What health reform demands of employee communication

New disclosure and notification requirements to add to your to-do list

Enrollment preparations are in full swing now. On a parallel track, you’re incorporating the new requirements of health care reform into your plans (for most employers) for January 1, 2011. Communicating plan design change—like new dependent eligibility rules—is just a routine challenge for you. But, did you know that the Department of Labor has issued sample disclosure language for three of the required changes?

This is just the first of many new disclosure requirements that will become part of your team’s agenda. As soon as next summer, you need to plan for at least two new unique pieces of communication, plus up to four more notices, mandated by the Affordable Care Act. We’ve got ideas on how to make these useful to you, while satisfying the new mandate. Why? There are two ways to skin a legally required communication—do you want to do it well, or just legally?

Your new to-dos?

While final regulations will tell us a lot about new disclosure requirements, here are the six items we see landing on your to-do list:

• Notice of key plan design changes effective 1/1/11 (during enrollment)
• Summary of material changes (2012)
• Summary of medical coverage (2012)
• Description of all disease management programs (2012)
• Automatic medical enrollment and opt-out actions (TBD—likely 2013)
• Notification of exchanges and “free choice vouchers” (2013)
• Description of claims process (TBD)

Notice of key plan design changes—this summer

The Department of Labor (DOL) has issued some sample language on key changes that will take effect (for most employers) January 1, 2011.

Compliance should be easy for you BY

1. Restating the meaning of the legal text in your enrollment campaign materials (print or online)
   AND
2. Incorporating legal text in your print enrollment notice

But, coordinating the special 30-day enrollment window for dependents and those impacted by lifetime maximums may make for some tricky communication.

Our point-of-view:

This is the first sample language issued, and to be frank, we were hoping for more simple, straightforward text. You’ll need to translate for employees to avoid unnecessary questions.

Sample disclosure language issued by DOL

• Annual and lifetime limit changes
• Revised dependent eligibility for older kids
• Primary care physician designation and OB/GYN self referral change

Summary of material changes—2012 (Section 2715(4))

You need to send a written summary of any plan changes at least 60 days prior to the beginning of your plan year. This shouldn’t be a big deal for most employers IF

1. You send out your enrollment materials in October, describing changes AND
2. You don’t make any changes to the design after that.

We’ve seen lots of employers tweak plan design as they write their SPDs. Why? Sometimes the nitty gritty just doesn’t come up until then. You’ll have to watch out for this.

Open questions

Secretary of Health and Human Services (HHS) will develop standards for compliance by March 23, 2011, with these notices required by March 23, 2012. We’re watching the HHS guidelines to see if they address:

• Will standard language be required?
• Will this requirement replace the Summary of Material Modifications (SMMs) that is mandated under ERISA?

Summary of your medical plans—2012 (Section 2715)

You’ll need to create a summary of your medical plan, sometimes called a “uniform explanation of coverage.” The summary must include specific content and definitions, be no longer than 4-pages, and be written in language that is “linguistically” and “culturally” appropriate. Oh, and the font can’t be smaller than 12-point.

Open questions

HHS will issue more complete requirements by next March. We want to know:

• Can this requirement be satisfied online through a benefits website?
• Will each plan option need to be a separate summary—including all retiree plans?
• Is there any issue with satisfying this requirement early, in enrollment communication?

We’re hoping this summary becomes a great example of simple, clear communication—but that will be difficult given the complexity of plan details and the mistakes so often made with comparison charts and plan summaries. Of particular interest is how HHS will define “culturally appropriate” in their requirements. Translation is already a key component of a successful communication strategy for many companies but will HHS now require benefits information to be translated? Plan sponsors are engaging in rich conversations about cultural translation to drive better results in 401(k) plans. An area to watch!

Summary of your plan’s care management programs—2012 (Section 2717)

For your self-insured plans, you’ll need to craft language describing all the care management programs that your insurance administrative partner offers to participants, including case management, disease management and wellness and administrative programs to improve patient safety. If you offer fully-insured plans, your insurance administrator will handle this requirement. You’re required to have this content to employees by March 23, 2012. In practice, you may prefer to merge this requirement with 2013 enrollment communication (for plan years that begin January 1) and to all new hires thereafter.

If you have a well established wellness and disease management program, this will likely be an easy requirement to fulfill. If not, you may want to start introducing these concepts to employees before they read this potentially scary legal language.

Open questions

HHS will develop standards for compliance by March 23, 2011, addressing these key questions:

• Can this language be embedded in enrollment communication?
• Will there be requirements on the way this content is delivered to participants—the language, the length, or the font-size?

Notice of automatic enrollment—likely in 2013 (Section 1511)

Employees and new hires must be notified that they are automatically being enrolled in medical coverage and what actions they must take to opt-out.

Open questions

HHS may have more to say about this specific requirement in the future, such as:

• Is this a notice that can be embedded in other communication?
• Can this notice be delivered online?
• Will there be requirements on the way this content is delivered to employees—the language, the length, or the font-size?
• Are there any requirements for retirees currently eligible for an employer-sponsored plan?

Notice of eligibility for health insurance exchange—2013 (Section 1512)

You need to provide a print notice with information about the state-run exchanges and an employee’s ability to shop for coverage there. The notice should also include the conditions that make an employee eligible for premium credits and what happens if the employee chooses a plan from the exchange versus the employer-sponsored plan. Starting March 1, 2013, all employees and new hires must be informed of the new exchanges.

Open questions

A lot will be learned once the states establish their exchanges. That should happen sometime in 2013, so that Americans can comply with the individual mandate for coverage by January 1, 2014. Once we grasp the complexity of the consumer shopping experience—including both the administrative system that accepts enrollment and the supporting consumer education—we’ll have more to say about this requirement. We’re watching out for:

• What consumer educational materials will be available?
• Will the enrollment timeframe be consistent across all states?
• What kind of detail will be required, impacting the required variability of the notices?
• Will there be requirements on the way this content is delivered to employees—the language, the length, or the font-size?

Description of claims process—timing uncertain

You’ll need to explain your new claims process—in a culturally and linguistically appropriate way. You’ll also need to notify participants of any state health insurance ombudsman.

Open questions

HHS will provide details on an external claims review process required of self-insured plans, including clarification on:

• Are grandfathered plans impacted by this section of the law?
• When must plan sponsors comply?
• How does this requirement and current SPD language about the claims and appeal process differ?
• Will there be requirements on the way this content is delivered to participants—the length, or the font-size?

Cozy up to your legal friends

Start the conversation with your in-house or external counsel now about the opportunities embedded within these legal disclosures. If the concept of less jargon frightens them, try referring them to Sec. 2715 of the PPACA, about the new standards for a medical plan summary. Basically, it says you can’t summarize benefits using legalese. In legalese, here’s what the law says: “The standards shall ensure that the summary is presented in a culturally and linguistically appropriate manner and utilizes terminology understandable by the average plan enrollee.”

(HINT: If your teammate doesn’t crack a smile at this, you might need to flex your advocacy muscle with senior leaders instead.)

Our opportunity is here

No doubt, this is daunting. We too see a long haul ahead. In addition to waiting for and then interpreting HHS guidelines, you’ll be crafting company-specific messages about medical benefits. Each business is unique. And so are the medical plans they offer. There is no template to announce those changes. It’s up to you.

But, as long as your organization is planning to continue to offer health care benefits to employees, see the PPACA as a rare chance to draw attention to health and wellness efforts. Change can be unsettling but it can also create a priceless opportunity to transform the way your employees perceive and use their benefits. These new requirements are new avenues for open and honest communication that ideally will make your employees the better health care consumers you’re hoping for.

We’d like to help you be successful and use health care reform as a catalyst for that positive change. We’ll be updating this blog with suggestions, tips and more sample language. If you have specific questions or would like help creating a long-term strategy, please give us a call!

Common sense caveat: This article is from Benz Communications, an employee benefits communication consulting firm. We know benefits. We know what your employees care about. We know how to help you bridge the two. We are not attorneys and nothing in this constitutes legal advice or anything coming close to it. In addition, as we all know, the legislation and regulations are in flux. This information is accurate at the time it was published but you should consult the HHS website or other sources for the most up-to-date information at the time you communicate to employees.