Chamber tip: summary plan description.

Author:Lamphier, Roy
Position:Health Care

A lot of concern has been raised about the U.S. Department of Labor's new regulations affecting all health plans covered under ERISA, which covers most employer-sponsored health plans. These regulations provide for new claim, determination and appeal guidelines that require employers to issue new Summary Plan Descriptions.

New Summary Plan Descriptions are needed to incorporate the updated appeals language. Without a compliant Summary Plan Description, employees who do not feel their insurance claim was settled properly may take their employer to court without exhausting the plan's administrative procedures. The new provisions provide an appeals process that must be followed before the claimant may take legal action.

Summary Plan Descriptions, sometimes referred to as SPDs, describe the provisions of an employer-sponsored plan such as health, life or disability and a written summary of the plan benefits. ERISA requires that employers distribute an SPD to all plan participants. Typically, employers have just provided the benefit booklet that was provided by their insurance carrier. However, these booklets alone do not meet the requirement of an ERISA-compliant SPD.

A Summary Plan Description should include the following administrative information:

* Plan name and plan number.

* Employer's name, address and phone number.

* Employer identification number.

* Plan year.

* Type of plan (such as, group health, welfare benefits).

* Manner of funding (i.e., self-funded or insured).

Summary Plan Descriptions also should include: ERISA rights information; HIPAA rights information; COBRA rights information; claims procedures; eligibility requirements; circumstances regarding loss or termination of benefits.

Other items commonly found in a SPD include: National Mental Health Parity Act disclosures; QMCSO (qualified status of a medical child support order) procedures; benefits information; cost-sharing provisions (co-pays, deductibles); annual or lifetime caps or limits on benefits; prescription drug coverage; and coverage for medical...

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