Annual Benefit Notices and Disclosures

From ChamberChoice

Employers who sponsor health plans and other benefits are required to distribute a number of other notices and documents to plan participants or eligible employees. Each document has its own purpose and distribution requirements. The following is a brief list of these notices (note that not every notice may be applicable to every employer):

1. Summary Plan Description (SPD). The purpose of the SPD is to inform participants and beneficiaries about the plan and how it operates. It must be written for an average participant to be sufficiently comprehensive to apprise covered persons of their benefits, rights, and obligations under the plan. 

2. Summary of Material Modifications (SMM). This notice describes material modifications to a plan and changes in the information featured in the SPD. This must be distributed to all plan participants no later than 210 days after the end of the plan year in which the change is adopted. If the change is a material reduction in coverage, it must be provided within 60 days of the effective date of the change.

3. Lifetime Limit Notice. The notice informs eligible plan participants that there is no lifetime limit on the dollar value of benefits under the company’s group health plan. This must be kept for the employer’s records along with information about the health plan.

4. The Dependent Coverage to Age 26 Notice. This notice informs eligible plan participants that they may choose to cover their legally dependent children up to age 26 under the company’s group health plan.

5. Patient Protections Notice. This notice informs eligible plan participants about their rights to choose a primary care provider or a pediatrician when a plan or issuer requires designations of a primary care physician.

6. HIPAA Special Enrollment Rights Notice. The notice informs eligible plan participants about additional opportunities to enroll in a group health plan if they lose other coverage or experience certain life events, commonly referred to as Qualifying Life Events (QLEs). This must be given to eligible employees at or before the time they are offered the opportunity to enroll in the group health plan.

7. Newborns’ and Mothers’ Health Protection Act Notice. This notice explains the protections for eligible plan participants. Group health plans and health insurance issuers may not restrict benefits for a hospital stay in connection with childbirth to less than 48 hours following the vaginal delivery or 96 hours after a delivery by cesarean section. If your company’s coverage is insured by an insurance company or an HMO, and your state has a law controlling coverage for newborns and mothers that meet specific criteria, then the rights and protections depend on the state law.

8. Women’s Health and Cancer Rights Act Notice. This notice explains the protections for eligible individuals who elect breast reconstruction after a mastectomy. Group health plans offering mastectomy coverage must also provide coverage for certain services relating to the mastectomy. Required coverage includes all stages of reconstruction of the breast on which the mastectomy was performed, surgery and reconstruction of the other breast to produce a symmetrical appearance, prostheses, and treatment of physical complications of mastectomy, including lymphedema.

9. Medicaid and Children’s Health Insurance Reauthorization (CHIPRA) Notice. This notice informs eligible plan participants and their children that their state may have a premium assistance program that can pay for coverage using funds from their Medicaid or CHIP programs.

10. HIPAA Notice of Privacy Practices. This notice provides a clear and understandable explanation of the individual’s rights with respect to their personal health information and the privacy practices of health plans and health care providers. The notice must be distributed to all plan participants during enrollment if the employer is subject to HIPAA privacy rules. If there is a revised notice, then the revised notice must be provided within 60 days of the material revision. Individuals who are covered by the plan must be notified of how and where to obtain the notice at least once every three years.

11. Marketplace Notice. This notice helps employees evaluate the different options for health insurance. It provides some basic information about the new Marketplace. The notice should be distributed to all employees on the date of hire.

12. Summary of Benefits and Coverage. Employers who sponsor health plans are required to provide a Summary of Benefits and Coverage (SBC) to employees eligible for health coverage prior to enrollment or reenrollment, and/or upon employee request. The SBC for all available plans must be
provided when the employee is first eligible. The SBC for the plan in which the employee is enrolled should be provided when open enrollment materials are distributed. If open enrollment materials are not distributed, the employer must provide the SBC by the first day the employee is eligible to enroll.

Because there are so many different requirements for document distribution, we recommend that the employer regularly distribute a “Notice Package” that includes all of the above (as applicable) notices and documents.

This article gives a basic overview of recent regulation as in effect on the date of the article. Please be aware that the determination of the requirements and the application of these rules to each employer may differ due to a number of variables. Nothing in this article should be construed as legal advice.