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Employers Get More Flexibility, No Extension in Health Care Plan Communications Rule

Benefit experts had hoped the administration would provide another extension, but none was provided in a batch of frequently asked questions issued March 19 by the departments of Health and Human Services, Labor and Treasury.

March 21, 2012
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Employers will receive additional flexibility, but not an extension to comply with rules dictated by the health care reform law that will require them to revamp how they communicate and explain their health care plans.

In February, the Obama administration delayed by six months the requirement to distribute to employees the new summary of benefits and coverage statement.

The requirement will go into effect for plan years that begin on or after Sept. 23, 2012. For example, if a plan year begins on Jan. 1, 2013, and the employer's open enrollment period is from Oct. 1 to Nov. 1, the new SBC would have to be available by Oct. 1, 2012.

Benefit experts had hoped the administration would provide another extension, but none was provided in a batch of frequently asked questions issued March 19 by the departments of Health and Human Services, Labor and Treasury.

"They missed the most important issue. There is no hint of any delay in the compliance date," said Andy Anderson, a partner with Morgan Lewis & Bockius L.L.P. in Chicago.

Still, regulators said they do not intend to impose penalties during the first year the requirement is in effect so long as employers are working in "good faith" to comply.

"That's a good attitude," said Anne Waidmann, a director with PricewaterhouseCoopers L.L.P. in Washington.

Clarifications made by regulators in the FAQs include making clear that separate summary of benefits and coverage statements do not have to be provided for each coverage tier.

"Plans and issuers may combine information for different coverage tiers in the SBC, provided the appearance is understandable," regulators said.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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