By Brian Gilmore | Published August 18, 2023
Question: What are the required annual employer notices to employees related to health and welfare plans?
Short Answer: Employers must provide the Medicare Part D, CHIP, and WHCRA notices annually. All three can be satisfied together by timing their distribution to meet the October 15 Medicare Part D Creditable/Non-Creditable Coverage notice deadline. Multiple other notices are not required to be distributed annually—although employers should consider including some of those additional notices with the required annual notice materials.
The mid-year update of the DOL Children’s Health Insurance Program (CHIP) Model Notice for Employers Regarding Premium Assistance Opportunities marks the unofficial start to the 2024 health and welfare plan annual notice season. The following provides an employer overview for providing such annual notices to employees.
Employers are required to provide the HIPAA special enrollment notice at or before the time an employee is initially offered the opportunity to enroll in the health plan. There is no requirement to distribute the notice annually.
Best Practice: Although there is no requirement to re-distribute the notice annually, we recommend providing it at the same time as the other required annual notices because of the importance of the special enrollment rights.
For more information on HIPAA special enrollment rights, see:
Employers sponsoring a health plan with options that require designation of a primary care provider (e.g., HMOs) must provide the patient protection notice to plan participants whenever an SPD or other similar description of benefits is provided. There is no requirement to distribute the notice annually.
Best Practice: Although there is no requirement to re-distribute the notice annually, we recommend providing it at the same time as the other required annual notices because the DOL asks for evidence the employer provided it to participants in its standard list of documents to be produced in an investigation/audit context. The notice should also be included in the SPD.
Prior to 2022, this notice was not required for plans maintaining ACA grandfathered plan status. Effective as of the first plan year beginning on or after January 1, 2022, the CAA has extended this notice requirement to also include grandfathered plans. Accordingly, both non-grandfathered and grandfathered plans are now subject to the primary care provider designation patient protection notice.
For more information on the significantly expanded ACA protections under the CAA, see:
Employers sponsoring a wellness program that includes medical examinations (e.g., biometric screenings) or disability-related inquiries (e.g., medical questionnaires) must provide an ADA notice addressing how the employer will protect and use information related to the program. There is no explicit requirement in the EEOC guidance to distribute the notice annually.
The EEOC ADA FAQ guidance provides that there is no requirement that employees receive the notice at a particular time. However, it also states that employees should receive the notice before providing any health information, and with enough time to decide whether to participate in the program.
Best Practice: Although there is no requirement to re-distribute the notice annually, we recommend providing it at the same time as the other required annual notices to avoid employees claiming that they were not adequately informed of their ADA rights with respect to the wellness program.
Note that a federal court in 2016 ruled that components of the EEOC wellness program rules do not meet the requirements of the ADA, and the EEOC has accordingly formally removed those aspects of the regulations.
Although the notice component was not removed, the EEOC issued new proposed ADA wellness regulations in January 2021 (the very end of the Trump administration) that would have eliminated the notice requirement. However, the Biden administration removed those proposed regulations shortly thereafter pursuant to a regulatory freeze memo issued on his date of inauguration.
As a result of this chaotic regulatory landscape, it is not clear whether the EEOC is currently enforcing the notice requirement. We feel that the best practice approach is to continue following the EEOC regulations’ notice requirement until we have new guidance specifying the ADA requirements moving forward.
The NMHPA requires employers to include in the SPD a statement describing the plan’s required minimum hospital length of coverage in connection with childbirth for the mother and newborn child.
The NMHPA notice is not an annual notice requirement. DOL guidance confirms that including the NMHPA notice in the SPD is sufficient.
The ACA requires employers subject to the Fair Labor Standards Act (FLSA) to provide the Exchange Notice (also frequently referred to as the “Marketplace Notice” or the “Notice of Coverage Options”) to new hires within 14 days of the employee’s start date. The notice informs employees of how to access alternative individual policy coverage through the Exchange. The Exchange Notice is not an annual notice requirement. Best practice is to include the Exchange Notice in standard new hire materials.
Employers with a self-insured health plan must provide employees with a HIPAA Notice of Privacy Practices describing the plan’s use and disclosure of PHI upon enrollment and within 60 days of a material change to the notice. The HIPAA Notice of Privacy Practices is not an annual notice requirement.
HIPAA does require employers with a self-insured health plan to inform employees of the availability of the Notice of Privacy Practices at least once every three years. Employers with a self-insured health plan may choose to include this Notice of the Availability of the Notice of Privacy Practices with the annual legal notices every third year, or more frequently on a voluntary basis if so desired.
Sample language for the Notice of the Availability of the Notice of Practice Practices:
“The [Enter Plan Name]’s use and disclosure of protected health information (PHI) under its self-insured health plan options is described by a HIPAA Notice of Privacy Practices maintained by [Enter Employer Name]. One of our responsibilities under HIPAA is to periodically remind you of the availability of this Notice of Privacy Practices should you want more information about the Plan’s procedures to protect and secure the confidentiality of your PHI. You may access the Plan’s HIPAA Notice of Privacy Practices by [Enter Method of Accessing Notice]. Contact People Operations if you have any questions.”
For more details:
Covered employees and spouses must receive the COBRA initial notice within 90 days of enrollment. Employers typically delegate this responsibility to the COBRA TPA, which will generally send the notice upon enrollment via U.S. mail addressed to both the employee and spouse to satisfy both obligations. The COBRA initial notice is not an annual notice requirement.
For more details:
The CAA requires employers that maintain a public website for their group health plan to post a Notice Regarding Patient Protections Against Surprise Billing on that site. CMS updated the model notice to a new “Version 2” that must be used for plan years beginning on or after January 1, 2023.
The ACA now requires that employers sponsoring a self-insured, non-grandfathered medical plan post links to machine-readable files containing transparency in coverage cost information if they maintain a public website for the group health plan. The requirement took effect July 1, 2022.
Neither of these new CAA and ACA disclosures are annual notice requirements.
For more details:
Many employers prefer to provide employees with online access to the annual notice materials. Here is a sample message that employers can use to distribute annual notices electronically:
2024 Health Plan Annual Notices
The Company is required by applicable law to provide you with certain notices each year that inform you of your rights and our responsibilities with respect to the Company’s health plan (the “Plan”).
Please carefully review the information contained below and share it with your covered dependents. We suggest you keep this information with your Summary Plan Description (“SPD”) for future reference.
[Company’s Plan Provides Part D Creditable Coverage]
[Company’s Plan DOES NOT Provide Part D Creditable Coverage]
In the event of a conflict between the official Plan Document and these legal notices, the SPD, or any other communication related to the Plan, the official Plan Document will govern. If you have any questions or would like to obtain a paper version of these notices, please contact People Operations.
Lead Benefits Counsel, VP, Newfront
Brian Gilmore is the Lead Benefits Counsel at Newfront. He assists clients on a wide variety of employee benefits compliance issues. The primary areas of his practice include ERISA, ACA, COBRA, HIPAA, Section 125 Cafeteria Plans, and 401(k) plans. Brian also presents regularly at trade events and in webinars on current hot topics in employee benefits law.
The information provided here is of a general nature only and is not intended to provide advice. For more detail about how this information may be treated, see our General Terms of Use.
