Employer Notification and Disclosure

Carolyn L. Goodwin, CBC, SGSPrincipal, Goodwin Benefits Group LLC

Karen KirkpatrickSenior Compliance Advisor

Infinisource, Inc.

© 2011, National Association of Health Underwriters • www.nahu.org

Attendee Goals

KEEP brokers and their clients informed

KEEP the government out of your business

KEEP your business out of court

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Review of Each Notice

• Purpose (PUR)• Regulating agency (AGE)• Who must provide (WHO)• Delivery requirements (DEL)• Timing rules (TIM)• Penalty scheme (PEN)

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FMLA Notices

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FMLAFamily & Medical Leave Act

• PUR: To inform employees of their general FMLA rights• AGE: Wage and Hour Division• WHO: Employers with 50 or more employees• DEL: General Notice (WHD Publication 1420) must be

displayed in a conspicuous place, even in locations without eligible employees

• TIM: Effective immediately• PEN: WHD discretion

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FMLA Cont.

• PUR: To inform employees of whether they are eligible for FMLA leave

• AGE: Wage and Hour Division• WHO: Employers with 50 or more employees• DEL: Eligibility/Rights and Responsibilities Notice (WH-381) must be

delivered in writing• TIM: Within five business days of acquiring knowledge of FMLA

reason• PEN: Full range of FMLA penalties via a WHD complaint or private

action

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FMLA Cont.

• PUR: To inform employees of whether they are eligible for FMLA leave• AGE: Wage and Hour Divison• WHO: Employers with 50 or more employees• DEL: Designation Notice (WH-382) must be delivered in writing• TIM: Within five business days of acquiring knowledge of FMLA reason• PEN: Full range of FMLA penalties via a WHD complaint or private action

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Benefits Related Notice and Delivery Requirements

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Benefits Related• HIPAA

– CHIPRA• COBRA• Medicare• WHCRA• ACA required notices

– Grandfathered plan notice– Patient protection notice– Summary of Benefits and Coverage

• ERISA Notices– SPD– SMM– SAR 9

HIPAA Notices

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Notice of Privacy Practices (NPP)

Breach Notification

Special Enrollment

Rights Notice

Individual Notice of Preexisting

Condition

Certificates of Creditable Coverage

Privacy, Security, HITECH

HIPAA Portability

Notice of Availability of

NPP

General Notice of Preexisting

Condition

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General Notice of Preexisting Condition

• PUR: To notify participants of any PCEs• AGE: DOL Employee Benefit Security Administration (EBSA)• WHO: Covered employees• DEL: Provided in an manner “reasonably calculated to

ensure receipt• TIM: Earliest date after enrollment• PEN: Up to $100 per day and cannot enforce PCE until

notice is sent

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Individual Notice of Preexisting Condition

• PUR: To notify participant of PCE period that will apply• AGE: EBSA• WHO: Participants• DEL: Provided in a manner “reasonably calculated to ensure

receipt”• TIM: Earliest date after reasonable and prompt action (e.g., five

days)• PEN: Up to $100 per day and cannot enforce PCE until notice is

sent

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Special Enrollment Rights Notice

• PUR: To notify eligible employees of special enrollment rights (e.g., addition of dependent, loss of other coverage, CHIP)

• AGE: EBSA• WHO: Eligible employees• DEL: Provided in a manner “reasonably calculated to ensure

receipt”• TIM: At or before initial enrollment opportunity• PEN: Up to $100 per day and retroactive enrollment

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Certificates of Creditable Coverage

• PUR: To provide participants proof of prior coverage so they can eliminate/reduce PCE period

• AGE: EBSA• WHO: Participants• DEL: Via first class mail• TIM: Automatically upon loss of coverage (LOC) or upon

request within 24 months of LOC• PEN: Up to $100 per day and retroactive enrollment

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Notice of Privacy PracticeNPP

• PUR: To notify participants of their HIPAA Privacy rights• AGE: HHS Office for Civil Rights (OCR)• WHO: Enrolled employees• DEL: In writing and on benefits website (if applicable)• TIM: At enrollment, upon request, within 60 days of

material change to notice• PEN: Unspecified

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Notice of Availability of NPPNotice of Privacy Practices

• PUR: To remind participants where they can obtain the NPP

• AGE: OCR• WHO: Enrolled employees• DEL: In writing• TIM: Every three years• PEN: Unspecified

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)

Breach Notifications(as required by HITECH Act)

• PUR: TO notify participants of a breach of unsecured protected health information (PHI)

• AGE: OCR• WHO: Participants• DEL: In writing• TIM: Within 60 days of discovery of breach• PEN: Ranges from $100 to $1.5 millionUp to four notices are required:

Business Associates to Covered Entity

Covered Entity to participants

Covered Entity to HHS

Covered Entity to prominent

media outlets

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COBRA Notices

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GeneralNotice

QualifyingEvent Election

Notice

Notice ofUnavailability

OpenEnrollment

PlanChange

EarlyTermination

ConversionNotice

InsignificantPremium

Underpayment

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General Notice

• PUR: To notify participants of their basic COBRA rights and responsibilities

• AGE: EBSA• WHO: Participants• DEL: First class mail, Single Notice Rule applies• TIM: Within 90 days of enrollment• PEN: Up to $110 per day

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Qualifying Event Election Notice

• PUR: To inform Qualified Beneficiaries (QB) of continuation coverage rights

• AGE: EBSA• WHO: QBs who experience one of seven Qualifying

Events• DEL: First class mail• TIM: Within 44 days of Qualifying Event or LOC• PEN: Up to $100 per day

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Notice of Unavailability

• PUR: To notify individuals why requested COBRA coverage is unavailable

• AGE: EBSA• WHO: QB who notifies employer of divorce/legal separation,

dependent ceasing eligibility, secondary events, Social Security disability award

• DEL: First class mail• TIM: Within 14 days of receiving request• PEN: UP to $110 per day

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Open Enrollment Notice

• PUR: To provide same rights that similarly situated active employees have

• AGE: EBSA• WHO: QBs• DEL: First class mail• TIM: Same timing as similarly situated active employees• PEN: Full measure of COBRA penalties, including $110 daily

penalty

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Notice of Plan Changes

• To be discussed under SMM requirements

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Notice of Early Termination

• PUR: To explain why COBRA is terminating before maximum coverage period ends

• AGE: EBSA• WHO: QBs who experience a terminating event• DEL: First class mail• TIM: As soon as practicable• PEN: Up to $110 per day

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Conversion Notice• PUR: To notify of any conversion rights at the end of the

maximum coverage period• AGE: EBSA, state insurance departments• WHO: QBs who exhaust COBRA coverage• DEL: First class mail• TIM: Within 180 days of COBRA expiration• PEN: Up to $110 per day

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Insignificant Premium Underpayment

• PUR: To provide additional 30 days to make up an insignificant premium shortfall

• AGE: EBSA• WHO: QBs who make an insignificant premium underpayment• DEL: First class mail• TIM: The sooner the better; 30 day clock starts when notice is sent• PEN: Failure to send notice constitutes acceptance of paymentInsignificant premium underpayment is lesser of:

10% of premium or $50

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Insignificant Underpayment Period

March 1Due date

April 5Notice of

InsignificantUnderpayme

ntsent

May 5End of

insignificantunderpaymentgrace period

March 25Insignificant

underpaymentreceived

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Medicare Notices

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Medicare Part D Participant Creditable/Non-Creditable Coverage Notice

• PUR: To notify participants of creditable status of prescription drug coverage

• AGE: HHS Centers for Medicare and Medicaid Services (CMS)• WHO: Medicare Part D-eligible participants• DEL: First class mail• TIM: Before October 15, upon change in creditable status, upon request• PEN: None specified but could incur fiduciary liability

Three types of notices:

Creditable Coverage

Non-Creditable Coverage

Personalized Notice31

MedicarePart D CMS Creditable/Non-Creditable Coverage Notice

• PUR: To notify CMS of Creditable status of prescription drug coverage

• AGE: CMS• WHO: CMS• DEL: On-line• TIM: Within 60 days of start of plan year• Pen: Unspecified

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Medicare Secondary Payer ReportingMedicare, Medicaid, and SCHIP Extension Act (MMSEA) Section 111

• PUR: To disclose to CMS participants who may be enrolled in Medicare

• AGE: CMS• WHO: CMS• DEL: Electronically by Responsible Reporting Entity• TIM: Quarterly• PEN: Up to $1,000 per day per individual

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Medicare Secondary Payer Reporting Cont.• Applies to:

– HRAs– Insured and self funded medical plans

• Does not apply to:– Health FSAs– Health Savings Accounts– HIPAA-excepted benefits

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WHCRA Notice

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Women’s Health & Cancer Rights ActWHCRA

• PUR: To notify participants of benefits related to breast surgery & reconstruction

• AGE: EBSA• WHO: Participants• DEL: With SPD and other plan materials• TIM: At initial enrollment and annually• PEN: Up to $110 per day

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ACA Notices

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Summary of Benefits and Coverage• PUR: To provide a “four-page” summary of benefits for plan comparison

purposes• AGE: EBSA, CMS, IRS• WHO: Participants• DEL: With enrollment materials• TIM: March 23, 2012, then 30 days before plan year or 60 days before

material modification and upon request• PEN: Up to $1,000 for each failure and $100 daily IRS excise tax

March 23, 2012 start date was delayed to September 23, 2012

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Grandfathered Plan Notice• PUR: To alert participants to plan’s grandfathered

status, exempting it from some reform requirements• AGE: EBSA, CMS, IRS• WHO: Participants• DEL: With plan materials• TIM: Provided at same time plan materials are provided

(i.e., initial & open enrollment)• PEN: Loss of grandfathered status

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Patient Protection Notice• PUR: To notify participants of rights to choose primary

care provider, OB/GYN & pediatricians• AGE: EBSA, CMS, IRS• WHO: Participants• DEL: With SPD and other plan participants• TIM: Provided at same time SPD and plan materials are

provided (i.e., initial & open enrollment)• PEN: Unspecified

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Notice of Exchanges

• Employers must provide it prior to January 2014; however no date has been determined

• Explains how exchanges work• Explains how employers fund coverage• Explains how exchanges work with Medicare and Medicaid

ERISA Notices

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• Summary Plan DescriptionsSPD

• PUR: To notify participants of basic rights under ERISA plan• AGE: EBSA• WHO: Covered employees• DEL: Within 90 days of enrollment, within 120 days of plan formation, every

five years• TIM: At initial enrollment and annually• PEN: Up to $110 per day

SPDs have numerous specific content requirements; typical insurance documents do not satisfy these requirements

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Summary of Material ModificationsSMM

• PUR: To notify participants of material modifications to ERISA plan (e.g., benefit reductions, cost changes)

• AGE: EBSA• WHO: Covered employees• DEL: Sent in a manner “reasonably calculated to ensure receipt”

(e.g., first class mail)• TIM: Within 210 days of plan year end, within 60 days of change for

material benefit reductions• PEN: Up to $110 per day

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Summary Annual ReportSAR

• PUR: To provide participants a report that mirrors Form 5500• AGE: EBSA• WHO: Participants• DEL: First class mail or electronically• TIM: Within two months of Form 5500 deadline, including

extensions• PEN: Up to $110 per day

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Form 5500Annual Benefit Plan Report

• PUR: To provide EBSA on ERISA plans with 100 or more participants• AGE: EBSA• WHO: EBSA• DEL: Electronically (EFAST)• TIM: End of 7th month after plan year (e.g., July 31st for calendar plan

years), 2 ½-month extension available• PEN: Civil fine: up to $1,000 per day, Non-filers: $50 per day & potential

criminal liability for willful violations

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Action Plan

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• Click on link to go through DOL steps http://www.dol.gov/elaws/posters.htm

• Subscribe to Thompson HR publication

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Action Plan• Create a master list of all notices and disclosure your

organization must comply with• Communicate throughout the organization about the key

expectations regarding those laws• Include summaries of the laws as appropriate in the

employee handbook• Provide training for supervisors and managers as to the

operational requirements

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Resources

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Resources • www.dol.gov/ebsa• www.infinisource.com• www.dol.gov/whd• www.irs.gov• http://www.dol.gov/elaws/posters.htm• General EEOC Notice• 29 USC §627

www.nahu.org/education/programs/compliance.cfm• www.dol.gov

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