Health Insurance compliance for Employers is highly-regulated. Group Health Plans are not only required to comply with the Employee Retirement Income Security Act (“ERISA”), but must also comply with regulations set by the Department of Labor (“DOL”) and numerous other laws that impact an employee’s health benefits. These laws set out standards under which group health plans must operate and create various disclosures that employees must receive. This blog focuses on navigating through many of these disclosures and understanding the significance of the timeframes for distribution; the lists below are not exhaustive.
First, it is important to note that under ERISA Employers are required to have a Plan Document and Summary Plan Description (“SPD”) for their group health plans. Regarding the SPD, ERISA sets specific guidelines for this document. See 29 CFR 2520.102-3. A strict timeframe is also imposed for an SPD as it must be automatically given to participants within 90 days of becoming covered by a plan.
When creating a Plan Document and SPD, Employers should look to this compliance chart.
Section two of this chart provides a guide for necessary disclosures in a group health plan. The chart provides a summary of each required disclosure and specifies the timeframe in which each notice should be given. It is important to consider the notices Employers must distribute at the outset of coverage and annually. Some of these disclosures can or must be in the SPD, while others must be separate from the SPD.
Include in the SPD
- The Initial COBRA Notice is required when group health plan coverage commences. This should be included in the SPD because ERISA requires that the SPD include “a description of the rights and obligations of participants and beneficiaries with respect to continuation coverage.” 29 CFR 2520.102-3. Model language can be found in this document.
- The Wellness Program Disclosure* is required in all plan materials that describe the terms of a health contingent wellness program. However, the DOL also notes that if the plan materials merely mention that a program is available, without describing its terms, this disclosure is not required. Thus, this disclosure should be provided in the SPD if the SPD includes and describes a health contingent wellness program.
- The Newborns’ Act Description of Rights* is specifically required in the SPD for group health plans that provide maternity or newborn infant coverage.
- Michelle’s Law Enrollment Notice must be included with any notice regarding a requirement for certification of student status for coverage under a plan. The DOL notes that, under the Affordable Care Act, group health plans and issuers are generally required to provide dependent coverage to age 26 regardless of the dependent’s student status. Therefore, this notice is not applicable if the group health plan only covers dependents up to age 26. If, however, a plan provides dependent coverage beyond age 26 and a student status requirement exists for said coverage, then this notice is applicable and should be in the SPD.
- The Women’s Health and Cancer Rights Act (“WHCRA”) has two notices,* one required upon enrollment and another required annually. These notices are necessary for group health plans that provide benefits for mastectomy-related services. The annual notice can be included in the SPD.
- The Mental Health Parity and Addiction Equity Act (MHPAEA) Increased Cost Exemption notice must be provided if an Employer qualifies for and uses this exemption as described under 29 CFR 2590.712(g). This notice must meet the content requirements set out in 29 CFR 2590.712(g)(6) and can be included in the SPD.
- The Notice Regarding Designation of a Primary Care Provider* (i.e. the Patient Protection Disclosure) must be provided with the SPD or any other similar description of benefits.
Separate from the SPD
Additional notices are required at or before the outset of group health plan coverage that must be separate from the SPD. The 90-day time period allowed for distribution of the SPD extends past the required timeframe for many of these notices.
- The Notice of Special Enrollment Rights* is required at or before the time an employee is initially offered the opportunity to enroll in a group health plan. This notice has been updated based on new special enrollment opportunities under the Children’s Health Insurance Program Reauthorization Act of 2009 (“CHIPRA”). This fact sheet discusses these changes.
- The Employer CHIPRA Notice must be distributed annually. It is a separate document from the SPD because all employees regardless of enrollment or eligibility status must receive this notice. Model language can be found in this document.
- The WHCRA enrollment notice* is required upon enrollment in a group health plan.
- The Summary of Benefits and Coverage (“SBC”) must be provided to participants and beneficiaries at various times, including with enrollment materials. Employers must follow the required SBC template.
- The Employer Notice to Employees of Coverage Options must be provided to all new employees. Model language is provided at this site.
* The Compliance Assistance Guide provides additional model language for the notices listed above in bold.
NOTE: All the notices in this blog may have additional time, distribution, and content requirements that must be followed.
Theresa Golde and the attorneys at De Leon & Washburn, P.C. are available to assist clients and out-of-state counsel with group health plans, ERISA, and other insurance regulatory matters. For more information regarding the firm’s practice areas, please visit our Practice Areas page, and please feel free to contact the attorneys at any time.
© De Leon & Washburn, P.C. This article is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between De Leon & Washburn, P.C. and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Articles are not continuously updated, and D&W makes no warranty or representation regarding accuracy or completeness.