IN FOCUS: New HIPAA Rules Affecting Employee Communications
New Rules for Summary Plan Descriptions ("SPDs") of Group Health Plans.
Generally, group health plans must amend their SPDs to comply with the following requirements and distribute the amended SPDs (or Summaries of Material Modifications) to participants no later than 60 days after the first day of the first plan year beginning after June 30, 1997.
- The SPD for a group health plan must indicate the name and address of any insurer involved with the plan and describe (i) the extent to which benefits are insured by such insurer and (ii) the nature of any administrative services provided to the plan by such insurer.
- The statement of ERISA rights in the SPD must include the following new model language:
If you have any questions about this statement or about your rights under ERISA, you should contact the nearest office of the Pension and Welfare Benefits Administration, Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries of the Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue N.W, Washington, D.C. 20210.
- The SPD for a group health plan must include a statement indicating that health plans and health insurance issuers offering group coverage generally may not, under Federal law, restrict benefits for hospitalization in connection with childbirth for the mother of a newborn child to less than 48 hours following a normal vaginal delivery, or less than 96 hours following a Caesarean section, or require the provider to obtain authorization from the plan administrator or the insurance issuer for prescribing a length of stay not in excess of the above periods. This information must be furnished to plan participants and beneficiaries no later than 60 days after the first day of the first plan year beginning on or after January 1, 1998.
Summary of Material Modifications in the Event of a Material Reduction of Benefits.
In general, an employer is required to notify participants of benefit plan changes by distributing a Summary of Material Modifications within 210 days after the end of the plan year in which the change was adopted. Under HIPAA, for plan years beginning after June 30, 1997, a group health plan must provide each participant or beneficiary with a Summary of Material Modifications within 60 days after any change to the plan that results in a material reduction of covered services or benefits.
A Summary of Material Modifications is not required if the reduction in benefits is described in a plan newsletter or other communication that is received by employees at regular intervals of 90 days or less, as long as the communication otherwise meets the regulatory requirements for a Summary of Material Modifications.
Requirement to Provide Notice of Special Enrollment Rights.
Effective for plan years beginning after June 30, 1997, a group health plan must provide employees with a description of HIPAA's special enrollment rules at or before the time enrollment is offered to the employee. A plan may satisfy this requirement by inserting the following model language from the regulations into its enrollment form.
If you are declining enrollment for yourself or your dependents (including your spouse) because of other health insurance coverage, you may in the future be able to enroll yourself or your dependents in this plan, provided you request enrollment within 30 days after your other coverage ends. In addition, if you have a new dependent as a result of marriage, birth, adoption, or placement for adoption, you may be able to enroll yourself and your dependents, provided you request enrollment within 30 days after the marriage, birth, adoption, or placement for adoption.