or redce tobacco se) of the applicable cost of coverage? (29 CFR (f)(3)(ii) and 29 CFR (f)(4)(ii))... If only employees are eligible to participate, the amont of the reward mst not exceed 30 percent (or 50 percent) of the cost of employee-only coverage nder the plan. If employees and any class of dependents are eligible to participate, the reward mst not exceed 30 percent of the cost of coverage in which an employee and any dependents are enrolled. The 30 percent (or 50 percent) limitation on the amont of the reward applies to all of a plan s wellness programs that reqire individals to meet a standard related to a health factor. Example: If the plan has two wellness programs with standards related to a health factor, a 20 percent reward for meeting a BMI target and a 10 percent reward for meeting a cholesterol target, it wold meet the maximm limit on the total reward available, which is 30 percent. If instead, the program offered a 20 percent reward for meeting a body mass index target, a 10 percent reward for meeting a cholesterol target, and a 10 percent reward for completing a health risk assessment (regardless of any individal s specific health information), the rewards wold not need to be adjsted becase the 10 percent reward for completing the health risk assessment does not reqire individals to meet a standard related to a health factor. B. Is the plan reasonably designed to promote health or prevent disease? (29 CFR (f)(2)(iii) and 29 CFR (f)(4)(iii))... The program mst be reasonably designed to promote health or prevent disease. The program shold have a reasonable chance of improving the health of or preventing disease in participating individals, not be overly brdensome, not be a sbterfge for discriminating based on a health factor, and not be highly sspect in the method chosen to promote health or prevent disease. This determination is based on all the relevant facts and circmstances. C. Are individals who are eligible to participate given a chance to qalify at least once per year? (29 CFR (f)(3)(i) and 29 CFR (f) (4)(i))... 12

28 D. Is the reward available to all similarly sitated individals? Does the program offer a reasonable alternative standard? (29 CFR (f) (3)(iv) and 29 CFR (f)(4)(iv))... The wellness program rles reqire that the reward be available to all similarly sitated individals. A component of meeting this criterion is that the program mst have a reasonable alternative standard (or waiver of the otherwise applicable standard) that is frnished by the plan pon a participant s reqest. Activity-only programs A reasonable alternative standard mst be available for obtaining the reward for any individal for whom, for that period, it is nreasonably difficlt de to a medical condition to satisfy the otherwise applicable standard or medically inadvisable to attempt to satisfy the otherwise applicable standard. See 29 CFR (f)(3)(iv)(A)(1) If reasonable nder the circmstances, a plan or isser may seek verification, sch as a statement from an individal s personal physician, that a health factor makes it nreasonably difficlt for the individal to satisfy, or medically inadvisable for the individal to attempt to satisfy, the otherwise applicable standard. See 29 CFR (f)(3)(iv)(A)(2) Otcome-based wellness programs The reasonable alternative standard mst be available to any individal who does not meet the initial standard based on the measrement, test, or screening. See 29 CFR (f)(4)(iv)(A) Plans may not seek verification, sch as a statement from an individal s personal physician, that a health factor makes it nreasonably difficlt for the individal to satisfy, or medically inadvisable for the individal to attempt to satisfy the standard. See 29 CFR (f)(4)(iv)(E) E. Does the plan disclose the availability of a reasonable alternative standard in all plan materials describing the program? (29 CFR (f)(3)(v))... The plan or isser mst disclose the availability of a reasonable alternative standard in all plan materials describing the program and in any disclosre that an individal did not satisfy an initial otcome-based standard. If plan materials merely mention that the program is available, withot describing its terms, this disclosre is not reqired. Tip: The disclosre does not have to say what the reasonable alternative standard is in advance. The plan can individally tailor the standard for each individal, on a case-by-case basis. 13

29 The following sample langage can be sed to satisfy this reqirement: If it is nreasonably difficlt de to a medical condition for yo to achieve the standards for the reward nder this program, or if it is medically inadvisable for yo to attempt to achieve the standards for the reward nder this program, call s at [insert telephone nmber] and we will work with yo to develop another way to qalify for the reward. Note: This section highlights the five reqirements for a health-contingent program and briefly describes the separate reqirements for an activity-only program and an otcome-based program. For more information on the five reqirements and differences between the activity-only and otcome-based programs, please visit or Website at dol.gov/ebsa/healthreform. Taking into consideration whether the health-contingent wellness program is activity-only or otcome-based: If yo answered Yes to all of the 5 qestions on wellness program criteria, there does not appear to be a violation of the HIPAA wellness program rles. If yo answered No to any of the 5 qestions on wellness program criteria, the plan has a wellness program compliance isse. Specifically, Violation of the general benefit discrimination rle (29 CFR (b)(2)(i), 29 CFR (a)) If the wellness program varies benefits, inclding cost-sharing mechanisms (sch as dedctible, copayment, or coinsrance) based on whether an individal meets a standard related to a health factor and the program does not satisfy the reqirements of 29 CFR (f), the plan is impermissibly discriminating in benefits based on a health factor. The wellness program exception at 29 CFR (b)(2)(ii) is not satisfied and the plan is in violation of 29 CFR (b)(2)(i) and 29 CFR (a). Violation of general premim discrimination rle (29 CFR (c)(1), 29 CFR (a)) If the wellness program varies the amont of premim or contribtion it reqires similarly sitated individals to pay based on whether an individal meets a standard related to a health factor and the program does not satisfy the reqirements of 29 CFR (f), the plan is impermissibly discriminating in premims based on a health factor. The wellness program exception at 29 CFR (c)(3) is not satisfied and the plan is in violation of 29 CFR (c)(1) and 29 CFR (a). 14

30 SECTION D Compliance with the MEWA or Mltiemployer Plan Garanteed Renewability Provisions If the plan is a mltiple employer welfare arrangement (MEWA) or a mltiemployer plan, it is reqired to provide garanteed renewability of coverage in accordance with ERISA section 703. If the plan is a MEWA or mltiemployer plan, it mst meet the criteria described in Qestion 20. If the plan is not a MEWA or mltiemployer plan, check N/A and go to Part II of this self-compliance tool.... Qestion 20 Mltiemployer plan and MEWA garanteed renewability If the plan is a mltiemployer plan, or a MEWA, does the plan provide garanteed renewability?... Grop health plans that are mltiemployer plans or MEWAs may not deny an employer contined access to the same or different coverage, other than: v For nonpayment of contribtions; v For frad or other intentional misrepresentation by the employer; v For noncompliance with material plan provisions; v Becase the plan is ceasing to offer coverage in a geographic area; v In the case of a plan that offers benefits throgh a network plan, there is no longer any individal enrolled throgh the employer who lives, resides, or works in the service area of the network plan and the plan applies this paragraph niformly withot regard to the claims experience of employers or any health-related factor in relation to sch individals or dependents; or v For failre to meet the terms of an applicable collective bargaining agreement, to renew a collective bargaining or other agreement reqiring or athorizing contribtions to the plan, or to employ employees covered by sch agreement. See ERISA section 703. **Note: The Pblic Health Service (PHS) Act contains garanteed renewability reqirements for issers. 15

31 II. Determining Compliance with the Mental Health Parity Act (MHPA) and Mental Health Parity and Addiction Eqity Act (MHPAEA) Provisions in Part 7 of ERISA (together, the mental health parity provisions) If yo answer No to any of the qestions below, the grop health plan is in violation of the mental health parity provisions in Part 7 of ERISA. Introdction If the plan provides either mental health or sbstance se disorder benefits, in addition to medical/srgical benefits, the plan may be sbject to the mental health parity provisions in Part 7 of ERISA. Retiree-only plans, and those offering excepted benefits, are generally not sbject to the mental health parity provisions nder part 7 of ERISA. See 29 CFR for frther discssion. (Note: if nder an arrangement(s) to provide medical care by an employer or employee organization, any participant or beneficiary can simltaneosly receive coverage for medical/srgical benefits and mental health or sbstance se disorder benefits, the mental health parity reqirements apply separately with respect to each combination of medical/srgical benefits and mental health/sbstance se disorder benefits and all sch combinations are considered to be a single grop health plan. See 29 CFR (e).) If this is the case, answer Qestions If the plan does not provide mental health or sbstance se disorder benefits, check N/A here and skip to Part III of this checklist. Also, the plan may be exempt from the mental health parity provisions nder the small employer (50 employees or fewer) exception or the increased cost exception. (To be eligible for the increased cost exception, the plan mst have filed a notice with EBSA and notified participants and beneficiaries.) Unless a plan is exempt as previosly described, the reqirements of MHPAEA generally apply to both grandfathered and non-grandfathered grop health plans 13, as defined nder the Affordable Care Act. Note that the Department of Health and Hman Services final rle regarding essential health benefits (EHB) reqires health insrance issers offering non-grandfathered health insrance coverage in the small grop market throgh an Affordable Health Insrance Exchange (Marketplace) or otside of a Marketplace to comply with MHPAEA in order to satisfy the reqirement to provide EHB. In addition, nder MHPAEA, if a plan or isser provides mental health or sbstance se disorder benefits in any classification described in the MHPAEA final reglation, mental health or sbstance se disorder benefits mst be provided in every classification in which medical/srgical benefits are provided. Under the Affordable Care Act, PHSA section 2713, non-grandfathered grop health plans are reqired to provide certain preventive services with no cost-sharing, which incldes, among YES NO N/A 13 Mental health and sbstance se disorder benefits are defined nder the terms of the plan, in accordance with applicable Federal and State law. Any condition or disorder defined by the plan as being or as not being a mental health condition or sbstance se disorder mst be defined in a manner consistent with generally recognized independent standards of crrent medical practice (e.g., the most crrent version of the DSM or ICD or State gidelines). 16

32 other things, alcohol misse screening and conseling, depression screening, and tobacco se screening. However, the Departments clarified that nothing in MHPAEA reqires a grop health plan that provides mental health or sbstance se disorder benefits only to the extent reqired nder PHSA section 2713, to provide additional mental health or sbstance se disorder benefits in any classification. 14 If the plan is exempt, check N/A here and skip to Part III of this checklist.... SECTION A. Lifetime and Annal Limits Qestion 21 Does the plan comply with the mental health parity reqirements regarding lifetime dollar limits on mental health/sbstance se disorder benefits?... A plan generally may not impose a lifetime dollar limit on mental health/ sbstance se disorder benefits that is lower than the lifetime dollar limit imposed on medical/ srgical benefits. See 29 CFR (b). (Only limits on what the plan wold pay are taken into accont, as contrasted with limits on what an individal may be charged.) Note: These provisions are affected by section 2711 of the Pblic Health Service Act, as amended by the Patient Protection and Affordable Care Act. Specifically, PHS Act section 2711 generally prohibits lifetime and annal dollar limits on essential health benefits (EHB), which incldes mental health and sbstance se disorder services. Accordingly, for mental health and sbstance se disorder benefits that are EHB, plans cannot impose lifetime limits. For mental health and sbstance se disorder benefits that are not EHB, parity reqirements regarding aggregate lifetime dollar limits apply. (For information regarding the Affordable Care Act, please visit or Website at dol.gov/ebsa/healthreform). Qestion 22 Does the plan comply with the mental health parity reqirements regarding annal dollar limits on mental health/sbstance se disorder benefits?... A plan generally may not impose an annal dollar limit on mental health/ sbstance se disorder benefits that is lower than the annal dollar limit imposed on medical/srgical benefits. See 29 CFR (b). (Again, only limits on what the plan wold pay are taken into accont, as contrasted with limits on what an individal may be charged.) Tip: There is a different rle for cmlative limits other than aggregate lifetime or annal dollar limits discssed later in this checklist at Qestion 26. A plan may impose annal ot-of-pocket dollar limits on participants and beneficiaries if done in accordance with the rle regarding cmlative limits. 14 See 29 CFR (e)(3)(i) 17

33 Note: These provisions are affected by section 2711 of the Pblic Health Service Act, as amended by the Patient Protection and Affordable Care Act. Specifically, PHS Act section 2711 generally prohibits annal dollar limits on essential health benefits, which incldes mental health and sbstance se disorder services. Accordingly, the parity reqirements regarding annal dollar limits only apply to the provision of mental health and sbstance se disorder benefits that are not Essential Health Benefits. Note also that for plan years beginning in 2015, the annal limitation on an individal s maximm ot-of-pocket (MOOP) costs in effect nder ACA is $6,600 for self-only coverage and $13,200 for coverage other than self-only coverage. See ACA Implementation FAQ Part XXI at dol.gov/ebsa/faqs/faq-aca21. html. (For information regarding the Affordable Care Act, please visit or Website at dol.gov/ebsa/healthreform). SECTION B. Financial Reqirements and Qantitative Treatment Limitations Qestion 23 Does the plan comply with the mental health parity reqirements for parity in financial reqirements and qantitative treatment limitations?... A plan may not impose a financial reqirement or qantitative treatment limitation applicable to mental health/sbstance se disorder benefits in any classification that is more restrictive than the predominant financial reqirement or qantitative treatment limitation of that type that is applied to sbstantially all medical/srgical benefits in the same classification. See 29 CFR (c)(2). v v Types of financial reqirements inclde dedctibles, copayments, coinsrance, and ot-of-pocket maximms. See 29 CFR (c)(1)(ii). Types of qantitative treatment limitations inclde annal, episode, and lifetime day and visit limits, for example, nmber of treatments, visits, or days of coverage. See 29 CFR (c)(1)(ii). The six classifications* of benefits are: 1) inpatient, in-network; 2) inpatient, ot-of-network; 3) otpatient, in-network; 4) otpatient, ot-of-network; 5) emergency care; and 6) prescription drgs. See 29 CFR (c)(2)(ii). Under the plan, any financial reqirement or qantitative treatment limitation that applies to mental health/sbstance se disorder benefits within a particlar classification cannot be more restrictive than the predominant reqirement or limitation that applies to sbstantially all medical/srgical benefits within the same classification. See 29 CFR (c)(2). *See page 81 for special rles related to classifications. 18

34 Detailed steps for applying these rles are set forth below: To determine compliance, each type of financial reqirement or qantitative treatment limitation within a coverage nit 15 mst be analyzed separately within each classification. See 29 CFR (c)(2)(i). If a plan applies different levels of a financial reqirement or qantitative treatment limitation to different coverage nits in a classification of medical/srgical benefits (for example, a $15 copayment for self-only and a $20 copayment for family coverage), the predominant level is determined separately for each coverage nit. See 29 CFR (c)(3)(ii). Step One: First determine if a particlar type of financial reqirement or qantitative treatment limitation applies to sbstantially all medical/srgical benefits in the relevant classification of benefits. v Generally, a financial reqirement or qantitative treatment limitation is considered to apply to sbstantially all medical/srgical benefits if it applies to at least two-thirds of the medical/srgical benefits in the classification. See 29 CFR (c)(3)(i)(A). This two-thirds calclation is generally based on the dollar amont of plan payments expected to be paid for the plan year. See 29 CFR (c)(3)(i)(C). (Any reasonable method can be sed for this calclation. See 29 CFR (c)(3)(i)(E).) Step Two: If the type of financial reqirement or qantitative treatment limitation applies to at least two-thirds of medical/srgical benefits in that classification, then determine the predominant level of that type of financial reqirement or qantitative treatment limitation that applies to medical/ srgical benefits sbject to that type of financial reqirement or qantitative treatment limitation in that classification of benefits. (Note: If the type of financial reqirement or qantitative treatment limitation does not apply to at least two-thirds of medical/srgical benefits in that classification, it cannot apply to mental health/sbstance se disorder benefits in that classification.) v Generally, the predominant level will apply to more than one-half of the medical/srgical benefits in that classification sbject to the financial reqirement or qantitative treatment limitation. See 29 CFR (c)(3)(i)(B)(1). If there is no single level that applies to more than one-half of medical/srgical benefits in the classification, the plan can combine levels ntil the combination of levels applies to more than one-half of medical/srgical benefits sbject to the financial reqirement or qantitative treatment limitation in the classification. The least restrictive level within the combination is considered the predominant level. 16 See 29 CFR (c)(3)(i)(B)(2). 15 Coverage nit refers to the way in which a plan grops individals for prposes of determining benefits, or premims or contribtions, for example, self-only, family, and employee pls spose. See 29 CFR (c)(1)(iv). 16 For a simpler method of compliance, a plan may treat the least restrictive level of financial reqirement or treatment limitation applied to medical/srgical benefits as predominant. 19

35 *Note: Special rles related to classifications 1. Special rle for otpatient sb-classifications: For prposes of determining parity for otpatient benefits (in-network and ot-of network), a plan or isser may divide its benefits frnished on an otpatient basis into two sb-classifications: (1) office visits and (2) all other otpatient items and services, for prposes of applying the financial reqirement and treatment limitation rles. After the sb-classifications are established, the plan or isser may not impose any financial reqirement or qantitative treatment limitation on mental health/sbstance se disorder benefits in any sb-classification (i.e., office visits or non-office visits) that is more restrictive than the predominant financial reqirement or treatment limitation that applies to sbstantially all medical/srgical benefits in the sb-classification sing the methodology set forth in the final rles. Other than as explicitly permitted nder the final rles, sb-classifications are not permitted when applying the financial reqirement and treatment limitation rles nder MHPAEA. Accordingly, separate sb-classifications for generalists and specialists are not permitted. (See Qestion 24 for more information regarding specialists and generalists.) 2. Special rle for prescription drg benefits: There is a special rle for mlti-tiered prescription drg benefits. A plan complies with the mental health parity provisions if the plan applies different levels of financial reqirements to different tiers of prescription drg benefits based on reasonable factors and withot regard to whether a drg is generally prescribed for medical/srgical or mental health/sbstance se disorder benefits. Reasonable factors inclde cost, efficacy, generic verss brand name, and mail order verss pharmacy pick-p. See 29 CFR (c)(3) (iii). 3. Special rle for mltiple network tiers: There is a special rle for mltiple network tiers. If a plan provides benefits throgh mltiple tiers of in-network providers (sch as in-network preferred and in-network participating providers), the plan may divide its benefits frnished on an in-network basis into sb-classifications that reflect network tiers, if the tiering is based on reasonable factors (sch as qality, performance, and market standards) and withot regard to whether a provider provides services with respect to medical/srgical benefits or mental health or sbstance se disorder benefits. After the sb-classifications are established, the plan or isser may not impose any financial reqirement or treatment limitation on mental health or sbstance se disorder benefits in any sb-classification that is more restrictive than the predominant financial reqirement or treatment limitation that applies to sbstantially all medical/ srgical benefits in the sb-classification. 20

36 Tips: Ensre that the plan does not impose cost-sharing reqirements or qantitative treatment limitations that are applicable only to mental health/ sbstance se disorder benefits. Ensre that with respect to condcting the predominant/sbstantially all test, the analysis mst be done with respect to the dollar amont of all plan payments expected to be paid for the relevant plan year. Basing the analysis on an insrer s entire overall book of bsiness for the year or book of bsiness in a specific region or State is not a permissible analysis for demonstrating compliance with MHPAEA. Qestion 24 If the plan imposes a higher, specialist financial reqirement, sch as a copay, on mental health/sbstance se disorder benefits, can the plan demonstrate that the specialist level of the financial reqirement is the predominant level that applies to sbstantially all medical/srgical benefits within the classification?... The six classifications otlined in Qestion 23 are the only classifications that may be sed when determining the predominant financial reqirements or qantitative treatment limitations that apply to sbstantially all medical/ srgical benefits. See 29 CFR (c)(2)(ii). A plan may not se a separate sb-classification nder these classifications for generalists and specialists. See preamble langage at 75 FR Tip: A plan may still be able to impose the specialist level of a financial reqirement or qantitative treatment limitation if it is the predominant level that applies to sbstantially all medical/srgical benefits within a classification. For example, if the specialist level of copay is the predominant level of copay that applies to sbstantially all medical/srgical benefits in the otpatient, in-network classification, the plan may apply the specialist level copay to mental health/ sbstance se disorder benefits in the otpatient, in-network classification. See 29 CFR (c)(3). SECTION C. Coverage in all Classifications Qestion 25 Does the plan comply with the mental health parity reqirements for coverage in all classifications?... If a plan provides mental health/sbstance se disorder benefits in any classification of benefits (the classifications are listed in Qestion 23), mental health/sbstance se disorder benefits mst be provided in every classification in which medical/srgical benefits are provided. See 29 CFR (c)(2)(ii)(A). v In determining the classification in which a particlar benefit belongs, a plan mst apply the same standards to medical/srgical benefits and to mental health/sbstance se disorder benefits. See 29 CFR (c) (2)(ii)(A). This rle also applies to intermediate services provided nder the plan or coverage. Plans mst assign covered intermediate mental health and sbstance se disorder benefits (sch as residential treatment, partial hospitalization and intensive otpatient treatment) to the 21

37 existing six classifications in the same way that they assign comparable intermediate medical/srgical benefits to these classifications. For example, if a plan classifies skilled nrsing and rehabilitation hospitals for medical/srgical benefits as inpatient benefits, it mst classify residential treatment facilities for mental health and sbstance se disorder benefits as inpatient benefits. If a plan treats home health care as an otpatient benefit, then any covered intensive otpatient mental health/sbstance se disorder services and partial hospitalization mst be considered otpatient benefits as well. A plan mst also comply with MHPAEA s NQTL rles, discssed in the following section, in assigning any benefits to a particlar classification. See 29 CFR (c)(4). Tips: If the plan does not contract with a network of providers, all benefits are otof-network. If a plan that has no network imposes a financial reqirement or treatment limitation on inpatient or otpatient benefits, the plan is imposing the reqirement or limitation within classifications (inpatient, ot-of-network or otpatient, ot-of-network), and the rles for parity will be applied separately for the different classifications. See 29 CFR (c)(2)(ii)(C), Example 1. If a plan covers the fll range of medical/srgical benefits (in all classifications, both in-network and ot-of-network), beware of exclsions on ot-of-network mental health and sbstance se disorder benefits. The plan mst ensre that all combinations of benefits comport with parity. Note: As explained in the Introdction to this section, nothing in MHPAEA reqires a non-grandfathered grop health plan that provides mental health or sbstance se disorder benefits only to the extent reqired nder PHSA section 2713, to provide additional mental health or sbstance se disorder benefits in any classification. SECTION D. Cmlative Financial Reqirements and Treatment Limitations Qestion 26 Does the plan comply with the mental health parity provisions on cmlative financial reqirements or cmlative qantitative treatment limitations?... A plan may not apply any cmlative financial reqirement or cmlative qantitative treatment limitation for mental health/sbstance se disorder benefits in a classification that accmlates separately from any established for medical/srgical benefits in the same classification. See 29 CFR (c)(3)(v). v Cmlative financial reqirements are financial reqirements that determine whether or to what extent benefits are provided based on accmlated amonts and inclde dedctibles and ot-of-pocket maximms (bt do not inclde aggregate lifetime or annal dollar limits becase these two terms are exclded from the meaning of financial 22

38 v reqirements). See 29 CFR (a). Cmlative qantitative treatment limitations are treatment limitations that determine whether or to what extent benefits are provided based on accmlated amonts, sch as annal or lifetime day or visit limits. See 29 CFR (a). For example, a plan may not impose an annal $250 dedctible on all medical/srgical benefits and a separate $250 dedctible on all mental health/ sbstance se disorder benefits. SECTION E. Nonqantitative Treatment Limitations Qestion 27 Does the plan comply with the mental health parity provisions for parity within nonqantitative treatment limitations?... Nonqantitative treatment limitations (NQTLs) inclde: v Medical management standards limiting or exclding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative; v Formlary design for prescription drgs; v For plans with mltiple network tiers (sch as preferred providers and participating providers), network tier design; v Standards for provider admission to participate in a network, inclding reimbrsement rates; v Plan methods for determining sal, cstomary, and reasonable charges; v Refsal to pay for higher-cost therapies ntil it can be shown that a lower-cost therapy is not effective (also known as fail-first policies or step therapy protocols); v Exclsions based on failre to complete a corse of treatment; and v Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or dration of benefits for services provided nder the plan or coverage. This is an illstrative, nonexhastive list. See 29 CFR (c)(4)(ii). General rles: A plan may not impose an NQTL with respect to mental health/sbstance se disorder benefits in any classification (sch as inpatient, ot-ofnetwork) nless, nder the terms of the plan (as written and in operation), any processes, strategies, evidentiary standards, or other factors sed in applying the NQTL to mental health/sbstance se disorder benefits in the classification are comparable to and applied no more stringently than the processes, strategies, evidentiary standards or other factors sed in applying the NQTL with respect to medical/srgical benefits in the classification. See 29 CFR (c)(4)(i). A grop health plan may consider a wide array of factors in designing medical management techniqes for both mental health/sbstance se disorder benefits and medical/srgical benefits, sch as cost of treatment; 23

39 high cost growth; variability in cost and qality; elasticity of demand; provider discretion in determining diagnosis, or type or length of treatment; clinical efficacy of any proposed treatment or service; licensing and accreditation of providers; and claim types with a high percentage of frad. Based on application of these or other factors in a comparable fashion, an NQTL, sch as prior athorization, may be reqired for some (bt not all) mental health/sbstance se disorder benefits, as well as for some medical/ srgical benefits, bt not for others. See 29 CFR (c)(4), Example 8. Examples: The Departments have pblished several examples that help illstrate how the MHPAEA reglations apply to some common plan NQTLs, inclding: 1) The penalty for failre to obtain preathorization is more pnitive with respect to mental health/sbstance se disorder benefits than with respect to medical/srgical benefits. See (c)(4)(iii), Example 3. 2) The plan ses an employee assistance program as a gatekeeper to obtaining mental health or sbstance se disorder benefits. See (c)(4)(iii), Example 6. 3) Utilization management practices that differ among different plan benefits. See 29 CFR (c)(4)(iii), Example 8. Tips: Do not focs on reslts. Look at the nderlying processes and strategies sed in applying NQTLs (sch as tilization review (UR) and standards for network admission). Are there arbitrary or discriminatory differences in how the plan is applying those processes and strategies to medical/ srgical benefits verss mental health/sbstance se disorder benefits? A plan or isser that limits eligibility for mental health and sbstance se disorder benefits ntil after benefits nder an EAP are exhasted has established an NQTL sbject to the parity reqirements. If no comparable reqirement applies to medical/srgical benefits sch a reqirement cold not be applied to mental health or sbstance se disorder benefits. Qestions Yo Might Ask: 1) What classification of benefits is being analyzed? Does the plan clearly define which benefits are treated as medical/srgical and which benefits are treated as mental health/sbstance se disorder nder the plan. Are benefits (sch as non-hospital inpatient and partial hospitalization) assigned to classifications sing a comparable methodology across medical/srgical benefits and mental health/sbstance se disorder benefits? 2) What is the type and description of any NQTL being applied and is it applied in parity? 3) Overall explanation of how each NQTL is applied with respect to medical/srgical benefits and mental health and sbstance se disorder benefits. (Note: this incldes reqirements that both the participant and provider may be sbject to prsant to the NQTL). If only certain benefits are sbject to an NQTL, sch as meeting a fail first protocol or reqiring preathorization, how were the specific medical/srgical and 24

40 mental health or sbstance se disorder benefits sbject to the NQTL determined? To the extent medical gidelines are relied pon, is there a process for determining variation/application of the gidelines that is comparable with respect to both medical/srgical and mental health or sbstance se disorder benefits? 4) Even if benefits are sbject to the same NQTL, does the plan impose stricter penalties for noncompliance with respect to mental health and sbstance se disorder benefits (for example, redcing benefits to 50% of eligible expenses for failre to obtain prior athorization for mental health and sbstance se disorder benefits, vs. 20% for medical/srgical benefits)? 5) If tilization review is condcted by different entities/individals for medical/srgical and mental health or sbstance se disorder benefits provided nder the plan, what processes are in place to ensre comparability in the standards sed for UR and comparability in the independence and qalifications of the individals performing UR? 6) Has the plan docmented its analysis that its NQTL processes and strategies (sch as UR) are comparable across medical/srgical and mental health/sbstance se disorder benefits? Tip: Plans shold keep records docmenting NQTL processes and how they are being applied to both medical/srgical as well as mental health and sbstance se disorder benefits to ensre they can demonstrate compliance with the law. Sch records may also be helpfl to plans in responding to inqiries from participants and beneficiaries regarding benefits nder the plan. See a more detailed discssion of disclosre reqirements in the following section. Illstrations. Set forth below are additional illstrations of how a plan may have differences in nonqantitative treatment limitations: NQTLs that may still comply with the Departments reglations, based on the facts and circmstances involved: Plan X covers neropsychological testing bt only for certain conditions. In sch sitations, look to see whether the exclsion is based on evidence addressing for example, clinical efficacy of sch testing for different conditions and the degree to which sch testing is sed for edcational prposes with regard to different conditions. Does the plan rely on criteria and evidence from comparable sorces with respect to medical/ srgical and mental health conditions? Does the plan have docmentation indicating the criteria sed and evidence spporting the plan s determination of the diagnoses for which they will cover this service and the rationale for exclding certain diagnoses? The reslt may be that the plan covers neropsychological testing for some medical/srgical or mental health conditions, bt not for all. This otcome may be permissible to the extent the plan has based the exclsion on clinical efficacy and/or other factors if done in a comparable manner and applies the NQTL in a comparable manner. 25

41 Plan Y ses diagnosis related grop (DRG) codes in their standard tilization review process to actively manage hospitalization tilization. For all non-drg hospitalizations (whether de to an nderlying medical/srgical condition or a mental health or sbstance se disorder condition), the plan reqires precertification for hospital admission and incremental concrrent review. The precertification and concrrent review processes review niqe clinical presentation, condition severity, expected corse of recovery, qality and efficiency. The evidentiary standards and other factors sed in the development of the concrrent review process are comparable across medical/srgical benefits and mental health/sbstance se disorder benefits, and are well docmented. These evidentiary standards and other factors are available to participants and beneficiaries free of charge pon reqest. In this example, it appears that, nder the terms of the plan as written and in practice, the processes, strategies, evidentiary standards, and other factors considered by the plan in implementing its precertification and concrrent review of hospitalizations is comparable and applied no more stringently with respect to mental health and sbstance se disorder benefits than those applied with respect to medical/srgical benefits. Plan Z classifies care in skilled nrsing facilities or rehabilitation hospitals as inpatient benefits and likewise treats any covered care in residential treatment facilities for mental health or sbstance se disorders as an inpatient benefit. In addition, the plan treats home health care as an otpatient benefit and, likewise treats intensive otpatient and partial hospitalization for mental health or sbstance se disorder services as otpatient benefits. In this example, the plan assigns covered intermediate mental health and sbstance se disorder benefits to the six classifications in the same way that it assigns comparable intermediate medical/srgical benefits. Master s degree training and state licensing reqirements often vary among provider types. Plan Z consistently applies its standard that any provider mst meet whatever is the most stringent licensing reqirement standard related to spervised clinical experience reqirements in order to participate in the network. Therefore, Plan Z reqires master s-level therapists to have postdegree, spervised clinical experience in order to join their provider network. There is no parallel reqirement for master s-level general medical providers becase their licensing does reqire spervised clinical experience. In addition, the plan does not reqire post-degree, spervised clinical experience for psychiatrists or PhD level psychologists since their licensing already reqires spervised training. The reqirement that master s-level therapists mst have spervised clinical experience to join the network is permissible, as the plan consistently applies the same standard to all providers even thogh it may have a disparate impact on certain mental health providers. 26

42 SECTION F. Disclosre Reqirements Qestion 28 Does the plan comply with the mental health parity disclosre reqirements?... The plan administrator (or the health insrance isser) mst make available the criteria for medical necessity determinations made nder a grop health plan with respect to mental health/sbstance se disorder benefits (or health insrance coverage offered in connection with the plan with respect to sch benefits) to any crrent or potential participant, beneficiary, or contracting provider pon reqest. See 29 CFR (d)(1). The plan administrator (or health insrance isser) mst make available the reason for any denial nder a grop health plan (or health insrance coverage) of reimbrsement or payment for services with respect to mental health/sbstance se disorder benefits to any participant or beneficiary in a form and manner consistent with the rles in 29 CFR (the DOL claims procedre rle) and 29 CFR (internal claims and appeals and external review processes). Prsant to the internal claims and appeals and external review rles nder the Affordable Care Act, applicable to all non-grandfathered grop health plans, claims related to medical jdgment (inclding mental health/sbstance se disorder) are eligible for external review. The internal claims and appeals rles inclde the right of claimants (or their athorized representative) to be provided pon reqest and free of charge, reasonable access to and copies of all docments, records, and other information relevant to the claimant s claim for benefits. This incldes docments with information abot the processes, strategies, evidentiary standards, and other factors sed to apply an NQTL with respect to medical/srgical benefits and mental health/sbstance se disorder benefits nder the plan. See 29 CFR (d)(3). If coverage is denied based on medical necessity, medical necessity criteria for the mental health/sbstance se disorder benefits at isse and for medical/ srgical benefits in the same classification mst be provided within 30 days of the reqest to the participant, beneficiary, or provider or other individal if acting as an athorized representative of the beneficiary or participant. See 29 CFR b-1; 29 CFR (d)(1). Make Showing Compliance Simple! Docments or Plan Instrments Participants and Beneficiaries or DOL may reqest: Participants and beneficiaries may reqest docments and plan instrments regarding whether the plan is providing benefits in accordance with MHPAEA and copies mst be frnished within 30 days of reqest. This may inclde docmentation that illstrates how the health plan has determined that any financial reqirement, qantitative treatment limitation, or nonqantitative treatment limitation is in compliance with MHPAEA. For example, participants and beneficiaries may ask for: 27

43 An analysis showing that the plan meets the predominant/sbstantially all test. The plan may need to provide information regarding the amont of medical/srgical claims sbject to a certain type of QTL, sch as a copayment, in the prior year in a classification or its basis for calclating claims expected to be sbject to a certain type of QTL in the crrent plan year in a classification, for prposes of determining the plan s compliance with the predominant/sbstantially all test. A description of an applicable reqirement or limitation, sch as preathorization or concrrent review, that the plan has athorized for mental health/sbstance se disorder services and medical/srgical benefits within the relevant classification (in- or ot-of-network, in- or otpatient). These might inclde references to specific plan docments, for example provisions as stated on specified pages of the SPD, or other nderlying gidelines or criteria not inclded in the SPD that the Plan has conslted or relied pon; Information regarding factors, sch as cost or recommended standards of care, that are relied pon by a plan for determining which medical/srgical or mental health or sbstance se disorder benefits are sbject to a specific reqirement or limitation. These might inclde references to specific related factors or gidelines, sch as applicable tilization review criteria; A description of the applicable reqirement or limitation that the plan believes have been sed in any given mental health/sbstance se disorder service adverse benefit determination (ABD) within the relevant classification; Medical necessity gidelines relied pon for in and ot-of-network medical/ srgical and mental health and sbstance se disorder benefits. Tips: Participants, beneficiaries and contracting providers may reqest information to determine whether benefits nder a plan are being provided in parity even in the absence of any specific adverse benefit determination. Plans may need to work with insrance carriers providing coverage on behalf of an insred grop health plan or with third party administrators administering the plan to ensre that sch service providers either directly or in coordination with the plan are providing participants and beneficiaries any docments or information to which they are entitled. If a plan ses mental health and sbstance se disorder vendors and carveot service providers, the plan mst ensre that all combinations of benefits comport with parity, therefore vendors and carve ot providers shold provide docmentation of the necessary information to the Plan to ensre that all combination of benefits comport with parity. Note: Compliance with the disclosre reqirements of MHPAEA is not determinative of compliance with any other provision or other applicable Federal or State law. Be sre that the Plan, in addition to these disclosre reqirements, is disclosing information relevant to medical/srgical, mental health, and sbstance se disorder benefits as reqired prsant to other applicable provisions of law. 28

44 III. Determining Compliance with the Newborns Act Provisions in Part 7 of ERISA If yo answer No to any of the qestions below, the grop health plan is in violation of the Newborns Act provisions in Part 7 of ERISA. YES NO N/A SECTION A Newborns Act Sbstantive Provisions The sbstantive provisions of the Newborns Act apply only to certain plans, as follows: If the plan does not provide benefits for hospital stays in connection with childbirth, check N/A and go to Part IV of this self-compliance tool. (Note: Under the Pregnancy Discrimination Act, most plans are reqired to cover maternity benefits.) Special applicability rle for insred coverage that provides benefits for hospital stays in connection with childbirth: If the plan provides benefits for hospital stays in connection with childbirth, the plan is insred, and the coverage is in Wisconsin and several U.S. territories, it appears that the Federal Newborns Act applies to the plan. If this is the case, answer the qestions in SECTION A and SECTION B. If the plan provides benefits for hospital stays in connection with childbirth and is insred, whether the plan is sbject to the Newborns Act depends on State law. Based on a recent preliminary review of State laws, if the coverage is in any other state or the District of Colmbia, it appears that State law applies in lie of the Federal Newborns Act. If this is the case, check N/A and skip to SECTION B. Self-insred coverage that provides benefits for hospital stays in connection with childbirth: If the plan provides benefits for hospital stays in connection with childbirth and is self-insred, the Federal Newborns Act applies. Answer the qestions in SECTION A and SECTION B. Qestion 29 General 48/96-hor stay rle Does the plan comply with the general 48/96-hor rle?... Plans generally may not restrict benefits for a hospital length of stay in connection with childbirth to less than 48 hors in the case of a vaginal delivery (See ERISA section 711(a)(1)(A)(i)), or less than 96 hors in the case of a cesarean section (See ERISA section 711(a)(1)(A)(ii)). Therefore, a plan cannot deny a mother or her newborn benefits within a 48/96- hor stay based on medical necessity. (A plan may reqire a mother to notify the plan of a pregnancy to obtain more favorable cost-sharing for the hospital stay. This second type of plan provision is permissible nder the Newborns Act if the cost-sharing is consistent throghot the 48/96-hor stay.) 29

45 An attending provider may, however, decide, in consltation with the mother, to discharge the mother or newborn earlier. Qestion 30 Provider mst not be reqired to obtain athorization from plan Plans may not reqire providers to obtain athorization from the plan to prescribe a 48/96-hor stay. Does the plan comply with this rle?... Plans may not reqire that a provider (sch as a doctor) obtain athorization from the plan to prescribe a 48/96-hor stay. See ERISA section 711(a)(1)(B); 29 CFR (a)(4). Tips: Watch for plan preathorization reqirements that are too broad. For example, a plan may have a provision reqiring preathorization for all hospital stays. Providers cannot be reqired to obtain preathorization from the plan in order for the plan to cover a 48-hor (or 96-hor) stay in connection with childbirth. Therefore, in this example, the plan mst add clarifying langage to indicate that the general preathorization reqirement does not apply to 48/96- hor hospital stays in connection with childbirth. (Conversely, plans generally may reqire participants or beneficiaries to give notice of a pregnancy or hospital admission in connection with childbirth in order to obtain, for example, more favorable cost-sharing.) Nonetheless, the Newborns Act does not prevent plans and issers from reqiring providers to obtain athorization for any portion of a hospital stay that exceeds 48 (or 96) hors. Qestion 31 Incentives/penalties to mothers or providers Does the plan comply with the Newborns Act by avoiding impermissible incentives or penalties with respect to mothers or attending providers?... Penalties to attending providers to discorage 48/96-hor stays violate ERISA section 711(b)(3) and 29 CFR (b)(3)(i). Incentives to attending providers to encorage early discharges violate ERISA section 711(b)(4) and 29 CFR (b)(3)(ii). Penalties imposed on mothers to discorage 48/96-hor stays violate ERISA section 711(b)(1) and 29 CFR (b)(1)(i)(A). Incentives to mothers to encorage early discharges violate ERISA section 711(b)(2) and 29 CFR (b)(1)(i)(B). v An example of this wold be if the plan waived the mother s copayment or dedctible if the mother or newborn leaves within 24 hors. Benefits and cost-sharing may not be less favorable for the latter portion of any 48/96-hor hospital stay. In this case less favorable benefits wold violate ERISA section 711(b)(5) and 29 CFR (b)(2) and less favorable costsharing wold violate ERISA section 711(c)(3) and 29 CFR (c)(3). 30

46 SECTION B Disclosre Provisions Grop health plans that provide benefits for hospital stays in connection with childbirth are reqired to make certain disclosres, as follows: Qestion 32 Disclosre with respect to hospital lengths of stay in connection with childbirth Does the plan comply with the notice provisions relating to hospital stays in connection with childbirth?... Grop health plans that provide benefits for hospital stays in connection with childbirth are reqired to make certain disclosres. Specifically, the grop health plan s SPD mst inclde a statement describing any reqirements nder Federal or State law applicable to the plan, and any health insrance coverage offered nder the plan, relating to hospital length of stay in connection with childbirth for the mother or newborn child. See the SPD content reglations at 29 CFR (). Tip: Whether the plan is insred or self-insred, and whether the Federal Newborns Act provisions or State law provisions apply to the coverage, the plan mst provide a notice describing any reqirements relating to hospital length of stays in connection with childbirth. A model notice is provided in the Model Disclosres on page

47 IV. Determining Compliance with the WHCRA Provisions in Part 7 of ERISA If yo answer No to any of the qestions below, the grop health plan is in violation of the WHCRA provisions in Part 7 of ERISA. YES NO N/A WHCRA applies only to plans that offer benefits with respect to a mastectomy. If the plan does not offer these benefits, check N/A and go to Part V of this selfcompliance tool... If the plan does offer benefits with respect to a mastectomy, answer Qestions Qestion 33 For reqired coverages nder WHCRA Does the plan provide the for coverages reqired by WHCRA?... In the case of a participant or beneficiary who is receiving benefits in connection with a mastectomy, the plan shall provide coverage for the following benefits for individals who elect them: v v v v All stages of reconstrction of the breast on which the mastectomy has been performed; Srgery and reconstrction of the other breast to prodce a symmetrical appearance; Prostheses; and Treatment of physical complications of mastectomy, inclding lymphedema, in a manner determined in consltation with the attending provider and the patient. See ERISA section 713(a). These reqired coverages can be sbject to annal dedctibles and coinsrance provisions if consistent with those established for other medical/srgical benefits nder the plan or coverage. Tip: Plans that cover benefits for mastectomies cannot categorically exclde benefits for reconstrctive srgery or certain post-mastectomy services. In addition, time limits for seeking treatment may rn afol of the general reqirement to provide the for reqired coverages. Qestion 34 Incentive provisions Does the plan comply with WHCRA by not providing impermissible incentives or penalties with respect to patients or attending providers?... A plan may not deny a patient eligibility to enroll or renew coverage solely to avoid WHCRA s reqirements nder ERISA section 713(c)(1). In addition, nder ERISA section 713(c)(2), a plan may not penalize or offer incentives to an attending provider to indce the provider to frnish care in a manner inconsistent with WHCRA. 32

48 Qestion 35 Enrollment notice Does the plan provide adeqate and timely enrollment notices as reqired by WHCRA?... Upon enrollment, a plan mst provide a notice describing the benefits reqired nder WHCRA. See ERISA section 713(a). The enrollment notice mst describe the benefits that WHCRA reqires the grop health plan to cover, specifically: v All stages of reconstrction of the breast on which the mastectomy was performed, v Srgery and reconstrction of the other breast to prodce a symmetrical appearance, v Prostheses, and v Physical complications reslting from mastectomy (inclding lymphedema). The enrollment notice mst describe any dedctibles and coinsrance limitations applicable to sch coverage. (Note: Under WHCRA, coverage of the reqired benefits may be sbject only to dedctibles and coinsrance limitations consistent with those established for other medical/srgical benefits nder the plan or coverage.) Tip: A model notice is provided in the Model Disclosres on page 141. Qestion 36 Annal notice Does the plan provide adeqate and timely annal notices as reqired by WHCRA?... Plans mst provide notices describing the benefits reqired nder WHCRA once each year. See ERISA section 713(a). To satisfy this reqirement, the plan may redistribte the WHCRA enrollment notice or the plan may se a simplified disclosre that: v Provides notice of the availability of benefits nder the plan for reconstrctive srgery, srgery to achieve symmetry between the breasts, prostheses, and physical complications reslting from mastectomy (inclding lymphedema); and v Contact information (e.g., telephone nmber) for obtaining a detailed description of WHCRA benefits available nder the plan. Tip: The WHCRA annal notice can be provided in the SPD if the plan distribtes SPDs annally. If not, the plan shold break off the annal notice into a separate disclosre. A model notice is provided in the Model Disclosres on page

49 V. Determining Compliance with the GINA Provisions in Part 7 of ERISA If yo answer No to any of the qestions below, the grop health plan is in violation of the GINA provisions in Part 7 of ERISA. YES NO N/A Unlike HIPAA, the GINA provisions generally do apply to very small health plans (plans with less than two participants who are crrent employees), inclding retireeonly health plans. Definitions (for all defined terms nder GINA, see 29 CFR (a)): Genetic information means, with respect to an individal, information abot the individal s genetic tests, the genetic tests of family members of the individal, the manifestation (see definition below) of a disease or disorder in family members of the individal or any reqest for or receipt of genetic services or participation in clinical research which incldes genetic services by the individal or any family member of the individal. Genetic information incldes, with respect to a pregnant woman or family member of the pregnant woman, genetic information of any fets carried by the pregnant woman. Genetic information incldes, with respect to an individal who is tilizing an assisted reprodctive technology, genetic information of any embryo legally held by the individal or family member. Genetic information does NOT inclde information abot the sex or age of any individal. Family member means, with respect to an individal, a dependent of the individal or any person who is a first-degree, second-degree, third-degree, or forth-degree relative of the individal or a dependent of the individal. Relatives of affinity (sch as by marriage or adoption) are treated the same as relatives by consanginity (that is, relatives who share a common biological ancestor). Relatives by less than fll consanginity (sch as half-siblings, who share only one parent) are treated the same as relatives by fll consanginity (sch as siblings who share both parents). Therefore, family members inclde parents, sposes, siblings, children, grandparents, grandchildren, ants, ncles, nephews, nieces, great-grandparents, great-grandchildren, great ants, great ncles, first cosins, great-great grandparents, great-great grandchildren, and children of first cosins. Manifestation means, with respect to a disease, disorder, or pathological condition, that an individal has been or cold reasonably be diagnosed with the disease, disorder, or pathological condition by a health care professional with appropriate training and expertise in the field of medicine involved. A disease, disorder, or pathological condition is not manifested if a diagnosis is based principally on genetic information. 34

50 Genetic services means a genetic test, genetic conseling (inclding obtaining, interpreting, or assessing genetic information) or genetic edcation. Genetic test means an analysis of hman DNA, RNA, chromosomes, proteins, or metabolites, if the analysis detects genotypes, mtations, or chromosomal changes. A genetic test does NOT inclde an analysis of proteins or metabolites that is directly related to a manifested disease, disorder, or pathological condition. For example, a test to determine whether an individal has a BRCA1 or BRCA2, genetic variants associated with a significantly increased risk for breast cancer, is a genetic test. An HIV test, complete blood cont, cholesterol test, liver fnction test, or test for the presence of alcohol or drgs is not a genetic test. Qestion 37 Does the plan comply with GINA s prohibition against gropbased discrimination based on genetic information?... A grop health plan cannot adjst premim or contribtion amonts for the plan, or any similarly sitated individals nder the plan, on the basis of genetic information. See 29 CFR (b)(1). Nothing limits a plan from increasing the premim for the grop health plan or for a grop of similarly sitated individals nder the plan based on the manifestation of a disease or disorder of an individal enrolled in the plan. However, the manifestation of the disease in one individal cannot be sed as genetic information abot other grop members to frther increase the premim for a grop health plan or a grop of similarly sitated individals nder the plan. See 29 CFR (b)(2). Qestion 38 Does the plan comply with GINA s limitation on reqesting or reqiring genetic testing?... A grop health plan generally mst not reqest or reqire an individal or family member of the individal to ndergo a genetic test. See 29 CFR (c)(1). Exceptions: v A health care professional who is providing health care services to an individal can reqest that the individal ndergo a genetic test. See 29 CFR (c)(2). v A plan can obtain and se the reslts of a genetic test for making a determination regarding payment. However, the plan is permitted to reqest only the minimm amont of information necessary to make the determination. See 29 CFR (c)(4). v Exception for research: a plan or isser may reqest, bt not reqire, that a participant or beneficiary ndergo a genetic test if the reqest is prsant to research and several conditions are met. See 29 CFR (c)(5). 35

51 Qestion 39 Does the plan comply with GINA s prohibition on collection of genetic information, prior to or in connection with enrollment?... A plan cannot collect genetic information prior to an individal s effective date of coverage nder that plan or coverage, nor in connection with the rles for eligibility that apply to that individal. See 29 CFR (d)(2)(i). Whether or not an individal s information is collected prior to that individal s effective date of coverage is determined at the time of collection. Exception for incidental collection: v If a plan obtains genetic information incidental to the collection of other information concerning any individal, the collection is not a violation, as long as the collection is not for nderwriting prposes. See 29 CFR (d)(2)(ii)(A). v However, the incidental collection exception does not apply in connection with any collection where it is reasonable to anticipate that health information wold be received, nless the collection explicitly states that genetic information shold not be provided. See 29 CFR (d)(2)(ii)(B). Qestion 40 Does the plan comply with GINA s prohibition on collection of genetic information, for nderwriting prposes?... A plan cannot reqest, reqire, or prchase ( collect ) genetic information for nderwriting prposes. See 29 CFR (d)(1)(i). Underwriting prposes means, with respect to any grop health plan: v Rles for determination of eligibility (inclding enrollment and contined eligibility) for benefits nder the plan or coverage (inclding changes in dedctibles or other cost-sharing mechanisms in retrn for activities sch as completing a health risk assessment or participating in a wellness program); v The comptation of premim or contribtion amonts nder the plan or coverage (inclding disconts, rebates, payments in kind, or other premim differential mechanisms in retrn for activities sch as completing a health risk assessment or participating in a wellness program); v The application of any preexisting condition exclsion nder the plan or coverage; and v Other activities related to the creation, renewal, or replacement of a contract of health insrance or health benefits. See 29 CFR (d)(1)(ii). Exception for medical appropriateness (only if an individal seeks a benefit nder the plan): v If an individal seeks a benefit nder a plan, the plan may limit or exclde the benefit based on whether the benefit is medically appropriate and the determination of whether the benefit is medically appropriate is not for nderwriting prposes. 36

52 v If a plan conditions a benefit on medical appropriateness, and medical appropriateness depends on the genetic information of an individal, the plan can condition the benefit on genetic information. A plan or isser is permitted to reqest only the minimm amont of genetic information necessary to determine medical appropriateness. See 29 CFR (d) (1)(iii) and (e). If yo answered Yes to ALL of the above qestions, there does not appear to be a violation of the GINA reglations. 37

53 VI. Compliance with Michelle s Law If yo answer No to any of the qestions below, the grop health plan is in violation of the Michelle s Law provisions in Part 7 of ERISA. **Note: Under the Affordable Care Act grop health plans and issers are generally reqired to provide dependent coverage to age 26 regardless of stdent stats of the dependent. Nonetheless, nder some circmstances, sch as a plan that provides dependent coverage beyond age 26, Michelle s Law provisions may apply. Qestion 41 Does the plan comply with the Michelle s Law reqirement not to terminate coverage of dependent stdents on medically necessary leave of absence?... Medically necessary leave of absence means with respect to a dependent child in connection with a grop health plan or health insrance coverage offered in connection with a grop health plan, a leave of absence from or other change in enrollment stats in a postsecondary edcational instittion that begins while the child is sffering from a serios illness or injry; is medically necessary; and cases the child to lose stdent stats for prposes of coverage nder the terms of the plan or coverage. A dependent child is a beneficiary who is a dependent child nder the terms of the plan or coverage, of a participant or beneficiary nder the plan or coverage and who was enrolled in the plan or coverage on the basis of being a stdent at a postsecondary edcational instittion immediately before the first day of the medically necessary leave of absence involved. YES NO N/A A grop health plan or isser shall not terminate coverage of a dependent child de to a medically necessary leave of absence that cases the child to lose stdent stats before the date that is the earlier of: v the date that is one year after the first day of the medically necessary leave of absence; or v the date on which sch coverage wold otherwise terminate nder the terms of the plan or health insrance coverage. See ERISA section 714(b). Tip: The grop health plan or isser can reqire receipt of written certification by a treating physician of the dependent child which states that the dependent child is sffering from a serios illness or injry and that the leave of absence (or other change of enrollment) is medically necessary. 38

54 Qestion 42 Does the plan comply with Michelle s Law s notice reqirement?... A grop health plan or isser mst inclde with any notice regarding a reqirement for certification of stdent stats for coverage, a description of the Michelle s law provision for contined coverage dring medically necessary leaves of absence. See ERISA section 714(c). 39

55 VII. Determining Compliance with the Affordable Care Act Provisions in Part 7 of ERISA The Affordable Care Act was signed into law by the President on March 23, Amendments to the Affordable Care Act made throgh the Health Care Edcation and Reconciliation Act (Reconciliation Act) were signed into law on March 30, Generally, the Affordable Care Act s market reform provisions amend title XXVII of the Pblic Health Service Act (PHS Act), which is administered by the Department of Health and Hman Services. The Affordable Care Act also creates section 715 of the Employee Retirement Income Secrity Act (ERISA), administered by the Department of Labor, Employee Benefits Secrity Administration, and section 9815 of the Internal Revene Code, administered by the Department of Treasry (the Treasry) and the Internal Revene Service (IRS), to incorporate the market reform provisions of the PHS Act into ERISA and the Code, and make them applicable to grop health plans and health insrance issers providing grop health insrance coverage. Under section 1251 of the Affordable Care Act, grandfathered health plans are reqired to comply with some, bt not all, of the market reform provisions. In addition, these provisions do not apply to retiree-only or excepted benefits plans (See ERISA Section 732). The Departments of Labor, HHS, and the Treasry have been issing gidance on an ongoing basis since May Note, that the Affordable Care Act, PHSA Section 2705 inclded reqirements relating to wellness programs. The Departments issed final reglations Jne 6, 2013 at 29 CFR and 29 CFR sing joint athority nder HIPAA and the ACA. These reqirements relating to wellness programs are discssed in the HIPAA section of this tool at I (C). See EBSA s Website: dol.gov/ebsa/healthreform/ for the most p-to-date gidance. This compliance aid will be pdated in the ftre to frther address additional reqirements as they become applicable, as enforcement grace periods expire, or as the Departments isse additional gidance. 40

56 SECTION A. Determining Grandfather Stats Under the Affordable Care Act Provisions in Part 7 of ERISA Note: The grandfathered stats of a plan will affect whether a plan mst comply with certain provisions of the Affordable Care Act (ACA). There are also special rles for collectively bargained plans. See also the rles at 29 CFR (f). Grandfathered stats is intended to allow people to keep their coverage as it existed on March 23, 2010, while giving plans some flexibility to make normal changes while retaining grandfathered stats. Restrictions and reqirements on grandfathered health plan coverage provides individals protection from significant redctions in coverage, provides for coverage to inclde nmeros protections implemented throgh the Affordable Care Act, and allows employers the flexibility to manage costs. The analysis for determining grandfathered stats applies separately to each benefit package or option. Accordingly, grandfathered stats might be retained for some benefit packages or options and relinqished for others. By contrast, if an employer relinqished grandfathered stats for self-only, family, or any other tier within a benefits package, it wold relinqish grandfathered stats for the entire package. See 29 CFR (a)(1)(i). If the plan is not claiming grandfathered stats, proceed to SECTION B. If the answer is yes to qestions 43 and 44 below the grop health plan may be a grandfathered health plan. Qestion 43 Did the plan exist with at least one individal enrolled on March 23, 2010?... A grandfathered grop health plan mst have been in existence with an enrolled individal on March 23, Any plan that does not meet this reqirement is not in grandfathered stats. See 29 CFR (a)(1) (i). Qestion 44 Has the plan continosly covered someone (not necessarily the same person) since March 23, 2010?... A grop health plan will not relinqish its grandfathered stats merely becase one or more (or all) individals enrolled on March 23, 2010, cease to be covered. However, a grandfathered health plan mst continosly cover someone (not necessarily the same person) since March 23, 2010, to maintain its stats. See 29 CFR (a)(1)(i). If the answers to qestions 43 and 44 were yes, complete qestions If the answer is no to either qestion 43 or 44, the grop health plan cannot claim grandfathered stats; proceed to SECTION B. 41

57 Tip: Provided changes are made withot exceeding the other standards that case a plan to relinqish grandfathered stats, changes that generally will not case plans to relinqish grandfathered stats inclde changes to: premims; to comply with Federal or State legal reqirements; to volntarily comply with provisions of the Affordable Care Act; third party administrators; network plan s provider network; and to a prescription drg formlary. Qestion 45 Has the plan eliminated all or sbstantially all benefits to diagnose or treat a particlar condition?... For the prpose of determining grandfathered stats, the elimination of benefits for any necessary element to diagnose or treat a condition is considered the elimination of all or sbstantially all benefits to diagnose or treat a particlar condition. See 29 CFR (g)(1)(i). Qestion 46 Has the plan increased a percentage cost-sharing reqirement (sch as an individal s coinsrance)?... Any increase measred from March 23, 2010, in a percentage cost-sharing reqirement cases a plan to relinqish grandfathered stats. See 29 CFR (g)(1)(ii). Qestion 47 Has the plan increased a fixed-amont cost-sharing reqirement other than a copayment (sch as a dedctible or ot-of-pocket limit) sch that the total percentage increase measred from March 23, 2010 exceeds the maximm percentage increase?... The maximm percentage increase is medical inflation, expressed as a percentage, pls 15 percentage points. See 29 CFR (g)(3)(ii). Medical inflation is the increase since March 2010, in the overall medical care component of the Consmer Price Index for All Urban Consmers (CPI-U) (nadjsted) pblished by the Department of Labor sing the base of 100. See 29 CFR (g)(3)(i). Qestion 48 Has the plan increased a fixed-amont copayment sch that the increase measred from March 23, 2010 exceeds the greater of: the maximm percentage increase, or an amont eqal to $5 pls medical inflation?... The maximm percentage increase is medical inflation, expressed as a percentage, pls 15 percentage points. See 29 CFR (g)(3)(ii). Medical inflation is the increase since March 2010 in the overall medical care component of the Consmer Price Index for All Urban Consmers (CPI-U) (nadjsted) pblished by the Department of Labor sing the base of 100. See 29 CFR (g)(3)(i). 42

58 Qestion 49 Has there been a decrease in the contribtion rate by the employer (or employee organization) towards the cost of any tier of coverage for any class of similarly sitated individals by more than 5 percentage points below the contribtion rate for the coverage period that incldes March 23, 2010?... If the contribtion rate is based on a formla, was there a decrease in the contribtion rate by more than 5 percentage points below the contribtion rate for the coverage period that incldes March 23, 2010? See 29 CFR (g)(1)(v)(B). Tip: If a grop health plan modifies the tiers of coverage it had on March 23, 2010 (for example, from self-only and family to a mlti-tiered strctre of selfonly, self-pls-one, self-pls-two, and self-pls-three-or-more), the employer contribtion for any new tier wold be tested by comparison to the contribtion rate for the corresponding tier on March 23, If the plan adds one or more new coverage tiers withot eliminating or modifying any previos tiers and those new coverage tiers cover classes of individals that were not covered previosly nder the plan, the new tiers wold not be analyzed nder the standards of paragraph (g)(1). See DOL FAQs Abot the Affordable Care Act Implementation Part II, qestion 3 at dol.gov/ebsa/faqs/faq-aca2.html. In cases of a mltiemployer plan that has either a fixed-dollar employee contribtion or no employee contribtion towards the cost of coverage, if the employer s contribtion rate changes, provided any changes in the coverage terms wold not otherwise case the plan to cease to be grandfathered and there contines to be no employee contribtion or no increase in the fixeddollar employee contribtion towards the cost of coverage, the change of the employer s contribtion rate will not, in and of itself, case a plan that is otherwise a grandfathered health plan to relinqish grandfathered stats. See DOL FAQs Abot the Affordable Care Act Implementation Part I, qestion 4 at dol.gov/ebsa/faqs/faq-aca.html. Qestion 50 Has the plan added or decreased an overall annal limit on benefits?... A plan will relinqish its grandfathered stats if it: v Adds an overall annal limit on the dollar vale of all benefits when it did not previosly impose an overall annal limit (See 29 CFR (g)(1)(vi)(A)); v v Previosly imposed an overall lifetime limit on the dollar vale of benefits (bt no overall annal limit) and adopts an overall annal limit at a dollar vale that is lower than the dollar vale of the lifetime limit on March 23, 2010 (See 29 CFR (g)(1)(vi)(B)); or Decreases the dollar vale of the overall annal limit that was in place on March 23, 2010 (See 29 CFR (g)(1)(vi)(C)). 43

59 Note: For plan years beginning on or after Janary 1, 2014, a plan may not establish, for any individal, an annal limit on the dollar amont of benefits that are essential health benefits. See 29 CFR (b)(1). If the answer to any of qestions was yes, the plan is NOT a grandfathered plan, proceed to SECTION B. Qestion 51 Did the plan change issers after March 23, 2010?... If the answer to qestion 51 is yes, if the grop health plan changed issers after March 23, 2010, and the change in isser was effective on or after November 15, 2010, the plan will contine to be a grandfathered plan provided no other changes that wold relinqish grandfathered stats are made. See 29 CFR (a)(1)(ii), as amended. Proceed to qestion 53. If a grop health plan changed issers after March 23, 2010, and the change was effective prior to November 15, 2010, the plan will have relinqished grandfather stats. The plan is not a grandfathered plan; proceed to SECTION B. Tip: The operative date is the effective date of the new contract, not the date the new contract was entered into. Special rles apply for collectively bargained plans. See 29 CFR (f) for collectively bargained plans. Qestion 52 Did the plan change from self-insred to flly-insred after March 23, 2010?... If the grop health plan was self-insred and changed to flly insred after March 23, 2010, and the change was effective on or after November 15, 2010, the plan will contine to be a grandfathered plan provided no other changes are made that wold relinqish grandfathered stats. See 29 CFR (a)(1)(ii), as amended. Proceed to qestion 53. If a grop health plan was self-insred and changed to flly-insred after March 23, 2010, and the change was effective prior to November 15, 2010, the plan will have relinqished grandfathered stats. The plan is not a grandfathered plan; proceed to SECTION B. If Qestions 51 and 52 are not applicable to the grop health plan, contine to Qestion 54 to contine the grandfather stats analysis. 44

60 Qestion 53 If the grop health plan changed issers (inclding a plan that was self-insred and changed to flly insred) and has maintained grandfathered stats, did the plan provide docmentation to the new isser of the plan terms nder the prior health coverage sfficient to determine whether any other change was made that wold relinqish grandfathered stats?... To maintain stats as a grandfathered health plan, the plan mst provide to the new isser (and the new isser mst reqire) docmentation of plan terms (inclding benefits, cost sharing, employer contribtions, and annal limits) nder the prior health coverage sfficient to determine whether any other change is being made that wold relinqish grandfathered stats. See 29 CFR (a)(3)(ii), as amended. Qestion 54 Does the plan inclde a statement that it believes it is a grandfathered health plan in any plan materials provided to participants and beneficiaries that describe the benefits provided nder the plan?... To maintain stats as a grandfathered grop health plan, the plan mst inclde a statement, in any plan materials provided to a participant or beneficiary describing the benefits nder the plan, that the plan believes it is a grandfathered health plan within the meaning of section 1251 of the Affordable Care Act and mst provide contact information for qestions and complaints. Model langage is available. See 29 CFR (a)(2). For all plans that, based on qestions 43 throgh 54, have not relinqished grandfathered stats, complete qestion 55. Qestion 55 Is the plan maintaining records docmenting the terms of the plan in connection with the coverage in effect on March 23, 2010, and are these records made available pon reqest?... To maintain stats as a grandfathered grop health plan the plan mst maintain records docmenting the terms of the plan in connection with the coverage that was in effect on March 23, 2010, and any other docments necessary to verify, explain, or clarify its stats as a grandfathered health plan. These records mst be maintained for as long as the plan takes the position that it is grandfathered, and mst be available for examination pon reqest. See 29 CFR (a)(3)(i)(A) & (i)(b), as amended. 45

61 SECTION B. Determining Compliance with the Affordable Care Act Extension of Dependent Coverage of Children to Age 26 Provisions in Part 7 of ERISA Note: This provision is applicable for plan years beginning on or after Sept. 23, This provision applies to both grandfathered and non-grandfathered grop health plans. Qestion 56 Does the plan provide coverage for dependent children?... If the answer to this qestion is no, proceed to SECTION C. These provisions are only applicable to grop health plans that provide coverage to dependent children. If the answer is yes, proceed to qestion 57. If the answer to the qestion below is yes, the plan is in compliance with the rles regarding Dependent Coverage to Age 26. Qestion 57 Does the plan make dependent coverage available for children to age 26?... Plans and issers cannot deny or restrict dependent coverage for a child who is nder age 26 other than in terms of a relationship between a child and the participant. Ths, plans and issers cannot deny or restrict dependent coverage for a child who is nder age 26 based on the presence or absence of financial dependency pon or residency with the participant or any other person, stdent stats, employment or any combination of these factors. In addition, plans and issers cannot limit dependent coverage based on whether the child nder age 26 is married. The Affordable Care Act and implementing reglations do not reqire plans to cover children of children. See 29 CFR (b) & (c). The terms of the plan or coverage cannot vary based on age, except for children who are age 26 or older. See 29 CFR (d). Tip: A plan or isser does not fail to satisfy the reqirements regarding Dependent Coverage to Age 26 becase the plan limits health coverage for children ntil the child trns 26 to only those children who are described in section 152(f)(1) of the Code (That section of the Code defines children to inclde only sons, daghters, stepchildren, adopted children (inclding children placed for adoption), and foster children.). For an individal not described in Code section 152(f)(1), sch as a grandchild or niece, a plan may impose additional conditions on eligibility for health coverage, sch as a condition that the individal be a dependent for income tax prposes. See DOL FAQs Abot the Affordable Care Act Implementation Part I, qestion 14 at dol.gov/ebsa/faqs/faq-aca.html. 46

62 SECTION C. Determining Compliance with the Affordable Care Act Rescission Provisions in Part 7 of ERISA Note: This provision is applicable for plan years beginning on or after Sept. 23, This provision applies to both grandfathered and non-grandfathered grop health plans. A rescission is a cancellation or discontinance of coverage that has retroactive effect; this incldes a cancellation that treats a policy as void from the time of the grop s enrollment or a cancellation that voids benefits paid p to one year before the cancellation. A rescission is not the cancellation or discontinance of coverage that has only a prospective effect; or the cancellation or discontinance of coverage if effective retroactively to the extent it is based on a failre to timely pay reqired premims or contribtions towards the cost of coverage. See 29 CFR (a)(2). If the answer to the qestion below is yes the plan is in compliance with the rles regarding rescission of coverage. Qestion 58 Does the plan only rescind coverage for instances where an act, practice, or omission that constittes frad, or an intentional misrepresentation of material fact has occrred?... A grop health plan, or health insrance isser offering grop health insrance coverage, mst not rescind coverage with respect to an individal (inclding a grop to which the individal belongs, or family coverage in which the individal is inclded) once the individal is covered nder the plan or coverage, nless the individal (or a person seeking coverage on behalf of the individal) performs an act, practice, or omission that constittes frad, or makes an intentional misrepresentation of material fact, as prohibited by the terms of the plan or coverage. See 29 CFR (a)(1). Tip: Some employers hman resorce departments may reconcile lists of eligible individals with their plan or isser via data feed only once per month. If a plan covers only active employees (sbject to the COBRA contination coverage provisions) and an employee pays no premims for coverage after termination of employment, the Departments do not consider the retroactive elimination of coverage back to the date of termination of employment, de to delay in administrative record-keeping, to be a rescission. Similarly, if a plan does not cover ex-sposes (sbject to the COBRA contination coverage provisions) and the plan is not notified of a divorce and the fll COBRA premim is not paid by the employee or ex-spose for coverage, the Departments do not consider a plan s termination of coverage retroactive to the divorce to be a rescission of coverage. (Of corse, in sch sitations COBRA may reqire coverage to be offered for p to 36 months if the COBRA applicable premim is paid by the qalified beneficiary.) See DOL FAQs Abot the Affordable Care Act Implementation Part II, qestion 7 at dol.gov/ebsa/faqs/faq-aca2.html. 47

63 SECTION D. Determining Compliance with the Affordable Care Act Prohibitions on Lifetime Limits and Restrictions on Annal Limits in Part 7 of ERISA Note: This provision is applicable for plan years beginning on or after Sept. 23, This provision applies to both grandfathered and non-grandfathered grop health plans. The restrictions on annal limits do not apply to health flexible spending arrangements (FSAs), medical savings acconts (MSAs), or health savings acconts (HSAs). In the case of health reimbrsement acconts (HRAs) that are integrated with other grop health plan coverage which complies with the prohibitions on lifetime and annal limits, the fact that benefits nder the HRA by itself are limited does not violate these rles. Stand-alone HRAs limited to retirees only are not sbject to these rles. (For more information abot the application of the market reforms and other provisions of the Affordable Care Act to HRAs, health FSAs, and certain other employer healthcare arrangements, see Technical Release , available at dol.gov/ebsa/newsroom/tr13-03.html. 1. Lifetime Limits If the answer to the qestion below is yes the plan is in compliance with the rles regarding prohibitions on lifetime limits. Qestion 59 Does the plan comply with the Affordable Care Act s prohibition on lifetime limits?... A grop health plan or isser may not establish any lifetime limit on the dollar amont of benefits for any individal. This prohibition applies for plan years beginning on or after September 23, See 29 CFR (a)(1). Tip: These rles do not prevent a plan or isser from placing lifetime dollar limits with respect to any individal on specific covered benefits that are not essential health benefits (to the extent this is permissible nder applicable Federal and State law). See 29 CFR (b)(1). Note: Essential health benefits refers to essential benefits nder Section 1302(b) of the Affordable Care Act and applicable reglations (issed by HHS) inclding the Freqently Asked Qestion on Essential Health Benefits Blletin. For plan years beginning before the issance of reglations defining essential health benefits, for prposes of enforcement, the Departments will take into accont good faith efforts to comply with a reasonable interpretation of the term essential health benefits. For this prpose, a plan or isser mst apply the definition of essential health benefits consistently. See Preamble to Interim Final Reglations, at 75 FR 37188,

64 2. Annal Limits If the answer to the qestion below is yes the plan is in compliance with the rles regarding prohibitions/restrictions on annal limits. Qestion 60 Does the plan comply with the Affordable Care Act s prohibition on annal limits?... For plan years beginning on or after Janary 1, 2014, a plan may not establish, for any individal, an annal limit on the dollar amont of benefits that are essential health benefits. Tip: These rles do not prevent a plan or isser from placing annal dollar limits with respect to any individal on specific covered benefits that are not essential health benefits (to the extent this is permissible nder applicable Federal and State law). See 29 CFR (b)(1). SECTION E. Determining Compliance with the Affordable Care Act Prohibition on Preexisting Condition Exclsions This provision applies to both grandfathered and non-grandfathered grop health plans. The definition of preexisting condition exclsion incldes any limitation or exclsion of benefits (inclding a denial of coverage) applicable to an individal as a reslt of information relating to an individal s health stats before the individal s effective date of coverage (or if coverage is denied, the date of denial), sch as a condition identified as a reslt of a pre-enrollment qestionnaire or a physical examination given to the individal, or a review of medical records relating to the pre-enrollment period. See 29 CFR If the answer to the following qestion is yes the plan is in compliance with the prohibition on preexisting condition exclsions. Qestion 61 Does the plan comply with the Affordable Care Act by not imposing a preexisting condition exclsion?... For plan years beginning on or after Janary 1, 2014, grop health plans may not impose any preexisting condition exclsions. See 29 CFR (a)(1). Tip: Some preexisting condition exclsions are clearly designated as sch in the plan docments. Others are not. Check for hidden preexisting condition exclsion provisions. A hidden preexisting condition exclsion is not designated as a preexisting condition exclsion, bt restricts benefits based on when a condition arose in relation to the effective date of coverage. 49

65 Example: A plan excldes coverage for cosmetic srgery nless the srgery is reqired by reason of an accidental injry occrring after the effective date of coverage. This plan provision operates as a preexisting condition exclsion becase only people who were injred while covered nder the plan receive benefits for treatment. People who were injred while they had no coverage (or while they had prior coverage) do not receive benefits for treatment. Accordingly, this plan provision limits benefits relating to a condition becase the condition was present before the effective date of coverage, and is considered a preexisting condition exclsion. SECTION F- Compliance with the 90-day Waiting Period Limitation Provision Use the following qestions to help determine whether the grop health plan complies with the Departments 90-day waiting period limitation reglations. See final reglations issed by the Departments on Febrary 24, 2014 at 29 CFR Note: PHS Act section 2708, as added by the Affordable Care Act and incorporated into section 715 of ERISA, prohibits the application of any waiting period that exceeds 90 days. Plans are not reqired to have a waiting period, and the provision does not reqire plan sponsors to offer coverage to any particlar employee or class of employees. This provision applies to grandfathered health plans and non-grandfathered plans. Qestion 62- Does the plan apply a waiting period that exceeds 90-days?... A waiting period is defined as the period that mst pass before coverage for an individal who is otherwise eligible to enroll nder the terms of a grop health plan can become effective. See ERISA section 701(b)(4); 29 CFR (b) Being eligible for coverage nder the terms of the plan generally means having met the plan s sbstantive eligibility conditions (sch as, for example, being in an eligible job classification, achieving job-related licensre reqirements specified in the plan s terms, or satisfying a reasonable and bona fide employment-based orientation period). See 29 CFR (c)(1). Variable Hor Employees: If a plan conditions eligibility on an employee reglarly having a specified nmber of hors of service per period (or working fll-time), and it cannot be determined that a newly hired employee is reasonably expected to reglarly work that nmber of hors per period (or work fll-time), the plan may take a reasonable period of time, not to exceed 12 months and beginning on any date between the employee s start date and the first day of the first calendar month following the employee s start date, to determine whether the employee meets the plan s eligibility condition. See 29 CFR (c)(3)(i). 50

66 Tip: Except in cases in which a waiting period that exceeds 90 days is imposed in addition to a measrement period, the time period for determining whether an employee meets the plan s eligibility condition will not be considered to be designed to avoid compliance with the 90-day waiting period limitation if the coverage is made effective no later than 13 months from the employee s start date, pls any time remaining ntil the first day of the next calendar month. Cmlative Hors of Service Reqirements: If a plan conditions eligibility on an employee having completed a nmber of cmlative hors of service, the eligibility condition is not considered to be designed to avoid compliance with the 90-day waiting period limitation if the cmlative hors-of-service reqirement does not exceed 1,200 hors. The plan s waiting period mst begin once the new employee satisfies the plan s cmlative hors-of-service reqirement. See 29 CFR (c)(3) (ii). Limitation on Orientation Periods To the extent that an orientation period is not sed as a sbterfge for the passage of time, or designed to avoid compliance with the 90-day waiting period limitation, an orientation period is permitted only if it does not exceed one month. One month is determined by adding one calendar month and sbtracting one calendar day, measred from an employee s start date in a position that is otherwise eligible for coverage. See 29 CFR (c)(3)(iii). Tip: It is not permissible nder the 90-day rle to delay coverage ntil the first day of the month following completion of a 90-day waiting period. See 29 CFR (e). If yo answered Yes to the above qestion nder SECTION F, the plan violates PHS Act Section SECTION G. Determining Compliance with the Affordable Care Act Provisions Regarding the provision of the Smmary of Benefits and Coverage (SBC) and Uniform Glossary Note: These provisions do apply to grandfathered health plans. The Affordable Care Act provides for new disclosre tools, the Smmary of Benefits and Coverage (SBC) and Uniform Glossary, to help consmers better compare coverage options available to them in both the individal and grop health insrance coverage markets. Generally, grop health plans and health insrance issers are reqired to provide the SBC and Uniform Glossary free of charge. The Departments pblished a final rle setting forth the reqirements for who mst provide and who is entitled to receive an SBC and Uniform Glossary, when these docments mst be provided, the content reqired in the docments, and the form and manner of how the docments can be provided. In addition, the Departments pblished a notice that sets forth the reqired template for the SBC and Uniform Glossary docments along with instrctions and sample 51

67 langage for completing the template. These docments are available on the EBSA Website at: dol.gov/ebsa/healthreform/. The SBC and Uniform Glossary mst be provided in a cltrally and lingistically appropriate manner. The rles for determining whether a langage other than English mst be made available are the same as the rles for Internal Claims and Appeals and External Review, discssed in SECTION J of this compliance aid. HHS has made available translated versions of the template and glossary in the potentially reqired langages at: cciio.cms.gov/resorces/other/index.html. Transitional Relief Providing Flexibility and Emphasizing Good Faith Progress Towards Compliance The Department is working together with employers and issers to assist them in coming into compliance with these reqirements. Specifically, in the instrctions for completing the SBC, the Department stated that to the extent a plan s terms do not reasonably correspond to the template and instrctions, the template shold be completed in a manner that is as consistent with the instrctions as reasonably as possible, while still accrately reflecting the plan s terms. See Instrctions Gide for Grop Coverage, page 1 General Instrctions. In addition, compliance assistance is a high priority for the Departments. Implementation will be marked by an emphasis on assisting (rather than imposing penalties on) plans and issers that are working diligently and in good faith to nderstand and come into compliance with the new law. Dring the first year of applicability, 17 the Departments did not impose penalties on plans and issers that were working diligently and in good faith to comply. The Departments are extending the previosly-issed enforcement and transition relief ntil frther gidance is issed. The Departments will contine to work with stakeholders over time to achieve maximm niformity for consmers and certainty for the reglated commnity. See ACA Implementation FAQ Part XIX, Q8. The qestions below focs on provision of the SBC by grop health plans to participants and beneficiaries. The final reglations also reqire health insrance issers to provide the SBC to grop health plan sponsors and participants and beneficiaries. More information on these reqirements can be fond at dol.gov/ebsa/healthreform. The following qestions have been developed to assist in determining compliance with the rles regarding the Smmary of Benefits and Coverage and Uniform Glossary. 17 The term first year of applicability refers to SBCs and niform glossaries provided with respect to coverage beginning before Janary 1,

68 Qestion 63 Does the plan provide an SBC, as reqired?... In Connection with Enrollment When providing the SBC to participants and beneficiaries, grop health plans and issers mst provide the SBC with respect to each benefit package offered for which they are eligible (See 29 CFR (a)(1)(ii)(A)) as part of any written application materials distribted by the plan or isser for enrollment. If no written application materials are distribted for enrollment, the SBC mst be provided no later than the first date a participant is eligible to enroll in coverage for themselves or any beneficiaries. See 29 CFR (a)(1)(ii)(B). For this prpose, written application materials inclde any forms or reqests for information, in paper form or throgh a Website or , that mst be completed for enrollment. See ACA Implementation FAQ Part VIII, Q9. Tips: The reqirement to provide an SBC by both a health insrance isser and a grop health plan to participants and beneficiaries can be satisfied for both entities as long as one entity provides the reqired SBC within the reqired timeframes. See 29 CFR (a)(1)(iii)(A). If a participant and any beneficiaries are known to reside at the same address, a single SBC provided to that address will satisfy the obligation to provide for all individals at the address. Under this circmstance, the obligation will also be satisfied if the SBC is frnished to the participant in electronic form. However if a beneficiary s last known address is different than the participant s address, a separate SBC mst be mailed to the beneficiary s address. See 29 CFR (a)(1)(iii)(B) and ACA Implementation FAQ Part VIII, Q10. Grop health plans are permitted to integrate the SBC with other smmary materials, sch as the SPD, as long as the SBC is intact and prominently displayed at the beginning of the materials (for example, immediately after the table of contents in an SPD) and all of the timing reqirements are met. See 77 FR The Departments generally allow electronic delivery of the SBC and Uniform Glossary where appropriate. For participants and beneficiaries who are already enrolled in coverage nder a grop health plan, an SBC may be provided electronically if the reqirements of the Department of Labor s electronic safe harbor are met. See ACA Implementation FAQ Part VIII, Q10 citing the Department of Labor s disclosre reglation at 29 CFR b-1. For participants and beneficiaries who are eligible bt not enrolled for coverage, the SBC may be provided electronically if the format is readily accessible; the SBC is provided in paper form pon reqest; and if the electronic form is an Internet posting, the plan or isser timely notifies the individal that the docments are available in paper form pon reqest. See 29 CFR (a)(3). An SBC may be provided electronically to participants and beneficiaries in connection with their online enrollment or online renewal of coverage nder the plan. SBCs 53

69 may also be provided electronically to participants and beneficiaries who reqest an SBC online. In either instance, a paper copy mst be provided pon reqest. See ACA Implementation FAQ Part IX, Q1. Qestion 64 Does the plan make available the Uniform Glossary, as reqired?... The Uniform Glossary incldes stattorily reqired terms, as well as mltiple additional terms recommended by the NAIC. The Uniform Glossary is available on the DOL Website at dol.gov/ebsa/healthreform/. The Uniform Glossary may not be modified by plans or issers. See 29 CFR (c)(3); 77 FR The final rle reqires grop health plans and issers to make the Uniform Glossary available pon reqest, in either paper or electronic form (as reqested), within seven bsiness days. See 29 CFR (c)(4). This reqirement may be satisfied by providing an internet address where an individal may review and obtain the Uniform Glossary as well as a contact phone nmber to obtain a paper copy of the Uniform Glossary. See 29 CFR (a)(2)(i)(L). If yo are completing this section as part of a review of a grandfathered health plan, STOP here. The following sections address provisions that do not apply to grandfathered health plans. SECTION H. Determining Compliance with the Patient Protection Provisions of the Affordable Care Act in Part 7 of ERISA Note: This provision is applicable for plan years beginning on or after Sept. 23, This provision does not apply to grandfathered health plans. 1. Choice of Healthcare Professional A plan or isser that reqires or provides for a participant or beneficiary to designate a participating primary care provider mst permit each participant or beneficiary to designate any participating primary care provider who is available to accept the participant or beneficiary. With respect to a child, the plan or isser mst permit the designation of a physician who specializes in pediatrics as a child s primary care provider, if the provider participates in the network of the plan or isser and is available to accept the child. See 29 CFR A(a)(1) & (a)(2). A grop health plan or isser that provides obstetrical or gynecological (OB/ GYN) care and reqires the designation of an in-network primary care provider, may not reqire athorization or referral by the plan, isser, or any person (inclding a primary care provider) for a female participant or beneficiary who seeks coverage for OB/GYN care provided by a participating health care professional who specializes in obstetrics and gynecology. (This incldes any individal athorized nder State law to provide OB/GYN care, inclding a person other than a physician). See 29 CFR A(a)(3). 54

70 Qestion 65 Does the plan reqire or provide for designation of a participating primary care provider by any participant or beneficiary?... If the answer is no, enter N/A for the following qestions and proceed to Qestion 72. If the answer to ALL of the qestions below is yes the plan is in compliance with the choice of healthcare professional provisions of the rles regarding patient protections. Qestion 66 Does the plan permit each participant or beneficiary to designate any participating primary care provider who is available to accept the participant or beneficiary?... If a grop health plan, or a health insrance isser offering grop health insrance coverage, reqires or provides for designation by a participant or beneficiary of a participating primary care provider, then the plan or isser mst permit each participant or beneficiary to designate any participating primary care provider who is available to accept the participant or beneficiary. See 29 CFR A(a)(1)(i). Qestion 67 Does the plan provide a notice informing each participant of the terms of the plan or health insrance coverage regarding designation of a primary care provider?... If a grop health plan or health insrance isser reqires the designation by a participant or beneficiary of a primary care provider, the plan or isser mst provide a notice informing each participant of the terms of the plan or health insrance coverage regarding designation of a primary care provider that any participating primary care provider who is available to accept the participant or beneficiary can be designated. See 29 CFR A(a)(4)(i)(A). Tip: This notice mst be provided any time the plan provides a participant with an SPD or other similar description of benefits nder the plan. See 29 CFR A(a)(4)(ii). Qestion 68 With respect to a child, does the plan permit the participant or beneficiary to designate a physician who specializes in pediatrics as the child s primary care provider if the provider participates in the network of the plan or isser and is available to accept the child?... If a grop health plan, or a health insrance isser offering grop health insrance coverage, reqires or provides for the designation of a participating primary care provider for a child by a participant or beneficiary, the plan or isser mst permit the participant or beneficiary to designate a physician (allopathic or osteopathic) who specializes in pediatrics as the child s primary care provider if the provider participates in the network of the plan or isser and is available to accept the child. See 29 CFR A(a)(2)(i). 55

71 Qestion 69 With respect to a child, does the plan provide a notice informing each participant of the terms of the plan or health insrance coverage regarding designation of a primary care provider and the right to designate any participating physician who specializes in pediatrics as the primary care provider?... If a grop health plan or health insrance isser reqires the designation by a participant or beneficiary of a primary care provider, the plan or isser mst provide a notice informing each participant of the terms of the plan or health insrance coverage regarding designation of a primary care provider with respect to a child, that any participating physician who specializes in pediatrics can be designated as the primary care provider. See 29 CFR A(a)(4)(i)(B). Tip: This notice mst be provided any time the plan provides a participant with an SPD or other similar description of benefits nder the plan. See 29 CFR A(a)(4)(ii). Qestion 70 Does the plan provide coverage for OB/GYN care provided by a participating health care professional who specializes in obstetrics or gynecology for a female participant or beneficiary withot reqiring athorization or referral by the plan, isser, or any person (inclding a primary care provider)?... For prposes of this provision, a health care professional who specializes in obstetrics or gynecology is any individal (inclding a person other than a physician) who is athorized nder applicable State law to provide obstetrical or gynecological care. The plan or isser may reqire sch a professional to agree to otherwise adhere to the plan s or isser s policies and procedres, inclding procedres regarding referrals and obtaining prior athorization and providing services prsant to a treatment plan (if any) approved by the plan or isser. See 29 CFR A(a)(3)(i)(A). A plan or isser mst treat the provision of OB/GYN care, and the ordering of related OB/ GYN items and services, by a participating health care professional who specializes in obstetrics or gynecology as the athorization of the primary care provider. See 29 CFR A(a)(3)(i)(B). Qestion 71 Does the plan provide a notice informing each participant of the terms of the plan or coverage regarding designation of a primary care provider and that the plan may not reqire athorization or referral for obstetrical or gynecological care by a participating health care professional who specializes in obstetrics or gynecology?... If a grop health plan or health insrance isser reqires the designation by a participant or beneficiary of a primary care provider, the plan or isser mst provide a notice informing each participant of the terms of the plan or health insrance coverage regarding designation of a primary care provider that the plan may not reqire athorization or referral for obstetrical or gynecological 56

72 care by a participating health care professional who specializes in obstetrics or gynecology. See 29 CFR A(a)(4)(i)(C). Tip: This notice mst be provided anytime the plan provides a participant with an SPD or other similar description of benefits nder the plan. See 29 CFR A(a)(4)(ii). 2. Coverage of Emergency Services Qestion 72 Does the plan provide any benefits with respect to services in an emergency department of a hospital?... If the answer is no, enter N/A for the following qestions and proceed to SECTION I. Note: Small grop insred plans are reqired to cover essential health benefits, which inclde emergency services. If the answer to ALL of the qestions below is yes the plan is in compliance with the coverage of emergency services provisions of the rles regarding patient protections. Qestion 73 Does the plan provide coverage of emergency services withot the need for any prior athorization determination, even if the emergency services are provided on an ot-of-network basis?... A plan or isser sbject to the reqirements of this section mst provide coverage for emergency services withot the need for any prior athorization determination, even if the emergency services are provided on an ot-ofnetwork basis. See 29 CFR A(b)(2)(i). Qestion 74 Does the plan provide coverage of emergency services withot regard to whether the health care provider frnishing the emergency services is a participating network provider with respect to the services?... A plan or isser sbject to the reqirements of this section mst provide coverage for emergency services withot regard to whether the health care provider frnishing the emergency services is a participating network provider with respect to the services. See 29 CFR A(b)(2)(ii). Qestion 75 Does the plan provide coverage of emergency services provided ot-of-network withot imposing any administrative reqirement or limitation on coverage that is more restrictive than the reqirements that apply to emergency services provided in-network?... If the emergency services are provided ot-of-network, the plan mst provide the emergency services withot imposing any administrative reqirement or limitation on coverage that is more restrictive than the reqirements 57

73 or limitations that apply to emergency services received from in-network providers. See 29 CFR A(b)(2)(iii). Qestion 76 When providing emergency services ot-of-network, does the plan impose cost-sharing reqirements that comply with the reqirements of the interim final reglations?... Any cost-sharing reqirement expressed as a copayment amont or coinsrance rate imposed with respect to a participant or beneficiary for otof-network emergency services cannot exceed the cost-sharing reqirement imposed with respect to a participant or beneficiary if the services were provided in-network. However, a participant or beneficiary may be reqired to pay, in addition to the in-network cost sharing, the excess of the amont the ot-of-network provider charges over the amont the plan or isser is reqired to pay nder this section. See 29 CFR A(b)(3)(i). A plan or isser complies with the reqirements if it provides benefits with respect to an emergency service in an amont eqal to the greatest of the following three amonts (which are adjsted for in-network cost-sharing reqirements): (A) The amont negotiated with in-network providers for the emergency service frnished, exclding any in-network copayment or coinsrance imposed. (See 29 CFR A(b)(3)(i)(A) for more detailed information, inclding how to determine this amont if there is more than one amont negotiated with in-network providers for the emergency service.) (B) The amont for the emergency service calclated sing the same method the plan generally ses to determine payments for ot-ofnetwork services (sch as the sal, cstomary, and reasonable amont), exclding any in-network copayment or coinsrance imposed. See 29 CFR A(b)(3)(i)(B). (C) The amont that wold be paid nder Medicare for the emergency service, exclding any in-network copayment or coinsrance imposed. See 29 CFR A(b)(3)(i)(C). Tip: Any other cost-sharing reqirement, sch as a dedctible or ot-of-pocket maximm, may be imposed with respect to ot-of-network emergency services only if the cost-sharing reqirement generally applies to ot-of-network benefits. See 29 CFR A(b)(3)(ii). 58

74 Qestion 77 Does the plan provide coverage of emergency services withot regard to any other term or condition of the coverage, other than the exclsion or coordination of benefits, a permissible affiliation or waiting period, or applicable cost-sharing reqirements?... A plan or isser sbject to the reqirements of this section mst provide coverage for emergency services withot regard to any other term or condition of the coverage, other than the exclsion or coordination of benefits, an affiliation or waiting period permitted nder part 7 of ERISA, part A of title XXVII of the PHS Act, or chapter 100 of the Internal Revene Code, or applicable cost sharing. See 29 CFR A(b)(2)(v). SECTION I. Determining Compliance with the Affordable Care Act Coverage of Preventive Services Provisions in Part 7 of ERISA Note: This provision is applicable for plan years beginning on or after Sept. 23, This provision does not apply to grandfathered health plans. Grop health plans and health insrance issers mst provide coverage for, and mst not impose cost-sharing reqirements with respect to, certain recommended preventive services. Nothing prevents plans or issers from providing coverage for preventive items and services in addition to the recommended preventive services reqired nder these reglations. See 29 CFR (a)(1) & (a) (5). A complete list of recommendations and gidelines that inclde services that are reqired to be covered nder these interim final reglations can be fond at HealthCare.gov/center/reglations/prevention.html. Any changes to or new recommendations and gidelines will be noted at this site. Plans mst cover any new recommended service within one year after the date the recommendation or gidance is issed. Therefore, by visiting the site once per year, plans and issers will have straightforward access to all the information necessary to determine any additional items and services that mst be covered withot cost-sharing and any items or services that are no longer reqired to be covered. If the answer to ALL of the qestions below is yes the plan is in compliance with the rles regarding preventive services. Qestion 78 Does the plan provide coverage withot imposing any costsharing reqirements for evidence-based items or services that have in effect a rating of A or B in the crrent recommendations of the United States Preventive Services Task Force?... Plans and issers mst provide coverage for evidence-based items or services that have in effect a rating of A or B in the crrent recommendations of the United States Preventive Services Task Force. See 29 CFR (a) (1)(i). 59

75 Note: Recommendations of the United States Preventive Services Task Force regarding breast cancer screening, mammography, and prevention issed in or arond November 2009 are not considered to be crrent. Qestion 79 Does the plan provide coverage withot imposing any cost-sharing reqirements for immnizations for rotine se in children, adolescents, and adlts that have in effect a recommendation from the Advisory Committee on Immnization Practices of the Centers for Disease Control and Prevention?... For the prpose of this section, a recommendation from the Advisory Committee on Immnization Practices of the Centers for Disease Control and Prevention is considered in effect after it has been adopted by the Director of the Centers for Disease Control and Prevention, and a recommendation is considered to be for rotine se if it is listed on the Immnization Schedles of the Centers for Disease Control and Prevention. See 29 CFR (a)(1)(ii). Qestion 80 With respect to infants, children, and adolescents, does the plan provide coverage withot imposing any cost-sharing reqirements for evidence-informed preventive care and screenings provided for in comprehensive gidelines spported by the Health Resorces and Services Administration?... With respect to infants, children, and adolescents, a plan or isser mst provide coverage for evidence-informed preventive care and screenings provided for in comprehensive gidelines spported by the Health Resorces and Services Administration. See 29 CFR (a)(1)(iii). Qestion 81 With respect to women, does the plan provide coverage withot imposing any cost-sharing reqirements for evidence-informed preventive care and screenings provided for in comprehensive gidelines spported by the Health Resorces and Services Administration?... A complete list of gidelines that are reqired to be covered can be fond at: hrsa.gov/womensgidelines/. (Note: there is a limited exception for certain employers regarding coverage for certain women s preventive services; see dol.gov/ebsa/healthreform for pdated gidance). With respect to women, a plan or isser mst provide coverage for evidenceinformed preventive care and screenings provided for in comprehensive gidelines spported by the Health Resorces and Services Administration. See 29 CFR (a)(1)(iv). 60

76 Qestion 82 Does the plan provide coverage for office visits withot imposing cost sharing reqirements when recommended preventive services are not billed separately from an office visit and is the primary prpose of the office visit?... If a recommended preventive service or item is not billed separately (or is not tracked as individal enconter data separately) from an office visit and the primary prpose of the office visit is the delivery of sch a service or item, then a plan or isser may not impose cost-sharing reqirements with respect to the office visit. See 29 CFR (a)(2)(ii). Tip: If a recommended preventive service is billed separately from an office visit, or if the recommended preventive service is not billed separately and the primary prpose of the office visit is not delivery of the recommended preventive service, then a plan or isser may impose cost-sharing with respect to the office visit. See 29 CFR (a)(2)(i) & (iii). Additional tips: Plans and issers that have a network of providers are not reqired to provide coverage for and may impose cost-sharing reqirements for recommended preventive services delivered by an ot-of-network provider. See 29 CFR (a)(3). Plans and issers may se reasonable medical management techniqes to determine the freqency, method, treatment, or setting for the recommended preventive services to the extent these are not specified in the recommendations or gidelines. See 29 CFR (a)(4). Plans and issers can impose cost-sharing for a treatment that is not a recommended preventive service nder these reglations, even if the treatment reslted from a recommended preventive service. See 29 CFR (a)(5) and ACA Implementation FAQs Part XII Q5. SECTION J. Determining Compliance with the Affordable Care Act Provisions Regarding Internal Claims and Appeals and External Review in Part 7 of ERISA The internal claims and appeals and external review provisions of Part 7 of ERISA do not apply to grandfathered health plans. Note: There have been several phases of gidance issed regarding the internal claims and appeals and external review provisions nder the Affordable Care Act. More information abot the reqirements regarding internal claims and appeals and external review processes nder ERISA is available at dol.gov/ebsa. 61

77 1. Internal Claims and Appeals Under the Affordable Care Act grop health plans and health insrance issers offering grop health insrance coverage were reqired to implement an effective internal claims and appeals process for plan years beginning on or after September 23, In general, the interim final reglations reqire plans and issers to comply with the DOL claims procedre rle nder 29 CFR and impose specific additional reqirements and inclde some clarifications (referred to as the additional standards for internal claims and appeals). In addition to meeting the following reqirements, the plan is reqired to comply with all of the reqirements of the DOL claims procedre rle nder 29 CFR The following qestions have been developed to assist in determining compliance with the additional standards for internal claims and appeals processes and is not intended to determine compliance with the DOL claims procedre rle. Qestion 83 Does the plan provide internal claims and appeals processes with respect to rescissions of coverage?... Under the DOL claims procedre rle, adverse benefit determinations eligible for internal claims and appeals processes generally inclde denial, redction, or termination of, or a failre to provide or make a payment (in whole or in part) for a benefit (inclding a denial, redction, termination, or failre to make a payment based on the imposition of a preexisting condition exclsion, a sorce of injry exclsion, or other limitation on covered benefits). See 29 CFR (m)(4). The Department s reglations broaden the DOL claims procedre rle s definition of adverse benefit determination to inclde rescissions of coverage. Therefore, rescissions of coverage are also eligible for internal claims and appeals processes, whether or not the rescission has an adverse effect on any particlar benefit at the time of an appeal. See 29 CFR (a)(2)(i); 29 CFR This provision is applicable for plan years beginning on or after September 23, See 29 CFR (g). Qestion 84 Does the plan provide claimants with any new or additional evidence or rationale considered in connection with a claim?... The Department s reglations clarify that plans or issers mst provide to claimants, free of charge, any new or additional evidence considered, relied pon, or generated by (or at the direction of) the plan or isser in connection with a claim. This evidence mst be provided as soon as possible and sfficiently in advance of the date on which the notice of final internal 62

78 adverse benefit determination is reqired to be provided in order to give the claimant a reasonable opportnity to respond prior to that date. Similarly, before a plan or isser can isse a final internal adverse benefit determination based on a new or additional rationale, the claimant mst be provided, free of charge, with the rationale. This rationale mst be provided as soon as possible and sfficiently in advance of the date on which the notice of final internal adverse benefit determination is reqired to be provided in order to give the claimant a reasonable opportnity to respond prior to that date. See 29 CFR (b)(2)(ii)(C). This provision is applicable for plan years beginning on or after September 23, See 29 CFR (g). Qestion 85 Does the plan ensre that claims and appeals are adjdicated in a manner that maintains independence and impartiality of decision making?... The Department s reglations clarify that plans or issers mst ensre that all claims and appeals are adjdicated in a manner designed to ensre the independence and impartiality of the persons involved in making the decision. Accordingly, decisions regarding hiring, compensation, termination, promotion, or other similar matters with respect to any individal (sch as a claims adjdicator or medical expert) mst not be made based pon the likelihood or perceived likelihood that the individal will spport or tend to spport a denial of benefits. See 29 CFR (b)(2)(ii)(D). This provision is applicable for plan years beginning on or after September 23, See 29 CFR (g). Qestion 86 Complete the following qestions to ensre that the plan complies with the additional content reqirements for any notice of adverse benefit determination or final internal adverse benefit determination: 86a. Does the plan or isser ensre that any notice of adverse benefit determination or final internal adverse benefit determination incldes information sfficient to identify the claim involved?... The Department s reglations provide that plans and issers mst ensre that any notice of adverse benefit determination or final internal adverse benefit determination incldes information sfficient to identify the claim involved inclding the date of service, the health care provider, and the claim amont (if applicable), and a statement describing the availability, pon reqest, of the diagnosis code and its corresponding meaning, and the treatment code, and its corresponding meaning. See 29 CFR (b)(2)(ii)(E)(1). This provision is applicable for plan years beginning on or after Jly 1, See T.R at dol.gov/ebsa/newsroom/tr11-01.html. 63

79 Plans or issers mst also provide to participants and beneficiaries, as soon as practicable, pon reqest, the diagnosis and treatment codes (and their meanings), associated with any adverse benefit determination or final internal adverse benefit determination. The plan or isser mst not consider a reqest for sch diagnosis and treatment information, in itself, to be a reqest for an internal appeal or external review. See 29 CFR (b)(2)(ii)(E) (1), as amended. This provision is applicable for plan years beginning on or after Janary 1, See T.R at dol.gov/ebsa/newsroom/tr html. 86b. Does the plan or isser ensre that any notice of adverse benefit determination or final internal adverse benefit determination incldes an adeqate description of the reasons for the adverse benefit determination or final internal adverse benefit determination?... The Department s reglations provide that plans and issers mst ensre that the reasons for the adverse benefit determination or final internal adverse benefit determination incldes the denial code and its corresponding meaning, as well as a description of the standard that was sed in denying the claim. In the case of a notice of final internal adverse benefit determination, this description mst inclde a discssion of the decision. See 29 CFR (b)(2)(ii)(E)(3). This provision is applicable for plan years beginning on or after Jly 1, See T.R at dol.gov/ebsa/newsroom/tr11-01.html. 86c. Does the plan or isser ensre that any notice of adverse benefit determination or final internal adverse benefit determination incldes a description of available internal appeals and external review processes?... The Department s reglations provide that plans and issers mst provide a description of available internal appeals and external review processes, inclding information regarding how to initiate an appeal. See 29 CFR (b)(2)(ii)(E)(4). This provision is applicable for plan years beginning on or after Jly 1, See T.R at dol.gov/ebsa/newsroom/tr11-01.html. 86d. Does the plan or isser ensre that any notice of adverse benefit determination or final internal adverse benefit determination disclose the availability of, and contact information for, any applicable office of health insrance consmer assistance or ombdsman established nder PHS Act section 2793?... The Department s reglations provide that plans and issers mst disclose the availability of, and contact information for, any applicable office of health insrance consmer assistance or ombdsman established nder PHS Act section 2793 to assist enrollees with the internal claims and appeals and external review processes. See 29 CFR (b)(2)(ii)(E)(5). 64

80 An pdated list of the State Consmer Assistance Programs is available on the Department of Labor Website at dol.gov/ebsa/cappdatelist.doc. These provisions are applicable for plan years beginning on or after Jly 1, See T.R at dol.gov/ebsa/newsroom/tr11-01.html. Qestion 87 Does the plan defer to the attending provider as to whether a claim involves rgent care and provide notice regarding sch rgent care claim as reqired?... As nder 29 CFR (f)(2)(i), plans or issers mst notify a claimant of a benefit determination (whether adverse or not) with respect to a claim involving rgent care as soon as possible, taking into accont the medical exigencies, bt not later than 72 hors after the receipt of the claim by the plan or isser. 29 CFR (b)(2)(ii)(B), as amended. The determination as to whether a claim involves rgent care is determined by the attending provider and the plan or isser mst defer to sch determination. See 29 CFR (b)(2)(ii)(B), as amended. This provision is applicable for plan years beginning on or after Janary 1, See T.R at dol.gov/ebsa/newsroom/tr11-01.html. Qestion 88 Does the plan comply with the reqirements regarding deemed exhastion of internal claims and appeals processes?... In the case of a plan or isser that fails to adhere to all the reqirements of the Interim Final Rles relating to the Internal Claims and Appeals process with respect to a claim, the claimant is deemed to have exhasted the internal claims and appeals process. The internal claims and appeals process will not be deemed exhasted as long as the violation was: de minims, does not case, and is not likely to case, prejdice or harm to the claimant, attribtable to good case or de to matters beyond the control of the plan or isser, in the context of an ongoing, good faith exchange of information between the plan and the claimant, and is not reflective of a pattern or practice of noncompliance. See 29 CFR (b)(2)(ii)(F), as amended. In the event that the claimant reqests a written explanation of the violation, the plan or isser mst provide sch explanation within 10 days, inclding a specific description of its bases, if any, for asserting that the violation shold not case the internal claims and appeals process to be deemed exhasted. See 29 CFR (b)(2)(ii)(F), as amended. In the case that the external review rejects the claimant s immediate review, the plan mst provide the claimant notice of the opportnity to resbmit and prse the internal appeal of the claim. This notice mst be sent within a reasonable time after the external reviewer rejects the claim for immediate review, not later than 10 days. See 29 CFR (b)(2)(ii)(F), as amended. 65

81 These provisions are applicable for plan years beginning on or after Janary 1, See T.R at dol.gov/ebsa/newsroom/tr11-01.html. Qestion 89 Does the plan provide cltrally and lingistically appropriate notices in a conty that meets the applicable threshold?... The Department s reglations provide that plans and issers mst provide relevant notices in a cltrally and lingistically appropriate manner. The Department s reglations establish a single threshold with respect to the percentage of people who are literate only in the same non-english langage for both the grop and individal markets. With respect to plans and issers, the threshold percentage is set at 10 percent or more of the poplation residing in the claimant s conty, as determined based on American Commnity Srvey (ACS) data pblished by the United States Censs Brea. The list of conties determined to meet the threshold is available at cms.gov/cciio/resorces/fact-sheets-and-faqs/downloads/2013-clasdata.pdf. This list will be pdated annally. See 29 CFR (e) (3), as amended. If the answer to this qestion is Yes, proceed to qestion 90. If the answer is No, proceed to the next section. Qestion 90 Does the plan provide notices in a cltrally and lingistically appropriate manner with respect to internal claims and appeals processes? To meet this reqirement the plan or isser mst: v inclde a one-sentence statement in the relevant non-english langage abot the availability of langage services on each notice sent to an address in a conty that meets the threshold; v provide, pon reqest, a notice in any applicable non-english langage; and v provide a cstomer assistance process (sch as a telephone hotline) with oral langage services in the non-english langage and provide written notices in the non-english langage pon reqest. See 29 CFR (e), as amended. The translated statements are available at dol.gov/ebsa/iabdmodelnotice2. doc. These provisions are applicable for plan years beginning on or after Janary 1, See T.R at dol.gov/ebsa/newsroom/tr11-01.html. 66

82 2. External Review Plans and issers mst comply with either a State external review process or the Federal external review process. The external review provisions of Part 7 of ERISA do not apply to grandfathered health plans. The following qestions have been developed to assist in determining compliance with the rles regarding the external review processes. Qestion 91 Is the plan sbject to the reqirements of a State external review process or the HHS-Administered Federal External Review Process?... Non-grandfathered, self-insred grop health plans sbject to ERISA and the Code: v Generally follow reqirements of the private accredited IRO process (established by TR , modified by TR ). Non-grandfathered, insred coverage: v Generally, issers mst follow the State process if the external review process meets either the NAIC-Similar or NAIC-Parallel process as determined by HHS. v However, issers in States withot a conforming State process and selfinsred non-federal governmental plans may either: Utilize the private accredited IRO process (established by TR , and modified by TR ); or Utilize the HHS-Administered Federal External Review Process. Backgrond information regarding external review processes for insred plans: For insred coverage, HHS has determined which State external review processes meet the minimm reqirements to apply to issers in those States. See cms.gov/cciio/resorces/files/external_appeals.html. If yo answered Yes to Qestion 91 above, STOP. The plan is not sbject to the DOL Private Accredited IRO process. If yo answered No to Qestion 91 above, contine to Qestion

83 Qestion 92 DOL Private Accredited IRO process: Does the plan provide external review for the reqired scope of adverse benefit determinations?... Under the Department s reglations the scope of the Federal external review process applies to: An adverse benefit determination, inclding a final internal adverse benefit determination, by a plan or isser that involves medical jdgment, inclding bt not limited to those based on the plan s or isser s reqirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit; or its determination that a treatment is experimental or investigational; and A rescission of coverage (regardless of whether or not the rescission has any effect on any particlar benefit at that time). See 29 CFR (d) (1)(ii), as amended. An adverse benefit determination that relates to a participant s or beneficiary s failre to meet the reqirements for eligibility nder the terms of a grop health plan (i.e., worker classification or similar isse) is not within the scope of the Federal external review process. See 29 CFR (d)(1)(i), as amended. Qestion 93 DOL Private Accredited IRO process: Does the plan provide an effective external review process?... Self-insred coverage sbject to ERISA and the Code may either comply with the standards of the private accredited IRO process or volntarily comply with a State external review process if the State allows access. If the plan is complying with the private accredited IRO process, ensre the plan complies with all of the standards articlated in TR inclding: v Providing effective written notice of external review v Providing limits related to filing fees v Providing claimant at least 4 months to file for external review v Reqiring that IROs mst be accredited v Reqiring that IROs may not have conflicts of interest that inflence independence v Providing that IRO decisions are binding on the insrer and the claimant v Reqiring IROs to maintain written records for at least three years Department of Labor clarified in TR that to be eligible for a safe harbor from enforcement from the Department of Labor and the IRS (as previosly set forth in sb-reglatory gidance issed in ACA FAQs Part 1 on September 20, 2010), self-insred plans will be reqired to contract with at least three IROs by Jly 1, See TR at dol.gov/ebsa/pdf/acatechnicalrelease pdf, and TR at dol.gov/ebsa/newsroom/tr11-02.html. 68