Employers that sponsor group health plans should provide certain benefit notices in connection with their plans’ open enrollment periods. Certain notices must be provided during open enrollment, including the summary of benefits and coverage (SBC).
Other notices, such as the Women’s Health and Cancer Rights Act (WHCRA) notice, must be distributed annually. Employers often include annual notices in open enrollment for administrative ease, despite potential different distribution times. Some of these notices may be included in the plan’s summary plan description (SPD) or detailed benefits summary provided by a health insurance issuer or third-party administrator (TPA).
Employers must check open enrollment materials for accurate coverage terms and costs representation. In general, plan participants should receive communication about any plan design changes for 2024 through either an updated SPD or a summary of material modifications (SMM).
This Compliance Overview includes a chart that summarizes the benefit notices employers should provide at open enrollment time.
SUMMARY OF BENEFITS AND COVERAGE (SBC)
Applicability: Group health plans and health insurance issuers
Description: Group health plans and health insurance issuers must furnish an SBC to applicants and enrollees annually during open enrollment or renewal periods. Federal agencies have provided a template for the SBC, which health plans and issuers are required to use.
The issuer for fully insured plans usually prepares the SBC. If the issuer creates the SBC, the employer is not obligated to create an SBC for the health plan. However, the employer might need to distribute the SBC prepared by the issuer.
MEDICARE PART D NOTICE OF CREDITABLE OR NON-CREDITABLE COVERAGE
Applicability: Employers with group health plans that provide prescription drug coverage
Description: Employers must notify Medicare Part D-eligible individuals before Oct. 15 each year about whether the drug coverage is at least as good as the Medicare Part D coverage (in other words, whether the prescription drug coverage is “creditable” or “non-creditable”).
Generally, due to eligibility uncertainty, employers often give Medicare Part D disclosure to all plan participants. Employers meet timing criteria by annually delivering notice to all participants before October 15.
CMS has provided model notices for employers to use.
THE WOMEN’S HEALTH AND CANCER RIGHTS ACT (WHCRA) NOTICE
Applicability: Group health plans that provide medical and surgical benefits for mastectomies
Description: Group health plans must provide a notice about the WHCRA’s coverage requirements at the time of enrollment and on an annual basis after enrollment. The annual WHCRA notice can be provided at any time during the year. The plan’s issuer or TPA often includes this notice in the SPD or benefits summary provided by the plan.
Model language is available in the DOL’s model notice guide
CHILDREN’S HEALTH INSURANCE PROGRAM (CHIP) NOTICE
Applicability: Group health plans that cover residents in a state that provides a premium assistance subsidy under a Medicaid plan or CHIP
Description: If an employer’s group health plan covers residents in a state that provides a premium subsidy under a Medicaid plan or CHIP, the employer must send an annual notice about the available assistance to all employees residing in that state. The annual CHIP notice can be provided at any time during the year. Employers often provide the CHIP notice with their open enrollment materials.
The DOL has a model notice that employers may use.
SUMMARY PLAN DESCRIPTIONS (SPD)
Applicability: Group health plans subject to ERISA
Description: New health plan participants must receive the SPD within 90 days from the commencement of their plan coverage. Employers may include the SPD in their open enrollment materials to make sure employees who newly enroll receive the SPD on a timely basis. Also, an employer should include the SPD with its enrollment materials if it includes notices that are required to be provided at the time of enrollment, such as the WHCRA notice.
In addition, an updated SPD must be provided to participants at least every five years, if material modifications have been made during that period. If there have been no material modifications, an updated SPD must be supplied at least once every 10 years.
COBRA GENERAL NOTICE
Applicability: Group health plans subject to COBRA
Description: Group health plans must provide a written General Notice of COBRA Rights to covered employees within 90 days after their health plan coverage begins. Employers may include the General Notice in their open enrollment materials to ensure that employees who newly enroll during open enrollment receive the notice on a timely basis.
The DOL has a COBRA Model General Notice that can be used by group health plans to meet their notice obligations.
GRANDFATHERED PLAN NOTICE
Applicability: Health plans that have grandfathered status under the Affordable Care Act (ACA)
Description: To maintain a plan’s grandfathered status, the plan sponsor must include a statement of the plan’s grandfathered status in plan materials provided to participants describing the plan’s benefits (such as the SPD and open enrollment materials).
The DOL has provided a model notice for grandfathered plans.
NOTICE OF PATIENT PROTECTIONS
Applicability: Group health plans that require designation of a participating primary care provider
Description: If a health plan requires participants to designate a participating primary care provider, the plan or issuer must provide a notice of patient protections whenever the SPD or similar description of benefits is provided to a participant. The issuer or TPA often includes this notice in the SPD or benefits summary.
The DOL has provided a model notice of patient protections for plans and issuers to use
HIPAA PRIVACY NOTICE
Applicability: Self-insured group health plans
Description: The HIPAA Privacy Rule requires self-insured health plans to maintain and provide their own privacy notices. Special rules apply for fully insured plans. Under these rules, the health insurance issuer, and not the health plan itself, is primarily responsible for the privacy notice.
Self-insured health plans must send privacy notices on specific occasions, which include providing them to new enrollees during the enrollment process. Therefore, the privacy notice should be provided along with the plan’s open enrollment materials. Every three years, health plans must redistribute privacy notice or provide access details to participants.
The Department of Health and Human Services has model privacy notices for health plans to choose from.
HIPAA SPECIAL ENROLLMENT NOTICE
Applicability: All group health plans
Description: At or prior to the time of enrollment, a group health plan must provide each eligible employee with a notice of his or her special enrollment rights under HIPAA. Include this notice with the plan’s enrollment materials. The plan’s issuer or TPA often includes it in the health plan’s SPD or benefits summary.
WELLNESS NOTICE – HIPAA
Applicability: Group health plans with health- contingent wellness programs
Description: Employers with health-contingent wellness programs must provide a notice that informs employees that there is an alternative way to qualify for the program’s reward. Include this notice in all plan materials detailing the terms of the wellness program. Include this notice with wellness program materials during open enrollment or renewal distribution.
Sample language is available in the DOL’s model notice guide.
WELLNESS NOTICE – ADA
Applicability: Wellness programs that collect health information or include medical exams
Description: To comply with the Americans with Disabilities Act (ADA), wellness plans that collect health information or involve medical exams must provide a notice to employees that explains how the information will be used, collected and kept confidential. Employees must receive this notice before providing any health information and with enough time to decide whether to participate in the program. Employers that are implementing a wellness program for the upcoming plan year should include this notice in their open enrollment materials.
The Equal Employment Opportunity Commission has provided a sample notice for employers to use.
INDIVIDUAL COVERAGE HRA (ICHRA) NOTICE
Applicability: Employers that sponsor ICHRAs for specific classes of employees (or all employees)
Description: Employers may implement an ICHRA to reimburse their eligible employees for insurance policies purchased in the individual market, or for Medicare premiums. ICRA-employers notify eligible participants about ICHRA and its ACA premium tax credit implications. In general, companies must provide this notice at least 90 days before the beginning of each plan year. Employers can issue this notice at open enrollment if done 90 days before the plan year starts.
A model notice is available for employers to use to satisfy this notice requirement.
CONCLUSION
Informing participants about coverage during open enrollment aids decision-making; benefit notices are pivotal in this regard. These notices, including the summary of benefits and coverage (SBC), Women’s Health and Cancer Rights Act (WHCRA) notice, Medicare Part D disclosure, and others, offer crucial details that empower participants to make informed decisions. By integrating these notices into open enrollment materials, employers streamline communication and facilitate transparent access to essential information. This proactive approach not only meets legal obligations but also enhances participants’ understanding of costs, protections, and available support, contributing to a more engaged and informed healthcare consumer community.
For more information on Benefit Notices, or any other benefit questions, contact us to speak to a consultant. You can also follow us on Twitter or LinkedIn or here on the FBS Blog for more benefits education.
