This is never truer than for employers that offer health and welfare and/or retirement benefits to employees. Your reward for spending a lot of money, aside from providing employees with valued benefits, is an endless series of regulations and requirements.
- Among the more onerous and under-appreciated requirements are reporting and disclosure to employees – SPDs, SARs, SMMs, CHRIPA, COBRA, Plan Documents, and so forth.
- For health and welfare plans alone, there are about 30 different required notices and disclosures.
As a practical matter, many employees ignore the notices. Nevertheless, employers and plan sponsors must follow the reporting and disclosure rules. And, there are consequences for failure to comply – in some cases cash penalties.
To best understand what you are required to do, the information is broken down by new hire, ongoing employment and end of employment. For this article, we will concentrate on H&W notices for new hires.
REQUIREMENTS & RECOMMENDATIONS
When an employee is onboarded or attends new hire orientation, certain benefit plan documents and notices should be provided. Legally, you do not have to distribute all of them at hire. However, it may be less complicated to distribute the documents/notices or a link to your online system, at that point and to take the opportunity to explain what the employee is receiving. This will also enable you to more easily maintain records of what has been distributed, when, and have the employee acknowledge receipt.
- Summary Plan Description (SPD) – must be distributed within 90 days of the employee’s becoming covered. However, why wait? Handing it to the employee or giving them the link is a good opportunity to talk about your plans and where to find information.
- Summary of Material Modification (SMM) – only required if you haven’t updated your SPD.
- COBRA General Notice – strongly urge you provide this to your new employees during onboarding. That way you won’t have employees calling you later to ask why you cut off their health insurance coverage because they see COBRA and assume the worse.
- Notice of Special Enrollment Rights – this needs to be distributed before the employee is offered the opportunity to enroll and describes when they may enroll other that during Annual Enrollment.
- Women’s Health & Cancer Rights Act (WHCRA) Notice – describes benefits for post-mastectomy services. This must be provided no later than the time of enrollment.
- Summary of Benefits Coverage (SBC) & Uniform Glossary – your group insurer will provide this to the plan and you must distribute with enrollment materials.
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- Summary of Benefits and Coverage Notice of Modification – only if your SBC is not up to date.
- Notice Regarding Designation of Primary Care Provider – if the plan requires a participant to select a PCP, this must be provided. Generally, provided with the SPD or other descriptive materials.
- Employer Notice to Employees of Coverage Options – discloses the existence of the Marketplace and possible financial aid. Must be provided to all new employees.
- CHIPRA – informs employees of premium assistance available in their state. This must be distributed annually; however, it is advisable to distribute to new hires as well.
Employers may also want to include additional communications explaining what all of these notices are and that the employer is mandated to provide them.
If you need assistance with developing any of these notices, communicating with employees about the notices, or developing checklists, Trinity HR Consulting can help.
- This includes conducting an audit of your benefit plans to identify issues & provide specific corrective actions to avoid the consequences of violations.
- Email me at KathleenSholinsky@TrinityHR.net or Trinity at info@TrinityHR.net
- Visit our website at www.TrinityHR.net
- Call us at 865.905.1762 or Toll Free at 877.228.6810
Author: Kathleen Sholinsky, Senior Consultant
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