Very soon, if a change proposed by the U.S. Department of Labor on the Annual Report (Form 5500) and new Schedule J takes place, every ERISA health and welfare plan, including active major medical and retiree-only major medical and small plans, will be required to file very detailed information regarding their plans, how they are administered, whether claims are paid on a timely basis and if appeals are provided in accordance to DOL regulations. The reason is that the proposed Schedule J form will bring sweeping changes in the way employers provide reports on their health and welfare plans.
With the new proposed Schedule J, plans that provide health benefits will see the most changes in the way they report their plan data to the Department of Labor. The new Schedule J will require a broad array of information, including:
· The number of individuals offered COBRA coverage whether they took it or not (the current rule has no COBRA beneficiary reporting);
· Whether the plan offers coverage for employees, spouses, children or retirees (the current rule has no reporting on participants);
· What type of group health benefits are offered under the plan (for example, health, general surgical, pharmacy or prescription drug, mental health/substance use disorder, wellness program, preventive care, vision, dental, etc.);
· Information on whether the plan is funded through a health insurer and whether benefits are paid through a trust or from an employer's general assets (self-funded);
· Whether the plan has participant or employer contributions (including non-cash contributions);
· Whether there was a failure to timely transmit participant contributions to the plan (currently no such reporting is required);
· Grandfather benefit options (currently, no such reporting is required);
· Did the plan utilize stop loss coverage? If so, total premium payments for stop-loss coverage, and detailed information on the attachment points for this coverage, individual claim limits, and the policy's aggregate claim limits, will be required (currently no such reporting is required);
· Did the plan receive rebates, refunds or reimbursements from a service provider? (currently no such reporting is required);
· Whether the plan's summary plan description (SPD), summaries of material modifications (SMM), and summaries of benefits and coverage (SBC) comply with Federal content requirements; and whether the plan is compliant with HIPAA, GINA, MHPAEA, Newborns’ and Mothers’ Health Protection Act, Women’s Health and Cancer Rights Act, Michelle’s Law and ACA? (currently no such certification is required);
· Detailed information regarding claims, such as how many benefit claim denials were appealed during the plan year; how many appealed claims were upheld as denials, and how many were payable after appeal; whether any claims for benefits were not adjudicated within the required time frames; and the total dollar amount of claims paid during the plan year; and at any time was the employer unable to pay claims at any time during the plan year? (currently no such reporting is required).
SPBA is concerned that many small self-funded employers will not be able to answer these questions without assistance from third party vendors at additional expense and, more importantly, it may take time to respond to the inquiries because special runs will need to be done or new software will need to be developed to capture the information as required by the form. Furthermore, SPBA is asking for an additional 3 years to comply with the Schedule J request for information to ensure that the information provided by employers can be correctly captured in advance of the need for filing a report to the Department of Labor.
What will the Department do with this information? The DOL will use the data collected to find out how many and where small insured and self-funded plans are, how they are administered, and whether they are compliant with all Federal laws. Will employers be ready to certify that they are fully compliant with all Federal laws and attest to that fact?
A second reason that the Department wants this information is to report to Congress about the number of small, fully insured plans or for self-funded welfare benefit plans exist.
Time is of the essence and soon the December 5, 2016 deadline to file your comments on the 5500 Form Schedule J proposed by the Department of Labor will be history. Attached to this email is a copy of the SPBA comment letter filed on behalf of the self-funded industry. It is important for you to go to www.regulations.gov to file your response to the request for comments by the Department of Labor EBSA. Your detailed comments should include as much detail as possible regarding whether you think employers will be able to comply with the request for information. The deadline is Dec. 5, 2016.
For additional information, contact SPBA at 301-718-7722.