A lumber company ignoring ACA regulations and operating its health plan as if it were grandfathered has agreed to settle noncompliance claims with the Department of Labor.
Sierra Pacific Industries Health Plan didn’t comply with the Affordable Care Act and the Employee Retirement Income Security Act when providing healthcare benefits and deciding worker claims for healthcare benefits, the DOL said in a news release.
The DOL investigation found that the plan relinquished its grandfathered status as of Jan. 1, 2013, when changes were made to the plan that barred it from retaining grandfathered status.
Under the ACA, a grandfathered plan is a group health plan or individual health insurance coverage in which an individual was enrolled as of the ACA's enactment on March 23, 2010. Generally, grandfathered plans are able to maintain existing coverage and don’t have to amend their plans to comply with certain ACA regulations, as long as there aren’t changes to the plan’s status.
A plan loses its grandfathered status when any of the following changes become effective:
While grandfathered plans generally maintain existing coverage, there are some aspects of health care reform that grandfathered plans must comply with, including ACA amendments to the Public Health Service Act. Those amendments require that plans provide a summary of benefits and coverage explanation and annual rebates for certain medical loss ratios. They also require plans that cover dependents make coverage available until age 26 and prohibit lifetime limits, recessions and excessive waiting periods.
Not only can noncompliance be costly, it can result in the loss of grandfathered status. As a result of the DOL investigation, Sierra Pacific Industries agreed to comply with the ACA’s requirements for plans that are not grandfathered, including:
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