In the last few weeks, there have been several pieces of COVID-19 legislation, with corresponding subsequent guidance, that included provisions affecting employee benefits plans. ERISA plans are required to update their plan documents within a specified period of time if there is a change in the Plan; the timeframe of which depends on the value of the change and it’s likely importance to the participants/beneficiaries in making their healthcare decisions.
Due to COVID-19 changes affecting private employer-sponsored health plans, a Summary of Material Modification (SMM), or amendment, is likely required. While there have been even more employment law changes ( think paid leave) in the latest round of rulemaking, there are a few significant benefits changes that would warrant a SMM. (For employment law issues such as leave policies, consult your employment law specialist).
- SMM mandated for ERISA Plans within 210 days of a significant change to the health plan. (Reduction in benefits is 60 days).
- Legal cases have opined to use common sense in the timing of SMMs and deliver sooner if it makes sense. We recommend the conservative 60 day timeframe.
- If you have a HDHP, HSA, Flexible Spending Account, telehealth and employees on health benefits, this will likely affect your group health plan.
- Third-Party Administrators (TPA) and your insurers are a great resource to obtain SMMs.
- Consider if any other plan documents (Summary of Benefit and Coverage {SBC}) contain relevant language requiring amendment.
- Unrelated to insurance, although with clear overlap to benefits – update leave and telecommuter policies to comply with new Emergency Paid Sick Leave (EPSL), Emergency Extended FMLA (EFMLA) and furlough benefits treatment.
For those who are self-funded/level-funded, there may be a cost for those mandated plan documents. Insured plans receive these documents from the insurer, but there may be a delay in receiving an updated Summary Plan Description (SPD) or SMM. Leavitt Group Compliance recommends using a wrap document, where possible, to allow employers to fill in the gaps where insurer documents are insufficient as to the Plan Sponsors’ specific terms, or not timely provided. Consult your insurance broker for more details. If you are a Leavitt Group client, we can help by providing you a SMM. If you are not a client, why not contact us now? We will be your true partner in compliance – helping you navigate the complex world of employee benefits. We love it!
COVID-19 SMM Should Include:
- HDHP/HSA pre-deductible for telehealth services and with no cost-sharing for COVID-19 related testing (and in some States such as California insured plans must also have no cost-sharing for treatment – consider adding language here if this may be your case).
- OTC Medical Product reimbursable.
- Diagnostic testing with no cost-sharing / payment of testing to provider required.
- COVID-19 vaccine covered with no cost-sharing 15 days from federal approval.
- How benefits are handled during Emergency Paid Sick Leave & Emergency Extended FMLA and Furloughs.
- Include link to FFCRA notice to serve as a distribution method.
This information was accurate as of the date of this writing. This information is educational only and not intended as legal advice. Please refer to ERISA plan document specialists and your own legal professional to ensure compliance with all applicable law.