With open enrollment fast-approaching for many employers, it is also a good time for employers to take stock of whether they have provided all necessary documents and notices for their health and welfare benefit plans to their employees and plan participants this year. Some of the more important of these documents and notices to consider include:
Summary Plan Description (SPD). Employers must provide an SPD to new plan participants within 90 days after plan coverage begins. An updated SPD must also be furnished every 5 years if changes are made to the SPD or if the plan is amended. If there are no changes, a new SPD must be provided to participants every 10 years.
Summary of Material Modification (SMM). Employers must provide an SMM to health and welfare benefit plan participants when a significant change is made to the plan’s terms or coverage.
Summary of Benefits and Coverage (SBC). The Affordable Care Act requires health plans and health insurance carriers to provide an SBC to employees and participants to explain the benefits offered under the plan. The SBC should be included with plan application materials during open enrollment. If coverage automatically renews for participants, the SBC must be provided no later than 30 days prior to the start of the new plan year.
Summary Annual Report (SAR). Employers that are required to file a Form 5500 must provide participants with a summary of the information contained in the Form 5500—the SAR. The SAR must be provided within 9 months of the close of the plan year. If the employer received a time extension to file the Form 5500, then the SAR is due within 2 months after the close of the extension period.
Medicare Part D Notice. Employers with group health plans that cover prescription drugs must provide an annual notice to Medicare Part D-eligible participants informing them about whether the employer-sponsored prescription drug coverage is “creditable” or “non-creditable.” “Creditable” coverage means that the employer-sponsored coverage is at least as good as Medicare Part D coverage. This notice must be provided when a participant first enrolls in the plan and then annually before October 15th (when Medicare annual open enrollment begins).
Initial COBRA Notice. Employers with 20 or more employees who are subject to COBRA and who sponsor group health plans must provide an initial COBRA notice to new participants and their covered dependents within 90 days after commencement of coverage under the plan. This notice may be included in the plan’s SPD.
Notice of Health Insurance Portability and Accountability Act (HIPAA) Special Enrollment Rights. Employers must provide each eligible employee with this notice at or prior to open enrollment. This notice may be incorporated into the plan’s SPD.
HIPAA Privacy Notice. Employers with self-insured health plans must provide this notice to new participants when they enroll. In addition, at least once every 3 years, employers must either redistribute the HIPAA Privacy Notice or inform participants that the notice is available and how they can procure a copy. In the case of fully-insured plans, the insurance carrier and not the employer is responsible for providing the HIPAA Privacy Notice.
Women’s Health and Cancer Rights Act (WHCRA) Notice. Employers must provide notice to group health plan participants regarding their rights to mastectomy-related benefits under the WHCRA at the time they enroll in the plan and on an annual basis thereafter.
Children’s Health Insurance Program (CHIP) Notice. Employers with group health plans that cover residents in a state that provides a premium subsidy to low-income children and their families to help defray the cost of employer-sponsored health insurance coverage must provide an annual notice about the premium assistance to employees residing in that state.
HIPAA Wellness Program Notice. Employers with health-contingent wellness plans that require individuals to satisfy a standard related to a health factor (e.g., not smoking) in order to obtain a reward must provide employees with a notice disclosing the availability of a reasonable alternative standard (and/or a waiver of the original standard) to qualify for the reward in all plan materials describing the terms of the wellness plan. This notice should be provided to participants before they divulge any health-related information or undergo medical examinations.
Americans with Disabilities Act (ADA) Wellness Program Notice. Employers with 15 or more employees who are subject to the ADA and who have wellness programs that include health-related questions or medical examinations must give participating employees a notice telling them what information will be collected as part of the wellness program, with whom it will be shared (and for what purpose), any limits on disclosure and how the information will be kept confidential. This notice should be provided to participants before they answer any health questions or undergo any medical examinations.
Grandfathered Plan Notice. Employers with a grandfathered health insurance plan must include information about the plan’s grandfathered status in documents describing coverage under the plan, including SPDs and open enrollment materials. Since the Affordable Care Act (ACA) has been in existence since 2010, grandfathered plans are uncommon.
Michelle’s Law Notice. Employers with group health plans that condition dependent eligibility on a child’s full-time student status must provide a notice about Michelle’s Law in plan materials that describe the requirement for certifying student status for plan coverage. Michelle’s Law prevents plans from terminating a child’s coverage due to loss of full-time student status when the change in status is due to a medically necessary leave of absence. Due to the ACA’s requirement that children be eligible for coverage on their parent’s health plan through age 26, plans that condition dependent eligibility on full-time student status and which are therefore subject to Michelle’s Law are rare.
In some cases, employers may choose to rely on a third party (e.g., COBRA administrator, insurance carrier, etc.) to prepare and/or provide some of the notices described above. However, ultimately, the requirement to provide notices falls on the employer, and failure to provide the required notices timely may result in penalties for the employer.