 |
 |
 |
 |
|
 |
 |
6
LEGAL DISCLAIMER:
Information contained in this publication is not legal
advice, and
should not be construed as legal advice. If you need legal advice upon which you can rely,
you should seek a legal opinion from your attorney.
One question raised by many to which there is no clear understanding or any
guidance is “How does the delayed CBA effective date apply to this Section of the
RB which accelerates certain health reforms?”
The general advice is for collectively bargained plans to be ready to implement the
above reforms by the first plan year beginning on or after October 1, 2010 and
hope you get a delayed date if your plan’s CBA expires at a later date.
UNDOUBTEDLY GUIDANCE WILL BE ISSUED BEFORE THEN. Some plans are
being proactive and complying by the first plan year after October 1, 2010; that is,
January 1, 2011 for calendar year plans.
We note that for plans established on or after March 23, 2010, some have noted
there is no clear guidance on when such plans would have to comply with the
lifetime prohibitions-annual limits/dependent care extension and any other
applicable reforms. It would seem logical for such plans to be compliant upon
establishment, although if the plan was new as of June 1, 2010, some would argue
the plan could wait until the first plan year on or after October 1, 2010 to comply.
Grandfathered Plans and the Extension of Dependent Coverage
The general discussion of the compliance date for grandfathered plans
would also
apply to the extension of dependent care coverage. Section 2301(a)
of the RB
amends Section 1001 of the PPACA, which contains PHSA
2714 extending
dependent coverage to age 26, even if the “child” is married. HOWEVER,
before
January 1, 2014, this extension only applies if the dependent is NOT
eligible to
enroll in different employer-sponsored health plan. This “other coverage
availability” limitation does not apply after January 11, 2014.
Section 1004 of the RB makes changes to the Code requirements for providing tax-
free health care coverage to dependents and extends the tax-free nature of such
benefits to age 27, the VEBA extension is at Subsection XX. Section 1004 allows
health plans to cover the dependent until the end of the year the dependent turns
age 26 with no adverse tax consequences.
According to an
answer at
if a
dependent has aged out of coverage and is still under 26, he/she must be given a
chance to be covered again by the plan on the applicable effective date that the
dependent care extension applies. Guidance will be needed on how this is to be
accomplished. Plans may have the duty to offer to re-enroll such aged dependents.
Conclusion
Guidance is needed for these issues and more. According to published reports and
“insider” scuttlebutt, the responsible federal agencies are working feverishly to get
guidance out. All plans can do until then is “sit tight” and prepare for the worst –
compliance by the first plan year on or after October 1, 2010 for these reforms.
*
*
*