Legislative update: reminder about rescission rules

The new Health Care Reform law states that once an enrollee is covered under a health plan, neither the employer nor the health plan may retroactively terminate coverage except in cases of fraud and intentional misrepresentation. Coverage may only be canceled with prior notice to the enrollee. The U.S. Department of Labor has issued guidance that allows time to process terminations in the ordinary course of business.

Penalties are up to $100 per day, so it is essential that employers and health plans comply with these regulations.

Priority Health has adopted the following process to ensure compliance:

• Priority Health must be notified of the exact date of termination within 30 days of the termination date.
• By submitting a termination to Priority Health, the employer is acknowledging that the enrollee has been informed of the loss of coverage as of the date eligibility is to be terminated.
• If you notify Priority Health of a termination more than 30 days after the termination date, you must certify that the affected employee was notified of the loss of coverage at the time eligibility was lost.

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