“Digital Open Enrollment and Covering Transgender Services”
With open enrollment season coming up, many employers are trying to reduce the amount of paper notices they distribute. There are health plan notices that are required under federal law, so employers need to be sure their distribution methods are compliant. So today I’ll be answering some FAQs about Distributing Open Enrollment Materials Electronically!
The U.S. Department of Labor (DOL) provides guidelines for electronic distribution of health plan notices. Generally, notices must be distributed in a manner that reasonably ensures the employee receives the material. It is not enough to post materials online or offer other media without actually delivering them to the employee.
What are the guidelines for electronic distribution?
The DOL guidelines distinguish between employees with work-related computer access and other employees.
First, notices may be distributed electronically to employees who regularly access the electronic media, such as the company’s email system, as part of their regular job duties. For instance, notices can be sent by email, with return-receipt request, as long as the email explains the significance of the material. As an employer, you should confirm that materials are being received on a regular basis.
Next, electronic distribution also can be used for people who do not meet the “regular work-related computer access” standard but only if the individual provides consent. The rules for obtaining consent can be burdensome so many employers prefer not to use electronic distribution for such employees. Instead, employers distribute paper copies either by first class mail to employees’ homes or just by giving it to them work.
In addition to employees whose jobs do not involve regular computer access, there also will be COBRA beneficiaries and employees away from work on leave for whom electronic distribution may not be feasible.
2. If the guidelines are met, what types of health plan notices can be distributed electronically?
The DOL guidelines for electronic distribution apply to many required health plan notices and disclosures These include:
-- Summary Plan Description (SPD)
-- Summary of Material Modification (SMM)
-- Notice of Marketplace Coverage Options (Exchange Notice)
-- HIPAA Special Enrollment Notice
-- Benefit summaries, such as evidence of coverage (EOC) booklets and certificates
At open enrollment, the HIPAA notice and benefit summaries explaining the employee’s choices are distributed. Other items, such as SPDs, SMMs, and the Exchange Notice, also may be included although they are not required during each year’s enrollment season.
3. Can the HIPAA Notice of Privacy Practices (often called the Privacy Notice) be distributed electronically?
The Privacy Notice does not have to be distributed during open enrollment. Instead the required timeframes are:
-- At the time of the employee’s initial enrollment (such as at hire);
-- Upon the individual’s request;
-- Within 60 days of a material change in the content of the Notice; and
-- At least once every three years the plan must distribute a reminder that the notice is available (or distribute the full notice again).
Although not required, some employers choose to include the Privacy Notice with open enrollment materials. It can be distributed electronically but the conditions are a little more restrictive than for other types of benefit notices. So, individuals must affirmatively consent to receive the notice electronically, including consenting to any hardware or software requirements, and acknowledging that consent may be withdrawn at any time.
In any case, if the plan maintains a website describing services and benefits, the full Privacy Notice must be posted there in addition to distribution to individuals.
4. What about the Summary of Benefits and Coverage (SBC)? Can it be distributed electronically?
Yes, Summary of Benefits and Coverage can be distributed electronically if you’re using the appropriate methods. The usual DOL guideline for electronic distribution is a little less strict for SBCs. For instance, if enrollment is conducted exclusively online, the SBC can be provided electronically.
Otherwise, for employees who are currently enrolled and who use a computer as part of their regular job duties, the SBC can be sent to that computer (or you can post it and send a notice explaining how to access it and how to request a paper copy at no charge). For employees who are not currently enrolled, the SBC can just be posted online as long as persons are notified of its availability. Many plans send a brief email to meet the notice requirement.
In summary, distributing benefit plan notices at open enrollment using electronic media offers many conveniences to both the employer and employee. Eliminating unnecessary paper copies helps save you money (and protects the environment). At the same time, employers need to ensure their distribution methods comply with federal rules.
So the next topic I’ll be covering today is whether or not your company is required to cover transgender services? We received this question:
Q: Our company’s group health plan is self-funded (uninsured). Are we required to cover transgender services? We heard that a federal law might require coverage but the rule was repealed. Is that correct?
A: At this time, federal law does not specifically require self-funded group health plans to provide transgender benefits. However, there are nondiscrimination laws that employers must consider in designing and administering their programs.
FIRST, we know that Section 1557 of the Affordable Care Act (ACA) prohibits discrimination. This DOES include gender identity discrimination in health activities and health programs. This rule actually only applies to entities that receive some form of federal funding, such as health care providers, insurers, and certain administrators, so your company may be exempt. On the other hand, if you use a third party administrator (TPA) that also is a health insurer, Section 1557 may apply to your plan.
Section 1557 rules that prohibits discrimination based on gender identity. The court’s action applies nationwide so, at this time, Section 1557 does not require health plans to cover gender transition services.
SECOND, Title VII of the Civil Rights Act prohibits employers from discriminating in providing health coverage and other items. Title VII is regulated and enforced by the Equal Employment Opportunity Commission (EEOC), and it is not affected by the court’s injunction regarding the ACA’s Section 1557. For purposes of Title VII, discrimination includes discrimination against transgender persons.
I have a direct quote from the EEOC website for reference, here is the statement:
“EEOC interprets and enforces Title VII's prohibition of sex discrimination as forbidding any employment discrimination based on gender identity or sexual orientation.”
So, as an employer, you may want to work with legal counsel to consider possible exposure under Title VII if their group health plan excludes transgender or gender identity services.
We answered these questions with more detail over on our Facebook page, so check that out if you want to know more.
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