Q: Are plan sponsors required to provide members advanced notice when making midyear changes to the plans?

A: Yes!

Under the Affordable Care Act (ACA), there are two notification requirements that apply to changes made midyear. These notifications are in addition to any similar requirements under the Employee Retirement Income Security Act (ERISA) that may be applicable.

First, the ACA requires employers to give 60 days advanced notice of any plan changes, including employer contribution changes, before implementing them. (This does not apply if the change is made at open enrollment.) This notice is called the ACA’s 60 Day Advanced Notice of Material Modification. It only applies when changes are made to a plan in the middle of a plan year, and it applies to all health plans (not just ERISA plans).

Second, the ACA requires that plan sponsors provide plan participants with an updated summary of benefits and coverage (SBC) prior to enrollment and upon request.

The updated SBC can be used to provide the 60-day advanced notice if it sufficiently describes plan changes, and if it is provided 60 days prior to the midyear change. If changes are not addressed on the SBC, the requirement can be met by issuing a separate written notice describing the changes, including (but not limited to) a plan amendment. When a plan is also subject to ERISA, the ACA regulations provide that the plan must satisfy ERISA’s requirement to provide a Summary of Material Modification (SMM).

If you have any questions on the ACA’s Advanced Notice Requirements, please contact MedBen’s Compliance Department.