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The Pension and Welfare Benefits Administration administers the following
health care laws that comprise Part 7 of the Employee Retirement Income
Security Act (ERISA).
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The Health Insurance Portability and
Accountability Act (HIPAA) places limitations on a group health plan’s
ability to impose pre-existing condition exclusions, provides special
enrollment rights for certain individuals, and prohibits
discrimination in group health plans based on health status.
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The Mental Health Parity Act (MHPA)
provides for parity in the application of annual and lifetime dollar
limits on mental health benefits with annual and lifetime dollar
limits on medical/surgical benefits.
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The Newborns’ and Mothers’
Health Protection Act (Newborns’ Act) requires group health plans
that offer maternity hospital benefits for mothers and newborns to pay
for at least a 48-hour hospital stay for the mother and newborn
following childbirth (or, in the case of a cesarean section, a 96-hour
hospital stay), unless the attending provider, in consultation with
the mother, decides to discharge earlier.
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The Women’s Health and Cancer
Rights Act (WHCRA) provides protections for patients who elect breast
reconstruction or certain other follow-up care in connection with a
mastectomy.
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Following are 15 key compliance considerations for group health plans. Under
each is an example of a group health plan provision or practice that would
not comply with the above laws and a tip on how to bring the plan into
compliance. For more information on compliance with these laws, consult Compliance
Assistance Guide: Recent Changes in Health Care Law.
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Example: A group health plan covers treatment for injuries in
connection with an accident only if the accident occurred while the
individual was covered under the plan.
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Tip: This plan provision operates as a
pre-existing condition exclusion and should be removed or modified to comply
with HIPAA’s limitations on pre-existing condition exclusions.
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This plan provision operates as a
pre-existing condition exclusion because only people who were injured
while covered under the plan receive benefits for treatment. People who
were injured while they had no coverage (or while they had other
coverage) do not receive benefits for treatment. Accordingly, this plan
provision limits benefits relating to a condition because the condition
was present before an individual’s enrollment date, and it is
considered a pre-existing condition exclusion.
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To comply with HIPAA, the plan could:
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Delete its requirement that the
accident must occur while the individual is covered under the plan;
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Limit its pre-existing condition
exclusion. Among other things, the only conditions that may be
subject to a pre-existing condition exclusion are those for which
medical advice, care, diagnosis, or treatment was recommended or
received within the 6 months ending on an individual’s “enrollment
date” in the plan. (Under HIPAA, an individual’s “enrollment
date” is the first day of coverage or, if there is a waiting
period, the first day of the waiting period.) In addition, the
maximum pre-existing condition exclusion period is 12 months (or 18
months for late enrollees) after the individual’s “enrollment
date.” The exclusion period must be offset by an individual’s
prior creditable coverage. Also, newborns and adopted children
generally may not be subject to a pre-existing condition exclusion
at all.
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Example: A group health plan imposes a 30-day waiting period from an
individual’s date of hire before coverage will become effective. Then,
after an individual has satisfied this waiting period, the plan imposes a
12-month pre-existing condition exclusion from the individual’s effective
date of coverage (offset by creditable coverage).
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Tip: The pre-existing condition exclusion period
is required to begin on the first day of the waiting period.
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HIPAA requires that the maximum
pre-existing condition exclusion period begin on an individual’s “enrollment
date.” For plans that impose a waiting period, the enrollment date
is generally the first day of the waiting period. (Under HIPAA, an
individual’s “enrollment date” is the first day of coverage or,
if there is a waiting period, the first day of the waiting period.)
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In this example, the plan must begin
counting the 12-month pre-existing condition exclusion period from the
individual’s enrollment date, which in this case is the first day of
the waiting period.
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Example: A group health plan imposes a 12-month
pre-existing condition exclusion. This exclusion is reflected in the plan
document, which is provided to participants upon request.
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Tip: The group health plan must provide general
and individual notices of pre-existing condition exclusion.
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A group health plan that contains a
pre-existing condition exclusion must provide a written general notice
of pre-existing condition exclusion to participants under the plan and
cannot impose such an exclusion with respect to a participant or a
dependent of the participant until such a notice is provided. The
general notice of pre-existing condition exclusion must include:
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A description of the existence and
terms of any pre-existing condition exclusion;
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A description of the rights of
individuals to demonstrate creditable coverage (and any applicable
waiting periods);
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A description of the right of the
individual to request a certificate from a prior plan or issuer, if
necessary; and
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A statement that the current plan
(or issuer) will assist in obtaining a certificate from any prior
plan or issuer, if necessary.
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In addition, after an individual has
presented evidence of creditable coverage and the plan has made a
determination of creditable coverage, if the individual will still be
subject to any pre-existing condition exclusion, the plan must provide
the individual a written notice of the length of pre-existing condition
exclusion that remains after offsetting for prior creditable coverage.
In the individual notice of pre-existing condition exclusion, a plan
must disclose:
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Its determination of any
pre-existing condition exclusion period that applies to the
individual (including the last day on which the pre-existing
condition exclusion applies);
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The basis for such determination,
including the source and substance of any information on which the
plan or issuer relied;
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An explanation of the individual’s
right to submit additional evidence of creditable coverage; and
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A description of any applicable
appeal procedures established by the plan or issuer.
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Example: A plan issues one certificate of creditable coverage for a
participant and the participant’s family. However, the certificate does
not include information about dependents or waiting periods.
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Tip: If a plan imposes a waiting period, the
date the waiting period began is required to be reflected on the
certificate. In addition, if a certificate applies to more than one person
(such as a participant and dependents), the dependents' creditable
coverage information is required to be reflected on the certificate (or
the plan can issue a separate certificate to each dependent).
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Example: A group health plan allows individuals to
enroll through special enrollment for loss of other coverage only if the
loss was due to an involuntary termination of employment.
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Tip: The plan is required to permit individuals
who declined health coverage under the plan because they had other group
health plan or health insurance coverage to enroll in the plan through
special enrollment upon any “loss of eligibility” for the other coverage
or if employer contributions toward the other coverage cease.
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Under HIPAA, individuals who are
otherwise eligible, but had declined health coverage because they had
other group health plan or health insurance coverage, must be
permitted to enroll in the plan (regardless of any late enrollment
provisions) upon “loss of eligibility” for the other coverage or
if employer contributions toward the other coverage cease.
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Loss of eligibility includes loss of
coverage due to legal separation, divorce, voluntary or involuntary
termination of employment, reduction in hours, children’s aging out
of coverage, or moving out of an HMO service area. It does not include
loss of coverage due to a failure of the individual to pay premiums on
a timely basis or termination of coverage for cause.
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Under HIPAA, special enrollment
rights are also triggered when employer contributions toward an
individual’s other coverage cease, regardless of whether the
individual is still eligible for coverage under the other plan.
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Example: A group health plan allows employees who are already
enrolled for coverage to add dependents upon marriage, birth, adoption, and
placement for adoption. However, if an employee is not already enrolled, the
plan does not permit any enrollment when these events occur.
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Tip: HIPAA allows eligible employees and
dependents to enroll upon marriage, birth, adoption, or placement for
adoption.
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Group health plans are required to
offer special enrollment to otherwise eligible employees, spouses, and
any new dependents upon marriage, birth, adoption, or placement for
adoption. Accordingly, an employee who is otherwise eligible, but not
enrolled for coverage, can enroll (and can also enroll a spouse and any
new dependents, if they are otherwise eligible under the plan) when any
of these events occur.
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The plan should amend its special
enrollment provisions to allow employees and dependents who are
otherwise eligible to enroll upon these events.
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Example: After an individual enrolls through special enrollment, a
group health plan makes coverage effective on the first day of the first
calendar month following the date a completed request for enrollment is
received.
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Tip: HIPAA sets forth specific dates when coverage
is required to be made effective for special enrollees. In this case, the
plan is not making coverage effective early enough for some individuals.
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For special enrollment upon birth,
adoption, or placement for adoption, group health plans are required
to make coverage effective as of the date of the birth, adoption, or
placement for adoption. For these events, this plan, in this example,
is not making coverage effective early enough. Therefore, the plan
should change the effective date of coverage provision to comply with
HIPAA.
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On the other hand, for special
enrollment upon loss of eligibility for other coverage, upon loss of
employer contributions toward other coverage, or upon marriage,
coverage is required to be made effective no later than the first day
of the first calendar month following the date a completed request for
enrollment is received. Therefore, the plan’s effective date of
coverage provision is permissible with respect to these special
enrollment events.
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Example: A plan’s special enrollment notice is included in its
summary plan description (SPD), which is sent 90 days after enrollment in
the plan.
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Tip: A plan must provide all employees with a
notice of special enrollment at or before the time the employee is initially
offered the opportunity to enroll in the plan.
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While the SPD is a permissible vehicle
for delivering the special enrollment notice, the plan is also required
to meet the timing rules for providing the special enrollment notice,
even if this time frame is earlier than that for providing an SPD.
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The plan may continue to provide the
notice in the SPD only if it is provided at or before the time of
enrollment in the plan. Otherwise, the plan should provide a separate
notice of special enrollment that meets the required time frame and
continue to provide the SPD within 90 days of enrollment.
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The following model language may be
used to satisfy the special enrollment notice requirement:
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If you are declining enrollment for yourself or your
dependents (including your spouse) because of other health insurance
coverage, you may in the future be able to enroll yourself or your
dependents in this plan, provided that you request enrollment within 30
days after your other coverage ends. In addition, if you have a new
dependent as a result of marriage, birth, adoption, or placement for
adoption, you may be able to enroll yourself and your dependents, provided
that you request enrollment within 30 days after the marriage, birth,
adoption, or placement for adoption. |
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Example: To be eligible for late enrollment, a
group health plan requires employees and dependents to present evidence of
insurability.
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Tip: Plans cannot require individuals (even if they are late
enrollees) to present evidence of insurability in order to enroll for
coverage.
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A group health plan may not deny
individuals enrollment in the plan (or delay the effective date of an
individual’s coverage) based on an individual’s health status,
medical condition (including both physical and mental illnesses),
claims experience, receipt of health care, medical history, genetic
information, evidence of insurability (including conditions arising
out of acts of domestic violence), or disability. Therefore, the plan
must eliminate any evidence of insurability requirement. (Nonetheless,
the plan is generally permitted to impose an 18- month pre-existing
condition exclusion period on late enrollees, if it is offset by
creditable coverage and complies with HIPAA’s other limitations on
pre-existing condition exclusion periods.)
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Example: A plan delays eligibility for benefits
related to a condition for a dependent if the dependent is hospitalized on
the day coverage otherwise becomes effective.
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Tip: Under HIPAA’s nondiscrimination
provisions, a plan cannot make eligibility for benefits under the plan
contingent upon any health factor. In this case, delaying eligibility for
benefits to any individual due to confinement to a hospital would
discriminate in eligibility based on one or more health factors. In
addition, this plan provision is a pre-existing condition exclusion
because it delays benefits for a condition because it was present before
an individual’s effective date of coverage. However, it does not comply
with HIPAA’s limits on pre-existing condition exclusions.
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The plan must delete the nonconfinement
clause. However, the plan is permitted to include a
coordination of benefits provision so that, for example, if a prior
issuer is also responsible for benefits under a State
extension-of-benefits law, benefits will be provided on a coordinated
basis.
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Example: Outpatient benefits for mental health services under a group
health plan consist of 50 doctor visits per year with a $50 maximum payment
per visit. Outpatient benefits for medical/surgical services are unlimited.
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Tip: While the plan does not impose an annual
dollar limit on outpatient medical/surgical benefits, the 50 doctor visits
per year limitation on mental health services, coupled with the absolute $50
maximum payment per visit, is a constructive annual dollar limit on
outpatient mental health benefits of $2,500.
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Under MHPA, a plan may not impose
annual or lifetime dollar limits on mental health benefits that are
lower than those for medical/surgical benefits. Here, the plan is not in
compliance with MHPA because, with respect to outpatient services, the
plan imposes a $2,500 constructive annual dollar limit on mental health
benefits and no annual limit on medical/surgical benefits.
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The plan should eliminate any
constructive dollar limit on mental health benefits that is lower than
that for medical/surgical benefits. The plan can still impose visit
limits under MHPA, provided they are not coupled with absolute dollar
limitations, which would constitute a constructive dollar limit.
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Example: For hospital stays, including those in
connection with childbirth, a group health plan requires preauthorization
from its utilization review telephone hotline, based on a determination of
medical necessity.
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Tip: The plan’s preauthorization requirement is
too broad in that it applies to hospital stays that are the subject of the
Newborns’ Act.
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Under the Newborns’ Act, the plan
may not restrict benefits for a hospital stay in connection with
childbirth to less than 48 hours (96 hours in the case of a cesarean
section), unless the attending provider (in consultation with the mother)
decides to discharge earlier.
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Plans may not require providers to
obtain authorization from the plan for prescribing the stay. In
addition, plans may not deny a stay within the 48-hour (or 96-hour)
period because the plan’s utilization reviewer does not think such a
stay is medically necessary.
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The plan must eliminate this
preauthorization requirement with respect to hospital stays in
connection with childbirth for the first 48 hours (or 96 hours in the
case of a cesarean section). The plan may impose such an authorization
requirement for hospital stays beyond this period. In addition, the plan
may impose a requirement on the mother to give notice of a pregnancy in
order to obtain a certain level of cost-sharing or to use certain
medical facilities. However, the type of preauthorization required by
this plan (within the 48/96 hour period and based on medical necessity)
must be eliminated.
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Example: A group health plan provides benefits for
a hospital length of stay in connection with childbirth for a mother or
newborn. However, the plan’s SPD does not provide any special notice
relating to these benefits.
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Tip: Group health plans that provide maternity or
newborn infant coverage are required to make a disclosure with respect to a
hospital length of stay in connection with childbirth. This is the case
whether the Federal Newborns’ Act provisions or State law provisions apply
to the coverage.
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Specifically, the group health plan’s
SPD must include a statement describing any requirements under Federal
or State law applicable to the plan, and any health insurance coverage
offered under the plan, relating to hospital length of stay in
connection with childbirth for the mother or newborn child. If Federal
law applies in some areas in which the plan operates and State law
applies in other areas, the statement should describe the different
areas and the Federal or State law requirements applicable in each.
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In the case of a group health plan
where Federal law applies to some or all areas in which the plan
operates, the following model language may be used to describe the
requirements of Federal law:
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Group health plans and health insurance issuers
generally may not, under Federal law, restrict benefits for any hospital
length of stay in connection with childbirth for the mother or newborn
child to less than 48 hours following a vaginal delivery, or less than 96
hours following a cesarean section. However, Federal law generally does
not prohibit the mother’s or newborn’s attending provider, after
consulting with the mother, from discharging the mother or her newborn
earlier than 48 hours (or 96 hours as applicable). In any case, plans and
issuers may not, under Federal law, require that a provider obtain
authorization from the plan or the insurance issuer for prescribing a
length of stay not in excess of 48 hours (or 96 hours). |
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Example: A group health plan provides benefits for
mastectomies. However, the plan excludes benefits for reconstructive surgery
after a mastectomy.
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Tip: Plans that cover benefits for mastectomies
cannot exclude benefits for reconstructive surgery or certain
post-mastectomy services.
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Under WHCRA, the plan is required to
provide (to an individual who is receiving benefits in connection with a
mastectomy and who elects breast reconstruction in connection with the
mastectomy) coverage for:
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All stages of reconstruction of
the breast on which the mastectomy has been performed;
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Surgery and reconstruction of the
other breast to produce a symmetrical appearance;
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Prostheses; and
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Treatment of physical
complications of mastectomy, including lymphedemas, in a manner
determined in consultation with the attending physician and the
patient.
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In addition, the plan is required to
notify participants of WHCRA’s coverage requirements upon enrollment
and annually afterwards.
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For a more detailed explanation of
WHCRA’s disclosure requirements and for sample language that may be
used, see Compliance Assistance Guide: Recent Changes in Health Care Law
and Your Rights After a Mastectomy (WHCRA).
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Example: A group health plan provides benefits
required by WHCRA, but is unsure what notices must be provided.
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Tip: The plan should provide an enrollment notice
and an annual notice. These notices can be provided in the SPD if the plan
distributes SPDs upon enrollment and annually. Otherwise, separate WHCRA
notices should be provided once upon enrollment and once each year.
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If you have had or are going to have a mastectomy, you
may be entitled to certain benefits, under the Women’s Health and Cancer
Rights Act of 1998 (WHCRA). For individuals receiving mastectomy-related
benefits, coverage will be provided in a manner determined in consultation
with the attending physician and the patient, for: |
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All stages of reconstruction of the
breast on which the mastectomy was performed;
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Surgery and reconstruction of the
other breast to produce a symmetrical appearance;
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Prostheses; and
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Treatment of physical complications of
the mastectomy, including lymphedemas.
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These benefits will be provided subject to the same
deductible and coinsurance applicable to other medical and surgical benefits
provided under this plan. Therefore, the following deductible and
coinsurance apply: [insert deductible and coinsurance applicable to these
benefits]. |
If you would like more information on WHCRA benefits,
call your Plan Administrator at [insert telephone number]. |
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Do you know that your plan, as required by the Women’s
Health and Cancer Rights Act of 1998, provides benefits for
mastectomy-related services including all stages of reconstruction and
surgery to achieve symmetry between the breasts, prostheses, and
complications resulting from a mastectomy, including lymphedemas? Call your
Plan Administrator at [insert telephone number] for more information. |
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Other Related Publications
on PWBA's Web site:
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Compliance Assistance Guide: Recent
Changes in Health Care Law
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Your Rights after a Mastectomy (WHCRA)
(also in Spanish)
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Health Benefits under the Consolidated
Omnibus Budget Reconciliation Act (COBRA)
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Top Ten Ways to Make Your Health
Benefits Work for You (also in Spanish)
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Questions and Answers: Recent Changes
in Health Care Law (for employees)
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For copies of these and other publications, call
PWBA's Toll-Free Employee & Employer Hotline number, 1.866.444.3272.
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This material constitutes a small entity compliance guide
for purposes of the Small Business Regulatory Enforcement Fairness Act of
1996.
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