For many employers, open enrollment is focused on benefit changes, employee elections, and preparing for the upcoming plan year. It is also an important time to review the notices and disclosures that must be provided to employees and other eligible individuals.
Federal benefit notice requirements do not follow a single set of rules. Some notices must be provided annually, some are specifically tied to enrollment, and others are required only when certain circumstances apply. As a result, employers should review their notice obligations each year rather than simply relying on the same packet used during the prior open enrollment.
Notices Commonly Addressed During Open Enrollment
One of the most important open enrollment disclosures is the Summary of Benefits and Coverage (SBC). Most group health plans must provide an SBC upon initial enrollment, annual enrollment, special enrollment, and upon request. The SBC is intended to provide individuals with standardized information that makes it easier to understand and compare health coverage options.
Other notices employers may need to address annually or in connection with open enrollment include the CHIP premium assistance notice, Women’s Health and Cancer Rights Act (WHCRA) notice, Medicare Part D creditable coverage notice, and certain notices relating to wellness programs or plan-specific requirements.
In most cases, applicable notices may be combined into a notice packet or included with enrollment materials. However, each notice retains its own applicability, timing, recipient, and delivery requirements.
Not Every Notice Applies to Every Employer
Employers should avoid treating a standard notice packet as a one-size-fits-all solution. The notices that apply depend on factors such as the type of benefits offered, the employer and plan size, funding arrangement, plan design, and whether particular programs or features are offered.
For example, certain wellness notices apply only to employers offering particular types of wellness programs, while grandfathered plans and plans with certain provider-designation requirements have additional disclosure obligations.
Timing also varies. The CHIP notice, for example, is an annual requirement that generally must be provided before the beginning of the plan year, while the WHCRA notice has both enrollment and annual disclosure requirements. Other notices may be triggered when an employee is first eligible, experiences a qualifying event, requests information, or when the plan changes.
Delivery Matters
Providing the correct notice is only part of the compliance obligation. Employers should also consider how notices are delivered.
Many required benefit documents may be delivered electronically, but electronic distribution is subject to applicable delivery requirements. Simply posting required notices on an intranet, benefits website, or enrollment system may not by itself satisfy those requirements. Employers using electronic delivery should confirm that their distribution process complies with the rules applicable to the particular notice.
Employers should also consider who must receive each notice. Depending on the requirement, notices may need to reach not only employees but also spouses, dependents, former employees, COBRA participants, or other eligible individuals.
What Should Employers Do During Open Enrollment?
Before distributing open enrollment materials, employers should review the notices they plan to provide and confirm that they are current and appropriate for the upcoming plan year. They should also verify which notices apply to their particular plans, when each notice must be provided, who must receive it, and whether the intended method of delivery satisfies applicable requirements.
Employers should retain records showing what notices were distributed, when they were distributed, and how they were delivered.
INSURICA has required notices packets available as a resource for clients. Contact your INSURICA team if you would like a copy or have questions about which notices may apply to your plans.
Final Reminder
Open enrollment provides a convenient opportunity to address many employee benefit notice requirements, but it does not create a single deadline or replace the individual rules that apply to each notice.
A periodic review of the employer’s notice packet and distribution process can help identify outdated notices, missing disclosures, and delivery practices that may no longer be appropriate.
For more Employee Benefits resources, contact INSURICA today.
This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.
