Chamber tip: summary plan description.A lot of concern has been raised about the U.S. Department of Labor's new regulations affecting all health plans covered under ERISA See Employee Retirement Income Security Act. ERISA See Employee Retirement Income Security Act (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 employer-sponsored plan, n a program supported totally or in part by an employer or group of employers to provide dental benefits for employees. The plan may be administered directly by the employer or another person or group under a contractual such as health, life or disability and a written summary of the plan benefits. ERISA requires that employers distribute an SPD (Serial Presence Detect) The method used by DIMM memory modules to communicate their capacity and features to the computer. Data such as manufacturer, size, speed, voltage and row and column addresses are stored in an EEPROM chip on the module. to all plan participants Plan participants Employees or other beneficiaries who are eligible to receive benefits from a company's employee benefit plan. . Typically, employers have just provided the benefit booklet benefit booklet, n a booklet or pamphlet provided to the subscriber that contains a general explanation of the benefits and related provisions of the dental benefits program. Also known as a summary plan description. 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 Applicable to the United States, an Employer Identification Number or EIN (also known as Federal Employer Identification Number or (FEIN)) is the corporate equivalent to a Social Security Number, although it is issued to anyone, including individuals, who has to pay . * 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 (Health Insurance Portability & Accountability Act of 1996, Public Law 104-191) Also known as the "Kennedy-Kassebaum Act," this U.S. law protects employees' health insurance coverage when they change or lose their jobs (Title I) and provides standards for patient health, 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 The Mental Health Parity Act (MHPA) is legislation signed into United States law on September 26, 1996 that requires that annual or lifetime dollar limits on mental health benefits be no lower than any such dollar limits for medical and surgical benefits offered by a group health disclosures; QMCSO QMCSO Qualified Medical Child Support Order (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 prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, coverage; and coverage for medical tests, devices and procedures. Employers must distribute their new Summary Plan Descriptions on or before the first day of the plan year but not later than Jan. 1, 2003. For new plans, the employer has 120 days to distribute their new SPD. For all plans, the employer must redistribute the SPD every 10 years or every five years if a significant change occurs. Each employer providing health insurance for their employees should seriously review their current Summary Plan Description with their legal counsel. Though it may seem like a needless hassle, a small amount of effort now can save you much time and money in the future. A cost-effective program A recent poll by the Detroit Regional Chamber found that majority of employers with under 25 employees do not even have a Summary Plan Description. Most cited cost and lack of knowledge as reasons. The Chamber offers a cost-effective SPD program to employers all sizes. Chamber members may customize and purchase their own SPD for only $25. For more information, visit the insurance section of the Chamber's Website at www.detroitchamber.com or call (866) MBR-LINE. Your Biz: The Detroit Region's Small Business Toolkit. Many tips in this issue are from "Your Biz, The Detroit Region's Small BusinessToolkit." For information on how to subscribe to this useful weekly e-newsletter, visit our Website at www.detroitchamber.com. Roy Lamphier Senior Director, Insurance Services Detroit Regional Chamber |
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