Employers are worried the proposed federal requirements on employee benefits communication could cause greater financial stress on businesses by demanding additional administrative work in an effort to remain compliant, says HighRoads, a benefits management and Employee Retirement Income Security Act compliance firm.
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Based on the current guidelines, summary plan descriptions (SPDs) are required to be distributed to employees regarding their health plan coverage, and the Department of Health and Human Services is proposing a Summary of Benefits and Coverage (SBC) that would create thousands of new summary documents, which, in some cases, would be duplicative of SPDs.
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"At the outset, HighRoads believes the three agencies (Health and Human Services, Treasury and Labor) deserve credit for acknowledging the potential for duplication with the statutory requirements in the Affordable Care Act and the existing requirements of federal law for large employers," says Eric Parmenter, vice president of consulting at HighRoads. "In addition, we appreciate that the agencies are specifically seeking comment on areas of the rule where there is a potential for regulatory overkill.
"We know that Congress clearly intended the SBC be a meaningful document for employees. Our clients realize the need for optimum clarity in communicating health care benefit information but they are concerned about the additional administrative burden and financial cost that may result in implementing the new summaries."
Still, Kim Buckey, SPD practice lead at HighRoads, believes there is potential for positive results once the regulations take effect, which are planned for March 2012.
"These new regulations represent an important step forward in setting the standard for simple, clear communications about health plans," Buckey says. "While the SBCs are considered a supplement to SPDs, I see them as an important step in improving the overall quality of SPDs. If the SBC is incorporated into the SPD itself — and I think it should be — the rest of the SPD will need to be rewritten to the same standard of clarity and readability.
"Since the SBC is so comprehensive, it can replace much of the content typically found in the SPD. And the uniform definitions proposed by the regulations can either replace any existing glossary section or be incorporated by reference, further shortening the SPD itself. Anything that encourages employees to pick up their SPD is a good thing."
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