Summary Plan Description Requirements for Group Health Plans

Transcription

1 Summary Plan Descriptin Requirements fr Grup Health Plans September 2014 All grup health plans subject t the Emplyee Retirement Incme Security Act (ERISA) are required t prvide participants with a Summary Plan Descriptin (SPD) An SPD must be written in a manner calculated t be understd by the average plan participant and must be sufficiently cmprehensive t infrm the participant f his r her rights and bligatins under the plan This article addresses many f the cmmnly asked questins abut SPDs It als cntains a checklist fr the basic infrmatin that is required t be included in an SPD What is a Summary Plan Descriptin? An SPD is a dcument that is prvided t plan participants t explain the plan s benefits, claims review prcedures and participants rights ERISA cntains standards fr: The infrmatin that must be included in the SPD; and Hw the SPD must be distributed t participants Sme plan spnsrs mistakenly believe that prviding participants with the bklet issued by the insurance cmpany fulfills their bligatin t prvide participants with an SPD The insurance bklet will ften cntain detailed infrmatin regarding plan benefits and cverage Hwever, in many cases, the plan spnsr will need t prvide additinal infrmatin that is nt cntained within the insurance bklet t cmply with the SPD cntent requirements Are all grup health plans required t prvide participants with an SPD? All grup health plans subject t ERISA must prvide participants with an SPD, regardless f size Bth insured and self-funded grup health plans must cmply with ERISA s SPD requirements While ERISA cntains an exceptin fr certain grup health plans with less than 100 plan participants, that exceptin nly applies t reprting requirements (fr example, Frm 5500 filings), but des nt apply t SPDs What if the Department f Labr (DOL) requests a cpy f the plan s SPD? DOL audit letters may request health plan spnsrs t prvide dcuments demnstrating cmpliance with the ERISA and ther benefits mandates including the Affrdable Care Act (ACA), Cntinuatin Cverage (COBRA), prtability and nndiscriminatin (HIPAA), Mental Health Parity and Addictin Equity Act (MHPAEA), Newbrns and Mthers Health Prtectin Act (NMHPA) and Genetic Infrmatin Nndiscriminatin Act (GINA) It requires plans t prvide a cpy f an SPD within 30 days f a request If the plan administratr fails t prvide the SPD within 30 days, the DOL may impse a civil penalty f up t $110 per day fr each day the failure cntinues, up t a maximum penalty f $1,100 per request Multiple requests fr the same r similar dcuments are cnsidered separate requests When must an SPD be prvided t a plan participant? Participants must receive an SPD: Within 120 days f the plan becming subject t ERISA (fr example, a new grup health plan); Within 90 days f enrllment, fr new participants; Within 30 days f a participant s written request fr an SPD; Every five years, if material mdificatins are made during that perid; r Every 10 years, if n amendments ccur As a practical matter, t help participants understand their plan benefits, plan administratrs shuld prvide new participants with SPDs and distribute updated SPD infrmatin t current participants as sn as pssible Rethink the Future Reexamine yur Plan Regrup yur Benefits PHONE (412) wwwgatewayfinancialbiz Precisin Perfrmance Slutins This material is intended fr infrmatinal purpses nly and shuld nt be cnstrued as legal advice and is nt intended t replace the advice f a qualified attrney, tax advisr r plan prvider This infrmatin has been taken frm surces which we believe t be reliable, but there is n guarantee as t its accuracy The infrmatin is intended slely fr Gateway Financial Grup clients Yu may nt display, reprduce, cpy, mdify, license, sell r disseminate in any manner any infrmatin included in this bulletin except as apprved by Gateway Financial

2 When must changes t the SPD be cmmunicated t plan participants? A summary f material mdificatin (SMM) must be prvided within 210 days after the clse f the plan year in which the change was adpted If benefits r services are materially reduced, participants must be prvided ntice: Within 60 days frm adptin; r Within 90 days frm adptin, if participants receive such infrmatin frm the plan administratr at regular intervals f nt mre than 90 days In additin t the SPD, the Affrdable Care Act (ACA) requires plan administratrs and issuers t prvide participants with a Summary f Benefits and Cverage (SBC) As a related requirement, under the ACA, plan administratrs and issuers must prvide 60 days advance ntice f any material mdificatin t plan terms r cverage that takes effect mid-plan year The 60-day ntice can be prvided t participants thrugh an updated SBC r by issuing an SMM A material mdificatin is any change t a plan s cverage that (independently r in cnnectin with ther changes taking place at the same time) wuld be cnsidered by the average plan participant t be an imprtant change in cvered benefits r ther terms f cverage Hw may SPDs be distributed t participants? The plan administratr is required t prvide the SPD t participants in a manner reasnably calculated t ensure actual receipt f the material by the participant The fllwing are examples f acceptable methds f delivery: In-hand delivery t emplyees at their wrksite (merely psting infrmatin in a cmmn area is nt acceptable); Included within a peridical distributed t emplyees (fr example, a unin newsletter r cmpany publicatin); US mail, including first-, secnd- r third-class (use f secnd- r third-class mail is acceptable nly if return and frwarding pstage is guaranteed and address crrectin is requested Any material sent by secnd- r third-class mail that is returned with an address crrectin must be sent again by first-class mail r persnally delivered t the participant at his r her wrksite); r Electrnic media (DOL regulatins include a safe harbr prvisin applicable t electrnic delivery f SPDs) What infrmatin must be cntained within an SPD? ERISA and its regulatins require that an SPD be sufficiently cmprehensive t infrm participants f their rights and bligatins under the plan The attached SPD Checklist utlines basic items that must be included in an SPD Des ERISA require that SPDs be prvided in a language ther than English? N While ERISA des nt require that an SPD be prvided in a nn-english language, in sme cases the SPD must include a prminently displayed ntice that assistance in a nn-english language cmmn t the plan participants is available Sample language is prvided within the attached SPD Checklist A plan is required t include this ntice in the fllwing cases: Plan Size* (Number f plan participants) Less than 100 Number f Participants wh are literate nly in the same nn-english language 25% r mre Greater than 100 Lesser f: 500 r mre; r 10% r mre *At the beginning f the plan year Rethink the Future Reexamine yur Plan Regrup yur Benefits PHONE (412) wwwgatewayfinancialbiz Precisin Perfrmance Slutins This material is intended fr infrmatinal purpses nly and shuld nt be cnstrued as legal advice and is nt intended t replace the advice f a qualified attrney, tax advisr r plan prvider This infrmatin has been taken frm surces which we believe t be reliable, but there is n guarantee as t its accuracy The infrmatin is intended slely fr Gateway Financial Grup clients Yu may nt display, reprduce, cpy, mdify, license, sell r disseminate in any manner any infrmatin included in this bulletin except as apprved by Gateway Financial

3 Here s an example: An emplyer maintains a grup health plan that cvers 1,000 plan participants At the beginning f the plan year 500 participants are literate nly in Spanish, 101 are literate nly in Vietnamese, and the remaining are literate in English Each f the 1,000 plan participants must receive an SPD that cntains a ntice in bth Spanish and Vietnamese explaining the ability t btain assistance with understanding the SPD If the SPD cntains infrmatin n COBRA rights, is it still necessary t send an initial COBRA ntice? Fr the SPD t als fulfill an emplyer s bligatin t prvide an initial COBRA ntice, the SPD must: Be mailed via first-class mail t the participant s hme; Be addressed t the participant and cvered dependents; and Cntain all f the infrmatin required t be included in an initial COBRA ntice Hw has the Affrdable Care Act (ACA) affected SPD disclsure requirements? The ACA des nt change ERISA s verall cntent r distributin requirements fr SPDs Hwever, if the ACA affects a health plan s benefits r terms f cverage, the changes must be described in the plan s SPD (r cmmunicated t participants thrugh an SMM) Fr example, the ACA requires nn-grandfathered plans t cver certain preventive health services withut any cst-sharing T the extent a health plan is affected by this requirement, it shuld be cmmunicated t participants thrugh an updated SPD (r SMM) What is the Summary f Benefits and Cverage (SBC) that plans must start prviding under the ACA? The ACA expands ERISA's disclsure requirements by requiring that a summary f benefits and cverage (SBC) with specific cntent standards be prvided t applicants and enrllees befre enrllment r re-enrllment This SBC requirement applies in additin t ERISA's SPD requirements Actin Plan: Our Cnsultants and Client Managers can discuss the imprtance f the summary plan descriptin cmpliance requisite with yu We wrk clsely with several capable prfessinals wh are well-experienced in writing cmpliant summary plan descriptins fr ur clients Fr additinal infrmatin cntact: Edwin R Weeber, Jr, CEBS, CLU, ChFC nweeber@gatewayfinancialbiz This material is intended fr infrmatinal purpses nly and shuld nt be cnstrued as legal advice and is nt intended t replace the advice f a qualified attrney, tax advisr r plan prvider This infrmatin has been taken frm surces which we believe t be reliable, but there is n guarantee as t its accuracy The infrmatin is intended slely fr Gateway Financial Grup clients Yu may nt display, reprduce, cpy, mdify, license, sell r disseminate in any manner any infrmatin included in this bulletin Rethink the Future Reexamine yur Plan Regrup yur Benefits PHONE (412) wwwgatewayfinancialbiz Precisin Perfrmance Slutins This material is intended fr infrmatinal purpses nly and shuld nt be cnstrued as legal advice and is nt intended t replace the advice f a qualified attrney, tax advisr r plan prvider This infrmatin has been taken frm surces which we believe t be reliable, but there is n guarantee as t its accuracy The infrmatin is intended slely fr Gateway Financial Grup clients Yu may nt display, reprduce, cpy, mdify, license, sell r disseminate in any manner any infrmatin included in this bulletin except as apprved by Gateway Financial

4 Summary Plan Descriptin Checklist (Fr Grup Health Plans) Plan Type (fr example, grup health plan) Plan Number (three digits) Plicy Number (if insured) Type f Plan Administratin (insured/spnsr/third party administratr) Plan Year Plan Spnsr Emplyer Identificatin Number (EIN) A statement that a cmplete list f emplyers, emplyee rganizatins and unins spnsring the plan is available Where a plan is established pursuant t a cllective-bargaining agreement, a statement that a cpy f that agreement is available upn request t the plan administratr Financing & Administratin Funding medium (insurance cmpany, trust fund) Surce f cntributins and hw cntributins are calculated Plan Administratr Telephne Number Agent fr Service f Legal Prcess Statement that legal prcess can be served n the plan administratr r plan trustee Trustees (if the plan has a trust) s Titles es Eligibility & Benefits Statement f the cnditins pertaining t eligibility t receive benefits (such as enrllment perids, waiting perids and eligibility criteria) Statement that plan administratr has discretinary authrity t interpret and/r administer the plan (fr insured plans, a statement that the insurer will make benefit determinatins) A summary f benefits that includes a descriptin f:* Cst sharing prvisins (premiums, deductibles, cinsurance, cpayment amunts fr which the beneficiary will be respnsible) Annual r lifetime maximums r ther limits n benefits under the plan Rethink the Future Reexamine yur Plan Regrup yur Benefits PHONE (412) wwwgatewayfinancialbiz Precisin Perfrmance Slutins This material is intended fr infrmatinal purpses nly and shuld nt be cnstrued as legal advice and is nt intended t replace the advice f a qualified attrney, tax advisr r plan prvider This infrmatin has been taken frm surces which we believe t be reliable, but there is n guarantee as t its accuracy The infrmatin is intended slely fr Gateway Financial Grup clients Yu may nt display, reprduce, cpy, mdify, license, sell r disseminate in any manner any infrmatin included in this bulletin except as apprved by Gateway Financial

5 Preventive services cverage Prescriptin drug cverage Medical test, device and prcedure cverage Requirements t use netwrk prviders List f netwrk prviders** Cverage fr services prvided by nn-netwrk prviders Limits n selectin f primary care prviders r prviders f specialty medical care Cnditins r limits applicable t btaining emergency medical care Pre-authrizatin r utilizatin review requirements Benefits prvided pursuant t the Wmen s Health & Cancer Rights Act and Newbrn s and Mther s Health Prtectin Act (Mdel Statement fr NMHPA) COBRA Rights/USERRA Rights Claims and appeals prcedures Statement that a cpy f QMSCO prcedures is available upn request Cverage fr adpted children Cntinued cverage f csts f pediatric vaccines Genetic Infrmatin Nndiscriminatin Act rights and bligatins Mental health parity disclsures Affrdable Care Act disclsures, including ntice f grandfathered status and ntice f patient prtectins (as applicable t the plan) HIPAA preexisting cnditin and special enrllment disclsures (effective fr plan years beginning n r after January 1, 2014, the Affrdable Care Act prhibits plans frm impsing pre-existing cnditin exclusins) *Sme f the listed benefits are affected by the Affrdable Care Act, such as the lifetime and annual dllar limits **The prvider listing may be furnished as a separate dcument, prvided that the SPD cntains a general descriptin f the prvider netwrk and states that prvider lists are furnished autmatically, withut charge, as a separate dcument Lss f Benefits Statement A statement clearly identifying circumstances which may result in disqualificatin, ineligibility, r denial, lss, frfeiture, suspensin, ffset, reductin, r recvery (subrgatin) A summary f plan prvisins gverning the authrity f the plan spnsr r thers t terminate, amend, r eliminate benefits under the plan, including a descriptin f participants and beneficiaries benefits, rights and bligatins n plan terminatin and a descriptin f any plan prvisins gverning the allcatin and dispsitin f plan assets upn terminatin ERISA Rights Statement f ERISA rights (Mdel Statement available) Freign Language Statement (if applicable Mdel Statement: This bklet cntains a summary in English f yur plan rights and benefits under this Emplyer s grup health plan If yu have difficulty understanding any part f this bklet, cntact Mr Jhn De, the plan administratr, at his ffice in Rm 123, 456 Main Street, Anywhere City, State Office hurs are 8:30 am t 5:00 pm Mnday thrugh Friday Yu may als call the plan administratr s ffice at fr assistance This ntice must be prminently displayed within the SPD and must appear in the nn-english language cmmn t the plan participants Disclaimer A statement warning that, in the event f a cnflict between the SPD and the plan dcument, which instrument cntrls Rethink the Future Reexamine yur Plan Regrup yur Benefits PHONE (412) wwwgatewayfinancialbiz Precisin Perfrmance Slutins This material is intended fr infrmatinal purpses nly and shuld nt be cnstrued as legal advice and is nt intended t replace the advice f a qualified attrney, tax advisr r plan prvider This infrmatin has been taken frm surces which we believe t be reliable, but there is n guarantee as t its accuracy The infrmatin is intended slely fr Gateway Financial Grup clients Yu may nt display, reprduce, cpy, mdify, license, sell r disseminate in any manner any infrmatin included in this bulletin except as apprved by Gateway Financial