To:
Lockton Account Teams
Subject:
Overview of the Wrap Plan Amendment Process
Date:
Sept. 1, 2015
Background
Prior Model Amendments for PPACA:
This is the fourth model amendment to the Lockton model wrap plan, for the PPACA. The first three, and
what they were designed to accomplish are discussed at the end of this document.
This is the second model amendment to the HuschBlackwell model wrap plan for PPACA. The first
amendment and what it was designed to accomplish are discussed at the end of this document.
This Model Wrap Plan Amendment:
This new model wrap plan amendment does two main things: First, it clarifies some provisions, adds a
definition of “PPACA,” and makes other minor conforming changes. One change we think many employers will
want is a change that defers the beginning of the COBRA coverage period to the end of the stability period (or
the following stability period) during which the employee moves from full-time to part-time or per diem status.
Second, it allows for changes to the component program and eligibility appendices, for plan sponsors who
added, deleted or modified coverage options, and/or who modified eligibility rules, for the employer mandate
or for other reasons.
There are two versions of this model amendment, a short form version, that includes only the first
category of changes, and a long form version, that includes the first and second categories.
In both cases you’ll want to include in the packet, for the client, the PPACA Policy for Full-Time Employee
Determinations (and, for customers who want to get very specific about things like measurement,
administrative and stability periods, the detailed optional Appendix to that Policy).
Which Amendment Do You Use?
If the plan sponsor did not add, delete or
Use:
modify coverage options for the ACA’s
The short form amendment…and
employer mandate, or modify eligibility rules for
The PPACA Policy for Full-Time Employee
the employer mandate:
Determinations (and optional Appendix)
If the plan sponsor did add, delete or modify
coverage options for the ACA’s employer
mandate, or modify eligibility rules for the
employer mandate, so that the wrap plan’s
component program and/or eligibility
appendices need modifying:
Use:
The long form amendment…and
The PPACA Policy for Full-Time Employee
Determinations (and optional Appendix)
How Do I Know If My Client Has a Lockton or HuschBlackwell Wrap Plan?
Most of you know whether your client has a wrap plan. You can determine if it’s a HuschBlackwell document
by looking at the lower left corner of each page; HuschBlackwell documents have a unique footer there, the
Lockton wrap does not.
If you’re not sure whether your client has a wrap plan, you should ask. In addition, we’re compiling a list of
customers, by office, who we believe have a Lockton or HuschBlackwell wrap plan. When that list is completed
we will post it to the Wrap and Cafeteria Plan Amendment Resource Page. But at best it will be an imperfect
list; we don’t necessarily know, for example, whether a client for whom we or HuschBlackwell prepared a
wrap has actually adopted it.
How Do I Begin the Amendment Process?
First, identify which of your clients have a Lockton or HuschBlackwell wrap plan.
Next, watch the Brainshark presentation addressing how to amend the plans. The presentation will last about
an hour, and you’ll want to have downloaded the long form version of an amendment, to refer to as you work
through the training presentation.
For short form amendments, you should have no trouble preparing them. We’ll help you with the long form
amendments until you get comfortable with those. Happily, most clients will only need the short form
amendment.
We’re happy to train your account team colleagues en masse, in a live training session (assuming your
schedule and ours permits) or in a webcast. But start with the Brainshark presentation…it’s rather thorough.
Then send your draft amendment to the client for review (you might want to send the first several to us for
review, just to ensure you have the hang of things). Aim to have the amendment adopted by the end of the
first plan year to which the employer mandate applied to the employer.
What’s the Model Cafeteria Plan Amendment Referred to in the Brainshark Presentation,
and Posted to the Wrap and Cafeteria Plan Amendment Resource Page?
For clients with a Lockton or HuschBlackwell model cafeteria plan, this model amendment adds three new
cafeteria plan “qualifying events” authorized by the IRS, related to employees leaping from the employer’s
plan to an individual policy in a public health insurance exchange or “marketplace.” It also offers some
language to deal with eligibility of same-sex spouses.
The cafeteria plan model amendment should be adopted by the end of this year (by December 31, 2015).
In Case You Were Wondering About Prior ACA Amendments to the Lockton Model Wrap
Plan
Clients whose Lockton wrap plans pre-date 2011 should have all three prior ACA-related amendments in place.
If they are not in place, it might be best for the client to simply restate its wrap plan on the current
HuschBlackwell template. The prior amendments include:
First Amendment (pushed in Dec. 2010, for wrap plans delivered prior to 2011)
Addressed restrictions on retroactive rescissions
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Added language asserting grandfathered status, as an optional plan provision
Slightly modified the nondiscrimination provisions
Overhauled the claims and appeals language, with the new PPACA-compliant language
contingent on loss of grandfathered status (the new claim rules only apply to nongrandfathered plans)
Added language to address changes in permissible lifetime maximums to allow for integration
of lifetime treatment maximums across coverage options.
Second Amendment (pushed in Aug. 2011, for Lockton wrap plans delivered prior to that date)
Updates claims and appeals language for certain particulars in additional federal guidance;
applies to non-grandfathered plans
Third Amendment (pushed in June, 2012, for Lockton wrap plans delivered prior to that date)
Added language relating to MLR rebates
In Case You Were Wondering About the Prior ACA Amendment to the HuschBlackwell
Model Wrap Plan
First Amendment (pushed in June, 2012, for HuschBlackwell wrap plans delivered prior to that date)
Added language relating to MLR rebates
Questions?
We’re just an email or telephone call away.
[email protected]
[email protected]
[email protected]
[email protected]
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