It is benefits open enrollment season for many employers, which means that employers will soon be providing employees with a number of notices relating to their benefit plans. The following is a checklist of the notices that are generally required to be provided at this time of year.
Open Enrollment Summary
What is it? A communication that explains what benefit plan options are available for the upcoming year, how those options differ from the benefits provided during the current year and how the various options and costs compare to one another.
What should an employer consider when preparing it? Though not a legally required notice, this summary could serve as an amendment to the employer’s health plan or a summary of material modification to the plan’s summary plan description. The employer should review its plan documents and fiduciary delegations to determine whether this communication would serve as an amendment and/or summary of material modification and, if so, what approval process would need to be followed. If this communication will not serve as a plan amendment and/or summary of material modification, the employer will need to be sure to amend its plan before the end of the year and timely provide a summary of material modification. In any event, an employer should very carefully ensure that this communication accurately reflects the benefits that the employer intends to offer for the upcoming year.
Summary of Benefits and Coverage (SBC)
What is it? This document provides basic information about a medical plan option’s coverage of certain services.
What should an employer consider when preparing it? Employers are required to provide an SBC for each available medical plan option to all participants and eligible employees on or before the date that enrollment materials are provided. The SBC must be prepared using the Department of Labor’s template and instructions, which have been updated for this year’s open enrollment period. When an employer offers a fully insured health plan, the insurance company is required to prepare the SBC. When an employer offers a self-funded health plan, the employer likely will receive a draft SBC from its third party administrator. These employers should carefully review the SBC to ensure that it accurately reflects the plan’s benefits and that it was prepared using the updated template and related instructions.
What is it? This notice provides information about where employees can learn about certain premium assistance programs, such as those available through the Children’s Health Insurance Program (CHIP) or Medicaid, that can help an employee pay for health coverage offered by his employer.
What should an employer consider when preparing it? Employers are required to send this notice each year to any employees (even those who are ineligible for the employer’s benefit plan) who live in a state that provides a premium assistance subsidy. The Department of Labor provides a model notice, which is generally updated semi-annually. An employer should be sure that it is using the most recently updated model, which is available on the Department of Labor’s website. Additionally, employers who provide required notices electronically should carefully consider whether to provide this notice in hard copy. The Department of Labor has indicated that the CHIP notice can be provided electronically only to those employees who satisfy the Department of Labor’s safe harbor for electronic distribution.
Women’s Health and Cancer Rights Act of 1998 (WHCRA) Notice
What is it? This notice informs medical plan participants about the plan’s coverage of services relating to mastectomies, such as breast reconstruction and treatment of complications from the mastectomy.
What should an employer consider when preparing it? Employers are required to send this notice each year to all health plan participants. The Department of Labor has provided a model notice and has not updated the model in years, so employers can use last year’s notice again this year.
Medicare Part D Notice
What is it? This notice informs persons who are eligible for an employer’s prescription drug plan about whether the plan’s coverage is considered “creditable” under Medicare Part D (Medicare’s prescription drug program). The notice explains the consequences of failing to enroll in Medicare Part D based on the creditable coverage status of the plan as well as the consequences of choosing to enroll in Medicare Part D while the individual is eligible for the employer’s plan.
What should an employer consider when preparing it? Employers are required to send this notice each year, before the beginning of the Medicare open enrollment period, to all prescription drug plan participants and eligible employees who are also Medicare-eligible. The Department of Health and Human Services (HHS) has provided a model notice and has not updated the model in years, so employers generally can use last year’s notice again this year if the plan’s creditable coverage status has not changed.
Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Notice
What is it? This notice describes how medical information obtained by the group health plan may be used and disclosed and how participants can obtain access to their medical information.
What should an employer consider when preparing it?
Equal Employment Opportunity Commission (EEOC) Wellness Program Notice
What is it? For any wellness program that includes a health risk assessment (HRA), biometric screening, or other medical examination or disability-related inquiry (whether or not there is an incentive involved), this notice describes the type of medical information that will be obtained, the purpose for which it will be used, restrictions on disclosure of the information, employees and/or parties with whom the information will be shared, and measures taken to ensure the information is not improperly disclosed.
What should an employer consider when preparing it? The notice must be provided to individuals who are eligible for the wellness program, and must be provided sufficiently in advance of their participation in the program to enable them to make an informed decision about whether to participate. The EEOC has published a model notice on its website but the model notice will require modification to reflect the details specific to the employer’s HRA and wellness program and information disclosure and use policies and practices. In addition, if the wellness program will involve collection of a spouse’s medical information, the employer must obtain an informed authorization from the employee and/or spouse before the spouse’s medical information is provided. The wellness program notice can be modified to serve as the authorization form.
Thompson Hine LLP – Kim Wilcoxon and Laura A. Ryan