3. Opt-out payments and waiver forms

Some companies are choosing to offer opt-out payments to employees who choose to decline medical coverage (e.g., those who are included under their spouses' plans). Employers offer this as a "benefit" to people who would rather receive a payment than opt in for coverage. Unless the limited exception applies, this may impact plan affordability.

From a compliance perspective, it could be beneficial to issue waiver forms to employees who choose to opt out of health care coverage. Although waiver forms are not required by law, documentation to demonstrate an employee's choice to waive coverage is recommended In the event the IRS seeks to penalize the employer for not offering coverage; a signed waiver form is truly the best evidence that coverage was offered and this may help protect the employer. 

4. Grandfathered health plans

While there aren't many grandfathered health plans left since the ACA came into existence in 2010, it's important for grandfathered plans to notify participants that their plans still retain this status. Before you send these notices out, be sure that this status is still accurate, because relatively small contribution or benefit changes can result in the loss of the grandfathered status.

5. Summary of benefits and coverage

Every plan administrator (or insurance carrier for fully-insured plans) is required to provide a Summary of Benefits and Coverage (SBC) to employees at the time of enrollment or re-enrollment. For plans beginning open enrollment after 4/1/17, the new template must be used.

Overall, the changes are designed to improve readability for consumers. The new templates include more information about cost sharing, such as enhanced language to explain deductibles and a requirement that plans address individual and overall out-of-pocket limits in the SBC.

6. Notice distribution

In addition to the two items above, there are many other notices that have to be distributed before and during open enrollment. Given the number of such notices, it can make the process confusing for employees. Thus, it is crucial that employers find effective, and compliant, ways to communicate these notices.

While it may be easier and less expensive to issue electronic notices to employees, the law imposes specific requirements for electronic disclosure. The general rule for disclosure of ERISA documents is that they must be furnished in a manner reasonably calculated to ensure actual receipt of the document by the intended recipient.

Below is an outline of what to consider when sending the required notices:

Applicable to all electronic notices:

1. The system for furnishing the documents is reasonably calculated to result in actual receipt of transmitted information and protects the confidentiality of personal information relating to the individual's accounts and benefits;

2. The electronically delivered documents are prepared and furnished in a manner that is consistent with the style, format and content requirements applicable to the particular document; and

3. The recipient of the document is informed of the significance of the document when not otherwise reasonably evident.

Consent to receive notices electronically is not required when:

1. The participant has the ability to access documents furnished in electronic form at any location where the participant is reasonably expected to perform his or her duties as an employee; and

2. Accessing the electronic information system is an integral part of the participant's duties as an employee. 

Consent to receive notices electronically is required when:

1. The intended recipient has affirmatively consented to receive the documents electronically and has not withdrawn the consent;

2. For documents to be furnished using the internet, the intended recipient has affirmatively consented, or confirmed consent, electronically and in a manner that reasonably demonstrates the individual's ability to access information in the electronic form that will be used;

3. For documents to be furnished using the internet, the individual has provided an address for the receipt of such information; and

4. Prior to consent, the individual receives a clear and conspicuous statement explaining the following:

   • The types of documents to which the consent applies;

   • That consent can be withdrawn at any time without charge;

   • The procedures for withdrawing consent and for updating the address for receipt of electronic documents; and

   • The right to a paper version of an electronically furnished document, free of charge

For some notices, delivery to the employee is treated as delivery to his or her entire household, but certain others must be separately provided to dependents.  For notices that have to be provided separately to dependents, electronic delivery may not be an option. 

Open enrollment can be a hectic time, but keeping the above themes top of mind during the process could be a big help in ensuring compliance, and thus setting your company up to succeed.