PPACA: The State of Grace

HHS is encouraging states to provide similar grace periods for state-regulated health insurance, and HHS will not punish a state for failing to substantially enforce the internal appeals provisions in these situations, officials say.

If the grace period did not exist, the internal appeals requirements would have started applying to employer plans Thursday.

The American Benefits Council, Washington, an employers group, is welcoming the technical release.

The new guidance will create an expanded "safe harbor" standard for compliance as well as a grace period, according to James Klein, the council's president.

"As initially issued, the regulations could not feasibly have been implemented for plan years beginning on or after Sept. 23, 2010," Klein says. "The new guidance will help ensure that employers and health plans have much-needed additional time to make complex changes in the procedures they use to make accurate and efficient determinations on hundreds of millions of health care claims each year."

The federal agencies likely will issue more PPACA in early 2011, Klein says.

The American Benefits Council will be working closely with the agencies to try to keep the agencies from imposing costly or undue burdens on employers, Klein says.

Meawnhile, in the FAQs answers, EBSA officials say the Labor Department, the Treasury Department and HHS have received a question about letting some grandfathered group health plans keep grandfathered status — and freedom from some Affordable Care Act requirements — if they change carriers but leave plan provisions roughly the same.

"The departments anticipate that they will shortly address the circumstances under which grandfathered group health plans may change carriers without relinquishing their status as grandfathered health plans," officials say.

Officials also say a plan may able to show that it is complying with the new internal review and external appeal requirements if it can show that it is meeting the same objectives through somewhat different means, officials say.

In a section on minimum provider payment standards and balance billing for out-of-network emergency services, EBSA officials say a new Affordable Care Act provision prohibiting plans and insurers from imposing out-of-network care penalties for emergency care may affect what the plan or insurer owes but not what the patient owes. The plan insurer may have to pay balance billing amounts in same cases and might be able to avoid making those payments in other cases, but "patients must be provided with adequate and prominent notice of their lack of financial responsibility with respect to such amounts, to prevent inadvertent payment by the patient," officials say.