On Monday, NAHU sent a letter to the Department of Labor’s ERISA Advisory Council in response to its request for comments on reducing the burden and increasing the effectiveness of mandated disclosures concerning employment-based health benefit plans in the private sector. The DOL is seeking to eliminate, consolidate and modify several notices, which we expressed our support for, noting the challenges that employers of all sizes face in complying with ERISA and its related amendments. In addition to the DOL’s proposed changes, we recommended that the Advisory Council consider revising the electronic-distribution rules related to ERISA disclosure requirements.
The Department of Labor requested comments on three recommendations:
1. The elimination of the Summary Annual Report requirement for health benefit plans not already exempt
2. The consolidation of each of the various annual notices into a single annual notice issued in a standard format
3. The modification of the Summary Plan Description (SPD) requirements to allow a short resource reference tool updated annually.
We noted our support for each of these proposals in our comments, stressing the administrative burden the current requirements place on employers:
• Noted that the Form 5500 document is virtually meaningless to most employees, there is rarely a genuine need for this summary report information for consumer-protection purposes, and annually preparing it creates an unnecessary burden for affected plans.
• Expressed support for consolidation of forms and encouraged them to extend the effort to both notices that must be delivered distinctly and notices that may be included as part of the greater plan documents. We also suggested the development of a comprehensive model notice template for employers.
• Expressed support for the need for a reference tool and requested the council to develop more official compliance resources for employers to use relative SPD development and updates. We also suggested that the proposed SPD tool should complement the summaries of benefits and coverage (SBC) notices.
• Recommended that the Advisory Council consider adding the modernization of the electronic-distribution rules related to ERISA disclosure requirements to its agenda, given that these requirements were finalized more than a decade ago and technology has changed considerably during that time.
• Suggested that any modernization of electronic-distribution requirements be harmonized between the DOL and the Treasury Department so that employers and employees are not subject to different requirements based on the agency requiring the disclosure.