• Fully Insured Group Health Plans May No Longer Provide Discriminatory Benefits
  • November 5, 2010 | Authors: Patricia Eschbach-Hall; Marlene P. Frank; Sarah Heck Griffin; Kirstin D. Poirier-Whitley; Gary G. Short
  • Law Firms: Jones Day - Cleveland Office ; Jones Day - Columbus Office ; Jones Day - Los Angeles Office ; Jones Day - Dallas Office
  • The Patient Protection and Affordable Care Act, as amended (“PPACA”), extends the prohibition against discriminating in favor of highly compensated individuals to nongrandfathered fully insured group health plans, effective for plan years beginning on or after September 23, 2010. This prohibition has long applied to self-insured medical reimbursement plans under Section 105(h) of the Internal Revenue Code (the “Code”). Many employers have used fully insured coverage to avoid the Section 105(h) prohibition but must now reconsider these benefits. This prohibition is implicated in situations as varied as: (i) coverage provided only to management; (ii) management paying a lower premium or receiving benefits in addition to those provided to staff; and (iii) special post-termination continuation coverage provided to management.