A new FAQ (Part XX in the series) addresses the disclosure obligations of an employer that elects to eliminate contraceptive coverage in light of the Supreme Court's Hobby Lobby decision. It describes obligations under ERISA and, specifically, the employer's obligation to update its SPD by adoption of a new SPD or summary of material modifications (SMM).
60-Day Deadline. SMMs generally must be provided by 210 days after the end of the plan year in which a plan modification occurs. However, a modification that is a material reduction in covered services or benefits under a group health plan must be provided within 60 days after the date the modification is effective. The FAQ indicates that a decision to reduce or eliminate contraceptive coverage would be considered a material reduction in covered services or benefits, thereby requiring notice within 60 days.
What About SBCs? Interestingly, the FAQ makes no reference to the summary of benefits and coverage (SBC). In general, if there is a mid-year plan modification that affects the content of a previously provided SBC, notice of the modification must be provided at least 60 days in advance of the effective date of the change.
Perhaps the failure to address this obligation reflects a conclusion that elimination of all or a portion of contraceptive coverage would not affect the content of the SBC and, therefore, does not trigger the advance-notice requirement. (A review of the sample SBC on the DOL's website shows no reference to contraception or other preventive care.) But any employer considering a mid-year reduction or elimination of contraceptive coverage would want to review their SBC to ensure no advance notice is required.
Non-ERISA Plans. The FAQ's focus on obligations under ERISA likely stems from the fact that the Hobby Lobby case is limited to for-profit employers and, thus, should impact only plans that are covered by ERISA.
A copy of the FAQ is available here.
See prior discussion of the Hobby Lobby decision here.
