As the end of the year approaches, employers must be mindful of important deadlines and prepare for upcoming responsibilities related to their employee benefit plans. For calendar-year plans, specific actions are required by September 30, 2024, and in preparation for open enrollment for the 2025 plan year. Adhering to these deadlines and properly executing the necessary tasks will ensure compliance with federal regulations and support the smooth administration of employee benefits.
For calendar-year employee benefit plans where the Form 5500 filing deadline was not extended, employers must provide a Summary Annual Report (SAR) to plan participants by September 30, 2024. The SAR is required to be distributed within nine months of the close of the plan year unless the Form 5500 filing deadline is extended. Plans exempt from filing Form 5500, such as unfunded welfare plans, are generally not required to provide a SAR.
Employers with fully insured health plans may receive Medical Loss Ratio (MLR) rebates if their insurance issuers do not meet the required MLR percentage for 2023. These rebates must be distributed by September 30, 2024. Employers receiving rebates should assess their legal obligations regarding the use of these funds. Any rebate that qualifies as a plan asset under ERISA must be used exclusively for the benefit of the plan’s participants and beneficiaries. Additionally, to avoid ERISA’s trust requirements, plan sponsors should use the plan asset portion of the rebate within three months of receipt.
For employers with calendar-year plans, it is crucial to begin preparations for open enrollment for the plan year starting January 1, 2025. This process should involve a thorough review of the company’s benefit offerings, collaboration with vendors to make any necessary adjustments, updating benefit limits for 2025, and preparing clear and informative employee communications. Employers who are Applicable Large Employers (ALEs) under the ACA may also need to adjust employee contributions based on the ACA’s affordability percentage for plan years beginning in 2025.
In connection with open enrollment, employers should consider providing the following benefit notices:
Summary of Benefits and Coverage (SBC): Required for group health plans and health insurance issuers, the SBC must be provided to applicants and enrollees during open enrollment or renewal. A federal template is available and must be used by health plans and issuers.
Children’s Health Insurance Plan (CHIP) Annual Notice: If a group health plan covers residents in a state that offers a premium subsidy under Medicaid or CHIP, an annual notice about available assistance must be sent to all employees residing in that state. The Department of Labor (DOL) provides a frequently updated model notice that employers can use.
Women’s Health and Cancer Rights Act (WHCRA) Notice: Group health plans must issue a notice regarding WHCRA coverage requirements at enrollment and annually thereafter. This notice is often included with open enrollment materials, and employers who redistribute their summary plan descriptions (SPDs) annually can satisfy this requirement by including the WHCRA notice in the SPDs.
Summary Plan Description (SPD): An SPD must be given to new plan participants within 90 days of coverage start. Including the SPD in open enrollment materials ensures timely delivery to newly enrolled employees. If the SPD contains notices required at enrollment, such as the WHCRA notice, it should be included with enrollment materials.
COBRA General Notice: Group health plans must provide a written General Notice of COBRA Rights to covered employees within 90 days of their coverage start date. To ensure timely delivery, employers may include the General Notice in open enrollment materials. A DOL model notice is available for use.
HIPAA Privacy Notice (self-insured health plans only): Self-insured health plans must maintain and distribute their own HIPAA Privacy Notices at specific times, including at enrollment. This notice should be included with open enrollment materials. Additionally, at least once every three years, plans must either redistribute the notice or inform participants of its availability and how to obtain a copy.
Special Enrollment Rights Notice: Before or during enrollment, group health plans must provide eligible employees with a notice of their special enrollment rights under HIPAA. This notice is often included in the SPD or the benefits booklet provided by the issuer or third-party administrator (TPA).
Notice of Patient Protections: If a health plan requires participants to designate a primary care provider, a notice of patient protection must be provided when the SPD or similar benefit description is given to participants. This notice is often included in the SPD or benefits booklet provided by the issuer or TPA.
Grandfathered Plan Notice: Employers with grandfathered health plans must include a statement regarding the plan’s grandfathered status in materials provided to participants, such as open enrollment documents. A DOL model notice is available for this purpose.
Staying on top of key deadlines and preparing for open enrollment are critical tasks for employers managing employee benefit plans. By meeting the September 30, 2024 deadlines and ensuring all required notices are provided during open enrollment, employers can maintain compliance and support the effective administration of their benefits programs. Thoughtful planning and timely action will help ensure a smooth transition into the 2025 plan year.
To learn more about Payroll & HR compliance and regulations contact a TPG Administrative Service Specialist today at 909.466.7876!
Also, learn about the News Brief: Employers Plan to Raise Wages 3.9% in 2025 and the July 2024 Compliance Calendar's Important Dates.