This compliance overview includes information on the notice and disclosure requirements that apply to group health plans and employers under federal laws. Some of these notices have been in place for years and some notices are now required due to the Affordable Care Act (ACA)
COBRA applies to employers that had 20 or more employees on more than 50 percent of the typical business days during the previous calendar year. COBRA requires employers to provide eligible employees and their dependents who would otherwise lose group health coverage as a result of a qualifying event with an opportunity to continue group health coverage.
COBRA includes a number of notice/disclosure requirements, such as the following:
- Initial/General COBRA Notice—Plan administrator must generally provide an explanation of COBRA coverage and rights within 90 days of when group health plan coverage begins.
- Notice to Plan Administrator—Employer must notify the plan administrator of certain qualifying events, such as an employee’s termination or reduction in hours, an employee’s death, an employee’s Medicare entitlement and the employer’s bankruptcy. The notice must be provided within 30 days of the qualifying event or the date coverage would be lost as a result of the qualifying event, whichever is later.
- COBRA Election Notice—Plan administrator must generally provide the COBRA election notice within 14 days after being notified of the qualifying event (or 44 days after the qualifying event if the employer is the plan administrator).
- Notice of Unavailability of COBRA—If an individual is not eligible for COBRA, the plan administrator must generally provide a notice of COBRA unavailability within 14 days after being notified of the qualifying event (or 44 days after the qualifying event, if the employer is the plan administrator).
- Notice of Early Termination of COBRA—Plan administrator must provide an early termination notice as soon as practicable following the determination that COBRA coverage will terminate earlier than the end of the maximum coverage period.
- Notice of Insufficient Payment—Plan administrator must notify a qualified beneficiary that the COBRA payment was not significantly less than the correct amount before coverage is terminated for nonpayment.
- Premium Change Notice—Plan administrator should provide a notice of premium increase at least one month prior to the effective date.
Model COBRA notices are available from the DOL.
Employee Retirement Income Security Act (ERISA)
ERISA applies to employee welfare benefit plans, including group health plans, unless specifically exempted. Church and government plans are exempt. There is not an exception for small employers.
ERISA imposes a variety of compliance obligations on group health plan sponsors and administrators. For example, ERISA establishes strict fiduciary duty standards for individuals that operate and manage employee benefit plans and requires that plans create and follow claims and appeals procedures. ERISA requires plan administrators to provide the following notices/disclosures:
- SPD—Plan administrator must automatically provide an SPD to participants within 90 days of becoming covered by the plan. An updated SPD must be provided at least every five years if changes have been made to the information contained in the SPD. Otherwise, an updated SPD must be provided at least every 10 years.
- Summary of Material Modifications (SMM)—Plan administrator must provide an SMM automatically to participants within 210 days after the end of the plan year in which the change was adopted. If benefits or services are materially reduced, participants generally must be provided with the SMM within 60 days from adoption. Also, plan administrators and issuers must provide 60 days’ advance notice of any material modification to plan terms or coverage that takes effect mid-plan year and affects the content of the SBC. The 60-day notice can be provided to participants through an updated SBC or by issuing an SMM.
- Plan Documents—Plan administrator must provide copies of plan documents no later than 30 days after a written request.
- Summary Annual Report (SAR)—ERISA plan administrators are subject to the SAR requirement, unless an exception applies. Plans that are exempt from the Form 5500 filing requirement are not required to provide the SAR. The SAR is a narrative summary of the Form 5500 and includes a statement of the right to receive a copy of the plan's annual report. The SAR must generally be provided within nine months after the end of the plan year. If the Form 5500 filing deadline was extended, the SAR must be provided within two months after the end of the extension period.
Form 5500 Requirements
The Form 5500 requirement applies to plan administrators of ERISA plans, unless an exception applies. Small health plans (fewer than 100 participants) that are fully insured, unfunded or a combination of fully insured and unfunded, are exempt from the Form 5500 filing requirement.
The Form 5500 is used to ensure that employee benefit plans are operated and managed according to ERISA’s requirements. The filing requirements vary according to the type of ERISA plan. Unless an extension applies, the Form 5500 must be filed by the last day of the seventh month following the end of the plan year (that is, July 31 of the following year for calendar year plans).
FAMILY AND MEDICAL LEAVE ACT (FMLA)
The FMLA applies to private sector employers with 50 or more employees in 20 or more workweeks in the current or preceding calendar year, as well as to all public agencies and all public and private elementary and secondary schools. The FMLA provides eligible employees with job-protected leave for certain family and medical reasons. An employer must maintain group health coverage during the FMLA leave at the level and under the conditions that coverage would have been provided if the employee had not taken leave. The FMLA requires employers to provide the following notices/disclosures:
- General Notice—Covered employers must prominently post a general FMLA notice where it can be readily seen by employees and applicants for employment. If the employer has any FMLA-eligible employees, it must also include the general notice in the employee handbook or other written employee guidance or distribute a copy of the notice to each employee upon hiring.
- Eligibility/Rights and Responsibilities Notice—Written guidance must be provided to an employee when he or she notifies the employer of the need for FMLA leave. The employer must detail the specific expectations and obligations of the employee, and explain the consequences for failing to meet these obligations.
Designation Notice—After the employer has sufficient information, it must provide a designation notice informing the employee whether the leave is designated as FMLA leave.
Model forms are available from the DOL.
CHILDREN’S HEALTH INSURANCE PROGRAM REAUTHORIZATION ACT (CHIPRA)
States may offer eligible low-income children and their families a premium assistance subsidy to help pay for employer-sponsored coverage. If an employer’s group health plan covers residents in a state that provides a premium subsidy, the employer must send an annual notice about the available assistance to all employees residing in the state. There is not an exception for small employers. A model notice is available from the DOL.
MEDICARE PART D CREDITABLE COVERAGE DISCLOSURES
The Medicare Part D requirements apply to group health plan sponsors that provide prescription drug coverage to individuals who are eligible for Medicare Part D coverage. There is not an exception for small employers.
Employer-sponsored health plans offering prescription drug coverage to individuals who are eligible for coverage under Medicare Part D must comply with the following disclosure requirements:
- Disclosure Notices for Creditable or Non-Creditable Coverage—A disclosure notice must be provided to Medicare Part D eligible individuals who are covered by, or apply for, prescription drug coverage under the employer’s health plan. The purpose of the notice is to disclose the status (creditable or non-creditable) of the group health plan’s prescription drug coverage. It must be provided at certain times, including before the Medicare Part D Annual Coordinated Election Period (Oct. 15 through Dec. 7 of each year).
- Disclosure to CMS—On an annual basis (within 60 days after the beginning of the plan year) and upon any change that affects the plan’s creditable coverage status, employers must disclose to the Centers for Medicare and Medicaid Services (CMS) whether the plan’s coverage is creditable.
Model forms are available from CMS.
Michelle’s Law applies to employer-sponsored group health plans. Plans with fewer than two participants who are current employees (for example, retiree health plans) are exempt. There is not an exception for small employers.
Michelle’s law ensures that dependent students who take a medically necessary leave of absence do not lose health insurance coverage. If a health plan requires a certification of student status for coverage, plan administrators and issuers must include a description of Michelle’s Law with any notice regarding a requirement for certification of student status.
NEWBORNS’ AND MOTHERS’ HEALTH PROTECTION ACT (NMHPA)
The NMHPA applies to group health plans that provide maternity or newborn infant coverage. There is not an exception for small employers.
Under the NMHPA, group health plans may not restrict mothers’ and newborns’ benefits for hospital stays to less than 48 hours following a vaginal delivery and 96 hours following a delivery by cesarean section. The plan’s SPD must include a statement describing the NMHPA’s protections for mothers and newborns.
WOMEN’S HEALTH AND CANCER RIGHTS ACT (WHCRA)
The WHCRA applies to group health plans that provide coverage for mastectomy benefits. Plans with fewer than two participants who are current employees (for example, retiree health plans) are exempt. There is not an exception for small employers.
The WHCRA requires health plans that provide medical and surgical benefits for a mastectomy to also cover:
- All stages of reconstruction of the breast on which a mastectomy has been performed;
- Surgery and reconstruction of the other breast to produce a symmetrical appearance; and
- Prostheses and physical complications of mastectomy, including lymphedemas.
Plans must provide a notice describing rights under WHCRA upon enrollment and on an annual basis after enrollment.
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