1

2012 Open Enrollment Required Notices

September 13, 2011

2

◦Dennis Kadel – Vice President Employee Benefits Division

◦ Tamera Wilson Setser – General Counsel and Vice President HR Consulting Services

Welcome

3

Patient Protection and Affordable Care Act (PPACA) – signed on March 23, 2010

Health Care and Education Reconciliation Act (Reconciliation Act) – signed on March 30, 2010

Effective for plan years beginning on or after September 23, 2010

Health Care Reform - Impact

4

Mandated special one-time open enrollments that required notices be provided to eligible employees and their dependents.

◦ Health Care Coverage for Adult Children to age 26 Grandfathered plans are not required to extend coverage to

children under the age of 26 if they are eligible for their own employer’s coverage.

Future notices may be incorporated in the summary plan description or other open enrollment materials

PPACA Notices

5

◦ Lifetime and Annual Limits Group health plans may not establish lifetime limits on the

dollar value of benefits or impose annual limits on benefits that are considered essential for any participants.

Notices were necessary to allow individuals that had maxed out their lifetime benefit the opportunity to re-enroll.

Future notices may be incorporated in the summary plan description or other open enrollment materials.

PPACA Notices

6

◦ Statement of Grandfathered Status To maintain grandfathered status, a plan administrator or

health issuer must include a statement of the plan’s grandfathered status in plan materials provided to participants describing the plans benefits.

Must continue to be provided on a periodic basis with any participant materials describing plan benefits.

May be incorporated into the summary plan description or other enrollment materials.

PPACA Notices

7

◦ Medicaid and the Children’s Health Insurance Program (CHIP) A Notice describing premium assistance opportunities from

states in which premium assistance is available must be provided annually to each employee.  This Notice also should describe the CHIPRA special enrollment right created by the premium assistance opportunity. 

The notice must be distributed to All Employees, not just those who participate in the group health plan.

Employers may want to consider including this notice with other plan materials at open enrollment or combining this notice with other notices. 

Annual Notices

8

◦ Woman’s Health and Cancer Rights Act Notice The Women's Health and Cancer Rights Act (WHCRA)

includes protections for individuals who elect breast reconstruction in connection with a mastectomy.

WHCRA provides that group health plans and health insurance issuers that provide coverage for medical and surgical benefits with respect to mastectomies must also cover certain post-mastectomy benefits.

Employers may want to consider including this notice with other plan materials at open enrollment or combining this notice with other notices. 

Annual Notices

9

◦ If you have not established a formal process for distribution of the following notices during the new hire process, you may want to consider providing the following notices at open enrollment.

COBRA General (Initial) Notice Wellness Incentive as Part of a Group Health Plan Preexisting Condition Exclusion General Notice Notice of Special Enrollment Rights Newborn’s and Mothers Health Protection Act Disclosure

Notice

Notices for New Hires

10

◦ The SPD tells participants what the plan provides and how it operates. It provides information on when an employee can begin to participate in the plan, how service and benefits are calculated, when and in what form benefits are paid, and how to file a claim for benefits.

◦ If a plan is changed, participants must be informed, either through a revised summary plan description, or in a separate document, called a Summary of Material Modifications.

Summary Plan Description (SPD)

11

◦ When Should the SPD be Furnished? With plan enrollment materials or within 90 days of coverage. Upon request by a plan participant or person entitled to receive an SPD. An updated SPD must be furnished every 5 years if the plan is amended. If a material modification of the plan is made, participants must be

furnished an updated SPD or Summary of Material Modifications within 210 days after the end of the plan year in which the change was adopted.

If a material reduction in covered services or benefits is made to the plan, a new SPD or Summary of Material Reduction in Covered Services or Benefits must be sent within 60 days of the adoption of the plan change.

If there are no changes, a new SPD must be furnished every 10 years.

Summary Plan Description (SPD)

12

The following summarizes the Department of Labor Regulations relating to the disclosure of reports, statements, notices and other documents required pursuant to Title I of ERISA.◦ General Rule: The general rule is that a plan administrator must use

measures reasonably calculated to ensure actual receipt of the documents by participants and beneficiaries and take reasonable steps to ensure that the method of delivery is likely to result in full distribution.

◦ Hand Delivery: Hand delivery to an employee at his or her work site is acceptable. However, in no case is it acceptable merely to place copies of the documents in locations frequented by participants.

◦ U.S. Mail: Documents may be distributed via first, second or third-class mail; provided that distribution by second or third-class mail is acceptable only if return and forwarding postage is guaranteed and address correction is requested.

Delivery Methods

13

◦ Electronic Delivery: A plan administrator may satisfy its disclosure requirements electronically provided the following requirements are met:

The administrator takes appropriate and necessary measures reasonably calculated to ensure that the system for furnishing documents results in actual receipt of the information and protects the confidentiality of personal information relating to the individual’s accounts and benefits;

The electronic documents are prepared and furnished in a manner that is consistent with the style, format and content applicable to the hard copy document;

Notice is provided to each individual, at the time the document is furnished electronically, that apprises the individual of the significance of the document when it is not otherwise reasonably evident and of the right to request and obtain a paper version of the document; and

Upon request, the individual is furnished a paper version of the applicable documents.

See HuschBlackwell, Summary of Electronic Disclosures Rules under ERISA.

Delivery Methods

14

It solves the four most common compliance problems:

1. Where do I find the information I need?

2. What do I do, and when do I do it?

3. Who will make sure it gets done?

4. How do I document our compliance efforts?

15

QUESTIONS?