Distributing Required Notices: What You Need to Know
There are a lot of notices and materials that employers are required to distribute to their employees each year. The requirements for distributing these materials can vary – some are provided only when participants first become eligible for a health plan, some are provided when an employee enrolls in coverage, and others need to be distributed annually. In addition, all notices must be provided to participants upon request. The amount of time employers have to respond to a participant’s request can vary, so prompt attention to requests for information is the best practice.
Employers sometimes choose to rely on a third party, such as their COBRA administrator, insurance carrier, or broker, to prepare and provide participants with required notices. However, this requirement ultimately falls on the employer and failure to provide required notices in a timely manner may result in financial penalties.
The notices described below detail some of the more common employer notices related to employer sponsored health and welfare plans. Keep reading to learn more about which notices are required to be distributed to new hires, upon initial enrollment and special enrollment, and annually / open enrollment. Please note that some notices must be distributed at multiple times to employees.
Initial enrollment occurs when an active, eligible employee enrolls in their employer’s plan for the first time, whether they are a new hire or switch to their employers plan. This is different from open enrollment, which occurs annually and offers all benefit eligible employees the opportunity to enroll or change their health plan for the next year. Special enrollment creates an opportunity for an employee to sign up or change their health insurance options due to a qualifying event (getting married, having a baby, adopting a child, etc.). Understanding the differences between the various types of enrollment periods is vital to accurately distributing materials to the right people at the right time.
New Hires
The notices mentioned below must be provided to all new, benefit-eligible employees regardless of whether or not they enroll in coverage. If new hires enroll in coverage, please see the additional information in the sections that follow.
Notice Regarding Availability of Health Insurance Marketplace
Due within 14 days of hire.
This notice provides employees with information on the health insurance options available in the Marketplace as well as the impact of enrolling in the exchange rather than an employer-sponsored plan.
Notice of HIPAA Special Enrollment Rights
This notice provides information on HIPAA special enrollment rights. It may be incorporated into the plan’s Summary Plan Description (SPD). Many employers opt to include this notice annually during open enrollment to ensure that employees understand their enrollment rights.
Initial & Special Enrollment
The following documents need to be distributed during an employee’s initial enrollment or during a special enrollment period.
As a reminder, initial enrollment occurs when an employee first enrolls in their employer’s health plan, which can occur when they first become employed, or if they newly switch to the plan. Special enrollment is a period that occurs when an employee is offered the chance to sign up for health insurance outside of the annual open enrollment period because of a qualifying life event (getting married, having a baby, adopting a child, loss of coverage under another group health plan, etc.).
Summary Plan Description (SPD)
Within 90 days of enrollment of an existing plan
Within 120 days of enrollment of a new plan
Every 5 years if there are changes to the plan
Every 10 years if there are no plan changes
An SPD is a document that needs to be distributed for plans covered under the Employee Retirement Income Security Act of 1974 (ERISA). The SPD is a common-language resource that provides all the important information that employers and plan participants need to know about their benefit plan.
Summary of Benefits Coverage (SBC)
This notice is provided in accordance with the Affordable Care Act (ACA), which requires health plans and health insurance carriers to provide employees and participants an explanation of benefits offered under the plan. This includes major medical plans, health reimbursement arrangements (HRA) and non-excepted health care flexible spending accounts (FSA).
The SBC should be included with plan application materials during open enrollment. If coverage automatically renews for participants, the SBC must be provided no later than 30 days prior to the start of the new plan year. Employers must provide the SBC within 90 days of enrollment for special enrollees. The SBC must be provided 60 days in advance of any mid-year change to the plan.
HIPAA Wellness Program Notice
Due prior to wellness plan participation and anytime a description of the wellness plan is distributed.
This notice is only required for employers with wellness plans that require individuals to satisfy a standard related to a health factor (like not smoking) in order to obtain a reward. The HIPAA Wellness Program notice discloses the availability of a reasonable alternative standard (or waiver of the original standard), and states that meeting the alternative standard allows the individual to obtain the reward.
This notice should be provided to participants before they provide any health-related information or undergo medical examinations.
Women’s Health and Cancer Rights (WHCRA) Notice
Due at initial enrollment and open enrollment.
Employers must provide this notice to health plan participants regarding their rights to mastectomy-related benefits under the WHCRA.
Children’s Health Insurance Program (CHIP) Notice
Due at initial enrollment and the first of every year (often distributed during open enrollment).
An annual notice must be provided by employers who have group health plans that cover residents in a state that provides premium subsidies to low-income children and their families.
HIPAA Privacy Notice
Due:
At initial enrollment
Within 60 days of changes
At least every 3 years
This notice (or a Notice of Availability of a Notice of Privacy Policy) must be distributed at least every three years to inform participants that the notice is available and how they can request a copy . For fully-insured plans, the insurance carrier, not the employer, is responsible for providing the HIPAA Privacy Notice.
Americans with Disabilities Act (ADA) Wellness Program Notice
Due prior to wellness plan participation and anytime a description of the wellness program is distributed.
This notice is only required for employers with 15 or more employees who are subject to the ADA and who have wellness programs with health-related questions or medical examinations. These employers must inform participating employees of the following:
What information will be collected in the wellness program
Who the information will be shared with (and why)
Any limits on the disclosure
How the information will be kept confidential
This notice should be provided to participants before they answer any health questions or undergo any medical examinations.
Initial COBRA Notice
Due within 90 days of initial enrollment.
This notice is only required for employers with 20 or more employees who are subject to COBRA and who sponsor group health plans.
Employers must provide an Initial COBRA Notice to new participants and their covered dependents within 90 days after commencement of coverage under the plan. This notice is required to be distributed to both employees as well as dependents who enroll in COBRA-eligible plan.
Grandfathered Plan Notice
Due whenever a summary of plan benefits are provided (initial eligibility, open enrollment).
This notice is only required for employers with a grandfathered health insurance plan.
These employers must include information about the plan’s grandfathered status in documents describing coverage under the plan, including SPDs and open enrollment materials. Grandfathered plans are uncommon since the Affordable Care Act (ACA) has been in place.
Open Enrollment / Annual
There are several notices that must be provided to plan participants on an annual basis. It’s important to note that some of these notices have a calendar date deadline (such as Medicare Part D Notice of Creditable / Non-Creditable Status). Before deciding if you are able to distribute a notice during open enrollment, check to ensure the distribution date complies with the deadline.
Summary of Benefits Coverage (SBC)
Due at initial enrollment and open enrollment.
This notice is provided in accordance with the Affordable Care Act (ACA), which requires health plans and health insurance carriers to provide employees and participants an explanation of benefits offered under the plan. This includes major medical plans, health reimbursement arrangements (HRA) and non-excepted health care flexible spending accounts (FSA).
The SBC should be included with plan application materials during open enrollment. If coverage automatically renews for participants, the SBC must be provided no later than 30 days prior to the start of the new plan year. Employers must provide the SBC within 90 days of enrollment for special enrollees. The SBC must be provided 60 days in advance of any mid-year change to the plan.
Women’s Health and Cancer Rights (WHCRA) Notice
Due at initial enrollment and open enrollment.
Employers must provide this notice to health plan participants regarding their rights to mastectomy-related benefits under the WHCRA.
Children’s Health Insurance Program (CHIP) Notice
Due at initial enrollment and the first of every year (often distributed during open enrollment).
An annual notice must be provided by employers who have group health plans that cover residents in a state that provides premium subsidies to low-income children and their families.
Summary Annual Report (SAR)
Due annually (within 9 months of the end of the plan year).
Employers that are required to file a Form 5500 must provide participants with a SAR. This report is a summary of the information contained in the Form 5500. If the employer receives an extension to file the Form 5500, then the SAR is due within 2 months after the close of the extension period.
Patient Protections Notice
Due whenever an SPD or similar plan description is provided. Consider distributing during open enrollment materials with SBC.
Group health plans that require the designation of a primary care physician must include this notice anytime an SPD or similar description of benefits are provided to participants. This notice identifies what types of providers meet the plan requirements of a primary care physician, such as pediatricians and/or obstetrical or gynecological providers.
Grandfathered Plan Notice
Due whenever a summary of plan benefits are provided (initial eligibility, open enrollment).
This notice is only required for employers with a grandfathered health insurance plan.
These employers must include information about the plan’s grandfathered status in documents describing coverage under the plan, including SPDs and open enrollment materials. Grandfathered plans are uncommon since the Affordable Care Act (ACA) has been in place.
Medicare Part D Notice of Creditable / Non-Creditable Status
Due annually before October 15.
Employers with group health plans that cover prescription drugs must provide an annual notice to Medicare Part D eligible participants informing them whether the employer-sponsored prescription drug coverage is creditable or non-creditable.
Creditable coverage means that the employer-sponsored coverage is at least as good as Medicare Part D coverage.
This is not an all-inclusive list of notices that employers need to distribute to employees regarding their benefits. When an employer makes changes to the plan, there are additional distribution requirements they need to provide such as a Summary of Material Modification (SMM). For more information on change-related notices, consult your benefits or legal advisor.
Additionally, notice requirements may change from time-to-time. Employers can verify their notices are current or find templates on the Department of Labor (www.dol.gov) or Centers for Medicare & Medicaid Services (www.cms.gov) websites.