January 6, 2011 – Notice Requirements For HRAs Obtaining Waivers
Many employers who sponsor health reimbursement arrangements (HRAs) (and other health plans providing limited benefits) recently applied for waivers from the annual limit restrictions imposed by the Patient Protection and Affordable Care Act. We understand that, in most cases, applications made by calendar year plans have now been approved.
The Department of Health & Human Services (“HHS”) has determined that any group health plan receiving a waiver of the annual limit restrictions must notify participants that the waiver has been obtained. HHS has provided model language to use for such a notice. The model language is available at http://www.healthcare.gov/center/regulations/guidance_limited_benefit_2nd_supp_bulletin_120910.pdf.
According to HHS, if the plan’s plan year begins before February 1, 2011, the notice must be provided by February 7, 2011. Plans with plan years beginning on or after February 1, 2011, must provide the notice as part of any informational or educational materials and in any plan documentation sent to participants.
For HRAs and other plans that have received a waiver for plan years beginning on January 1, 2011, employers need to distribute a notice (e.g., in the form of a letter or memorandum) to all plan participants containing the information contained in the model language. This notice should be sent as soon as possible, but no later than February 7th. For HRAs and other plans with plan years beginning later in the year, the notice should be included in enrollment or plan materials distributed for the new plan year, including the summary plan description. If no such materials are being distributed, we recommend the employer distribute a separate notice containing the information contained in the model language upon receiving approval of the waiver.
Please contact us if you need assistance complying with the notice obligation.
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The information contained in this ALERT is intended for general information purposes only and does not constitute legal advice relative to a specific situation.