In case you missed it, Governor Pritzker signed the “Consumer Coverage Disclosure Act” into law earlier this year, which became effective August 27, 2021. This new law creates disclosure requirements for Illinois employers that provide group health insurance coverage to any employee(s) in Illinois. Specifically, under the new law, such employers must provide all Illinois employees with a list of essential health insurance benefits (referred to as “EHBs” in the health plan community) that are regulated by the State of Illinois (i.e., the Get Covered Illinois exchange program). Additionally, this disclosure must include a comparison of the EHBs provided by the Get Covered Illinois program against those benefits covered by the employer’s plan.
A few highlights of what you may need to know include:
- This reporting requirement is imposed on employers – not insurers, TPAs, or group health plans. That said, coordination with your insurance company, broker, and/or TPA may be the next step to complete the comparison.
- While penalties are larger for employers with at least 4 employees, there is no minimum employer size for compliance. The law applies to all employers, regardless of size, if they employ individuals in Illinois.
- The law does not require employers' plans to provide all of the EHBs offered under the Get Covered Illinois program, just to show the information in a format that facilitates an easy comparison.
- The State of Illinois has provided a template for use in complying with the required notice. While use of the template is not mandated, it is not sufficient to provide a general benefits booklet or SPD which lists/describes the plan’s benefits or EHBs offered.
- The law applies to employers whose group health insurance plan is not regulated by or issued in the State of Illinois.
- There is no express exception for self-insured coverage (which is subject to ERISA). In fact, the State of Illinois FAQ suggests that preemption is not available as this is an employer requirement (i.e., it is not a plan requirement and applies regardless of the type of plan offered); prior Supreme Court precedent calls into question whether the State’s logic will prevail.
- Employers must provide this information to all employees upon hire, annually, and upon request.
- The notice can be sent via email (no ERISA/IRS electronic disclosure rules are at issue as this is a state law requirement, assuming there are no preemption issues) or posted on the employer’s website.
- The Illinois Department of Labor has responsibility for enforcement. A 30-day period to come into compliance may be afforded; thereafter, noncompliance of employers with at least 4 employees can result in fines of up to $1,000 for a first offense, $3,000 for a second offense, and $5,000 per offense thereafter.
Considering the costs and resources needed to comply, employers with Illinois employees should assess whether the new requirements apply to them from a mechanical and legal perspective. If it does apply, employers should develop a plan for compliance in conjunction with their HR teams, insurance providers, brokers, administrators, and counsel.