Simplifying Insurance
Surviving a
Department of Labor (DOL)
Audit
Insurance | Employee Benefits | Risk Management | Financial Strategies
simplifying Insurance |
Background
The Employee Retirement Income
Security Act of 1974 (ERISA) establishes
reporting provisions and participant
requirements for all private employer
health & welfare benefit plans.
Expanded several times to include other
health laws.

COBRA, HIPAA
DOL enforces ERISA
simplifying Insurance |
General ERISA Requirements
Plan Document

A Plan Document is the written document(s)
describing plan terms and conditions,
including some general ERISA-required
provisions
 Includes insurance contracts, policies, riders and
third party administrator (TPA) service agreements

Must be distributed upon request (within 30
days after written request, to avoid penalties).
simplifying Insurance |
General ERISA Requirements
Summary Plan Description (SPD)


A SPD is the written document(s)
summarizing the plan (WRAP is the common
format as most benefit books do not contain
all the required items)
Time frames for distribution:
 upon plan enrollment; and
 every 5 years (plan has been modified) or
 every 10 years (no plan modifications)

Must be distributed to participants and any
beneficiaries entitled to benefits
simplifying Insurance |
General ERISA Requirements
Summary of Material Modifications (SMM)


A SMM is the written document summarizing
the changes to the SPD
Must be distributed within 210 days after the
end of the plan year
 If an updated SPD is distributed, no SMM is
required

Must be distributed to participants and any
beneficiaries entitled to benefits
simplifying Insurance |
General ERISA Requirements
Summary of Material Reduction in
Covered Services/ Benefits (SMR)



A SMR is the written document summarizing
the reductions to the health (medical) plan
Must be distributed within 60 days
Must be distributed to participants and any
beneficiaries entitled to benefits
simplifying Insurance |
General ERISA Requirements
Annual Report

An Annual report is the 5500 filed with the
DOL and Internal Revenue Service (IRS)
disclosing financial aspects of the plan
 Exemption for small plans with less than 100
participants at the beginning of the plan year


Must be filed annually within 7 months of the
end of the plan year; and
Must be distributed to participants upon
request
simplifying Insurance |
General ERISA Requirements
Summary Annual Report (SAR)



A SAR is the written document summarizing
the Annual Report (5500)
Must be distributed within 60 days of the 5500
filing
Must be distributed to participants and any
beneficiaries entitled to benefits
simplifying Insurance |
General ERISA Requirements
Internal and External Claims and Appeal
Procedures




These are the written document(s) describing
the procedures for claims and appeals
Generally distributed by the insurer or TPA
Recommendation: Include PPACA
amended language in all WRAP
documents
Must be distributed to participants and any
beneficiaries entitled to benefits
simplifying Insurance |
General ERISA Requirements
COBRA Requirements






Initial COBRA notice
COBRA election notice
Notice of unavailability of COBRA
Notice of COBRA early termination
Exemption for Government & Church plans
and small plans (less than 20 employees)
Specific timing and distribution
requirements for bullets 1-4
simplifying Insurance |
General ERISA Requirements
HIPAA Portability Requirements

Certificate of Creditable Coverage
 This is the document that certifies the time the
participant was covered under another group
health plan
 Must be distributed upon loss of coverage
(generally distributed by the insurer or TPA)
 Must be distributed to participants and
beneficiaries who lose coverage
simplifying Insurance |
General ERISA Requirements
HIPAA Portability Requirements cont.

Notice of Preexisting Condition Exclusion
 Must be distributed with enrollment materials
 Must be distributed to participants
 Individual notice must be distributed to participants
who present a certificate of creditable coverage

Notice of Special Enrollment Rights
 This is the document that describes all of the
special enrollment rules (marriage, birth, etc.)
 Must be distributed prior to or during enrollment to
all covered employees
simplifying Insurance |
General ERISA Requirements
Misc. Notices

Women’s Health and Cancer Rights Act
 Must be distributed with initial enrollment materials
(all covered employees) and annually
(participants)

Newborns’ and Mothers’ Health Protection Act
 Must be distributed with initial enrollment materials
(all covered employees) and annually
(participants)
simplifying Insurance |
General ERISA Requirements
Misc. Notices cont.

CHIPRA
 Must be distributed annually to all employees

Michelle’s Law
 Must be distributed at the time that a plan requires
certification of student status to any applicable
participants

HIPAA Wellness Program
 Must be distributed if there is a reward based on
outcome annually to all employees
simplifying Insurance |
General ERISA Requirements
Misc. Notices cont.

Medical Child Support Order
 Must be distributed upon receipt and qualification
to the applicable participant

USERRA
 Needs to be posted in the workplace (no
distribution requirement if posted)

FMLA Notice and Written Guidance
 Needs to be posted in the workplace (no general
distribution requirement if posted)
 Must be distributed to any applicable
participants
simplifying Insurance |
General ERISA Requirements
Misc. Notices cont.

HIPAA Privacy and Security
 Notice of Privacy Practices
 Notice of Breach of unsecured PHI
 Specific timing and distribution requirements
for the above items

PPACA Grandfather Status
 If any part of the plan is grandfathered, this must
be distributed whenever plan information is
provided
 Must be distributed to all participants
simplifying Insurance |
General ERISA Requirements
Misc. Notices cont.

GINA
 Needs to be posted in the workplace (no general
distribution requirement if posted)

W-2 Reporting of Health Insurance
 Aggregate cost of coverage must be disclosed
 Effective beginning January 2013 for 2012
coverage

Summary of Benefits Coverage (SBC) and
Advance Notice of Mid-Year Changes
 Look for an update on this soon!
simplifying Insurance |
Penalties
Generally $110/ day per participant who
requests the document (SPD, SAR, all
notices, etc.)
Penalties can be increased if the issue is
brought before the court
Special Exceptions:


5500- Up to $1,100/ day per return
HIPAA Breach- Specific (significant) penalties
simplifying Insurance |
Conclusion
Questions?