Enacted on August 1, 1975 by the General Assembly of the Commonwealth of Pennsylvania, this act focuses on ensuring the health and welfare of newborn children and their parents by regulating certain aspects of health insurance coverage for newborns.
Valhalla Business Advisors brings tools and resources to clients to support their efforts to provide high impact, cost effective, and compliant employee benefit programs. Included in compliance considerations are steps required under Act 81 for certain Pennsylvania plan-sponsors to administer benefits for newborns.
Summary
Key provisions of Act 81 include:
- Immediate Coverage: Health insurance policies and service contracts provided by nonprofit corporations must include coverage for newborn children from the moment of birth.
- Coverage Details: Coverage for newborns includes treatment for injuries, sickness, congenital defects, birth abnormalities, prematurity, and routine nursery care. However, it may exclude routine well-baby care, immunizations, and non-necessary medical examinations or tests unless already covered for insured or dependent children.
- Notification and Premium Payment: If a specific premium is required for newborn coverage, notification of the birth and payment must be made to the insurer within 31 days after birth to ensure continuous coverage.
- Effective Date and Renewals: The requirements of the act apply to insurance policies, contracts, and group certificates issued or renewed more than 120 days after the effective date of the act.
- Immediate Implementation: The act takes effect immediately upon enactment.
Keep in mind that self-funded plans, under ERISA, are subject to a “deemer clause” that exempts self-funded employer plans from state insurance regulations. In other words, fully insured plans, where the employer purchases insurance policies from an insurer, are subject in the same way to state insurance regulations. In contrast, self-funded plans, where the employer directly pays for employees’ health care needs, are not subject to state insurance regulations due to ERISA preemption. As such, certain self-funded plans may be permitted to opt out of Act 81.
The Valhalla advantage
Valhalla Business Advisors is extremely proud to bring boutique services to clients; As a client, details around topics like state-specific rules like Act 81 can feel complicated; Our team can help you. Feel free to reach out to Stuart or Jens to discuss further!
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Sample Scope of Work
