Over the past several months, there has been a spate of federal legislation and corresponding guidance related to COVID-19 that requires group health plan changes and allows voluntary changes aimed at removing barriers to care and minimizing the impact of the pandemic on employees’ pocketbooks.
Mandatory changes include first-dollar coverage for COVID-19 diagnostic testing and certain related services, as well as the suspension of certain deadlines during the “outbreak period.” Voluntary changes employers may also wish to implement include relaxed deadlines and increased carryover allowances for FSAs, an expanded ability for employees to make certain mid-year changes to health plan and FSA elections, and easier access to qualified retirement plan account balances through increased loan limits and penalty-free early withdrawals. (See our articles published on July 2 and July 13 for additional information.)
Under ERISA, when an employer makes material changes to a covered plan, it must provide notice to participants in the form of an updated Summary Plan Description (SPD) or a separate Summary of Material Modifications (SMM) that then becomes an addendum to the SPD. These documents must generally be provided to participants no later than 210 days after the close of the plan year in which the change was adopted (July 30, 2021 for changes made to calendar-year plans in 2020). However, since the relief provided by these particular changes is subject to expiration, employers should consider making the notifications sooner than required so that participants can avail themselves of the enhancements while they are still available.
While fully insured plans should receive the required documentation from their insurer, the timing of their delivery may not be prompt enough to make them useful for affected participants. Self-funded plans are responsible for producing their own documentation. For both types of plans, employers may find that using a Wrap Plan document is the easiest way to control the content and timing of these important notifications.
Workers are relying on their employers for guidance during these difficult times. Wise leaders will step up and provide their employees with timely and accurate information about their benefits so that they can successfully navigate these uncharted waters and continue to be productive in their jobs.