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Annual Notices For Employee Benefits: A Guide To Compliance

by Dave Sanders on Jul 8, 2021 7:18:51 AM

A number of disclosures and annual notices for employee benefits are required by law if you offer a group health plan. And if you fail to provide them, you could face steep penalties. For instance, you’ll pay up to $1,190 if you don’t provide employees a Summary of Benefits and Coverage (SBC) for violating the requirements of the Employee Retirement Income Security Act of 1974 (ERISA).

At Complete Payroll Solutions, we have more than 18 years of experience helping our clients stay compliant with employment laws and regulations, including notice rules. We know that keeping up with required notices can be confusing and time-consuming, so here we’ll explain each one and break down the steps to take to avoid violations.

In this article, we’ll discuss:

  • ACA Notices
  • ERISA Notices
  • HIPAA Notice of Privacy Practices
  • COBRA Notices
  • Additional Benefit Notices
    • Genetic Information Nondiscrimination Act Disclosures
    • Children’s Health Insurance Program Reauthorization Act (CHIPRA) Notice
    • Michelle’s Law Notice
    • Mental Health Parity and Addiction Equity Act Disclosure
    • Women’s Health and Cancer Rights Act Notice
    • Newborns’ and Mothers’ Health Protection Act Notice
    • Medicare Part D Notice of Creditable Coverage

After reading this, you’ll know what you need to do to make sure you’re distributing the necessary notices to participants to protect your employees and your business.

Top Disclosure and Annual Notices For Employee Benefits 

Employers who offer group health plans are required to distribute several different notices each year. Here are the most common rules you need to follow.

ACA Notices

  • Requirement: Under the Affordable Care Act (ACA), you’ll need to provide certain notices for your group health plan. These include an Exchange Notice that advises employees about the ACA’s health insurance marketplace and a Notice of Patient Protections that contains their rights to choose a primary care provider and obtain OBGYN care without prior authorization.
  • Due Date: The Exchange Notice is due upon hiring a new employee within 14 days of their start date. The Notice of Patient Protections must be provided whenever the plan provides a participant with a Summary Plan Description or other similar description of benefits under the plan.  

ERISA Notices

  • Requirement: Under Title 1 of ERISA, administrators of employee benefit plans are required to furnish different notices to participants, beneficiaries and certain other individuals.
    • Summary Plan Description (SPD)
      • Requirement: You must provide an SPD to participants that details everything about your plan like eligibility requirements, benefits, claims, appeals procedures, enrollment rights, and rights under ERISA.
      • Due Date: You need to furnish the SPD within 90 days of participants getting coverage or within 30 days of a participant’s written request. An updated SPD must be furnished every 5 years if changes are made to SPD information or the plan is amended (otherwise, it must be furnished every 10 years).
    • Plan Document or Wrap Document
      • Requirement: Your plan must be established and maintained pursuant to a written plan document. It doesn’t need to be in any particular format but must include information on the rights of plan participants as well as the plan’s operation and administration. One common approach to plan documents is to create a summary wrap document, which is one document that “wraps around” all the covered benefits you offer.
      • Due Date: The plan document doesn’t need to be furnished to employees. However, if an employee requests a copy, you must provide it within 30 days of their written request.

HIPAA Notice of Privacy Practices

COBRA Notices

  • Requirement: Once an employee experiences a COBRA qualifying event, you’re required to provide certain notices to qualified beneficiaries of their COBRA rights. The two most common notices are the Election Notice and General Notice.
  • Due Date: Each notice has specific timeframes in which they must be issued. The Election Notice is due within 14 days of learning of a qualifying event and the General Notice must be provided to the employee or covered spouse a general notice within the first 90 days of coverage.

Additional Benefit Notices

In addition to the notice requirements listed for the laws we’ve already discussed, there are additional notices that are required to be distributed each year for group health plans to provide important information about coverage and beneficiaries’ rights and responsibilities. 

 Genetic Information Nondiscrimination Act (GINA) Disclosures

  • Requirement: If you have 15 or more employees, GINA applies to you and prohibits discrimination based on an individual’s genetic information. While GINA doesn’t require that you provide a written notice to employees, many employers opt to in order to make clear what is required and permitted with regard to obtaining and maintaining genetic information. At a minimum, you should include safe harbor language in any forms that are used for processing medical or leave requests.
  • Due Date: This notice must be provided whenever an applicant or employee is sent for a medical examination by an employer with 15 or more employees. An additional “warning” is required when requests for health-related information are made by employers with 15 or more employees (e.g., to support an employee’s request for reasonable accommodation or a request for sick leave), but only if the request for medical documentation is made in a way that is likely to result in receipt of genetic information. 

Children’s Health Insurance Program Reauthorization Act (CHIPRA) Notice

  • Requirement: If you provide a group health plan in a state that provides premium assistance through employer-based plans, you’ll need to provide an annual CHIP notice to let employees know of the opportunities available. A model notice is available from the DOL.
  • Due Date: The CHIP notice must be provided annually before the start of each plan year (may be provided with enrollment packets, open season materials, or the SPD).

Michelle’s Law Notice

  • Requirement: If your group health plan provides dependent coverage beyond age 26 and bases eligibility for such coverage on student status, you’ll need to provide a notice along with any notice regarding a requirement for certification of student status for coverage under the plan.
  • Due Date: The notice must be provided any time a request for student status is requested by the plan. 

Mental Health Parity and Addiction Equity Act Disclosure

  • Requirement: You need to provide a notice to employees that the financial requirements and treatment limits that apply to mental health or substance use benefits under your plan are no more restrictive than for other medical benefits.
  • Due Date: You’ll need to provide this notice upon request for a plan offering medical/surgical benefits and mental health or substance use disorder benefits.

 Women’s Health and Cancer Rights Act Notice

  • Requirement: Unless you are exempt because you have fewer than 2 participants who are current employees, you’ll need to provide a notice to advise employees about benefits that may be available to them if they’re having a mastectomy.
  • Due Date: You’ll need to provide the notice of rights both upon enrollment and annually thereafter. 

 Newborns’ and Mothers’ Health Protection Act Notice

  • Requirement: You need to provide a notice to employees explaining that your plan can’t restrict a hospital stay in connection with childbirth to less than 48 hours for a vaginal delivery or 96 hours following a C-section.
  • Due Date: This notice must be included in the SPD for a plan providing maternity or newborn infant coverage.  

Medicare Part D Notice of Creditable Coverage

  • Requirement: If you offer prescription drug coverage to employees who are eligible for Medicare Part D coverage, you have to provide a notice about your drug coverage to help them compare their options.
  • Due Date: This notice is due before Medicare Part D’s annual election period each year that runs from October 15 to December 7, upon request, and at various other times as required under the law.

How to Stay Compliant with Annual Notices For Employee Benefits 

To stay compliant, it’s important to have a comprehensive approach to meeting notice rules. Complete Payroll Solutions can help your business by:

  • Creating and distributing benefit notices
  • Providing COBRA notices to employees or covered spouses
  • Delivering annual ACA notices to participants
  • Developing wrap documents to support SPD and ERISA requirements

For more help identifying the steps you need to take to manage compliance, read our next article on benefits compliance.

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