Businesses that offer group health coverage must provide plan participants with a wide range of notices informing them about specific rights, options, and available resources.  If they don’t, significant fines can apply.  Who must get what notice and when varies a lot, but according to federal guidance, open enrollment is the time to distribute many required health plan disclosures.  Brokers can provide value to their group clients by making notice preparation and distribution part of their standard open enrollment operating procedures. Doing so will ensure that your employer clients are sending out the right documents to the right people at the right time!

The annual notices that should be in each open enrollment packet for every group plan, regardless of the group’s size or the plan’s structure include:

Summary of Benefits and Coverage (SBC) and Uniform Glossary—These documents provide an overview of each plan option the company offers and definitions of universal health insurance terms.  Carriers or third-party administrators prepare the SBC content for each plan option, but the employer needs to make sure each enrollee gets a copy that pertains to his or her plan choice.  In most cases, groups can provide one streamlined document if they offer consumer-directed coverage with an account-based plan option. However, if the employer offers an integrated HRA with fully insured major medical coverage and the carrier does not administer the HRA claims, then in many cases, the SBC prepared by the carrier will not include the pertinent details of the HRA.  If that is the case, then your employer client, or the entity that manages the HRA claims, will need to prepare a separate SBC for the HRA and the employer will need to make sure that every HRA participant gets a copy of both SBCs.

Women’s Health and Cancer Rights Act Notice—This notice provides enrollees with information about a federal law that provides protections to patients who have breast reconstructive surgery in connection with a mastectomy.  The Department of Labor has made a template available for brokers and employers to use to produce the notices.

Children’s Health Insurance Program Premium Assistance (CHIPRA) Notice—This notice informs plan participants about the potential availability of premium assistance programs for Medicaid and Children’s Health Insurance Program participants.  There is a federal model notice for employers to use, and it can be modified just to include the states where employees live.

Some notices only need to be distributed at open enrollment if the group health plan includes specific components:

Grandfathered Plan Notice—If a company offers any coverage option that has “grandfathered status” according to the Patient Protection and Affordable Care Act (ACA), then the employer group must provide a grandfathered plan notice to all plan participants that follows the federal template.

Wellness Program Disclosures — If a group health benefits package includes a wellness program, two different notice requirements could apply.  All companies that offer a wellness program that makes participants meet a goal based on a health factor before they get a reward need to provide enrollees with an annual disclosure that complies with federal guidance.  Also, any employer wellness program that asks employees about their medical conditions or asks employees to take medical examinations (such as tests to detect high blood pressure, high cholesterol or diabetes) must provide notice about how employee medical information is kept confidential.  There is a federal template available for this notice too.

The safest way for employers to deliver these notices is by hand or via U.S. mail to the employee’s most current address.  The federal rules allow for electronic distribution, but only if a business meets specific requirements.  Unfortunately, the electronic disclosure rules for most notices do not reflect current technology, and they are not appropriate for many workforces.  Often employees need to have direct access to a company-provided personal computer or exhaustive electronic consent procedures apply.  The federal electronic disclosure rules are also tricky for specific demographic groups and become very difficult if you have COBRA beneficiaries, children covered under child support orders, retirees on the group plan and in other cases, so paper copies in the enrollment packet is the simplest method to comply with the law and avoid penalty liability.

By Jessica Waltman, Special Contributor

Jessica Waltman is a health reform strategist, with more than 20 years of experience in health insurance markets and health policy. She is the former Senior Vice President, Government Affairs, for the National Association of Health Underwriters.