United States: New Illinois Disclosure Requirement for Health Plans
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Earlier this year, Illinois passed the Consumer Coverage Disclosure Act (CCDA), which places new health plan disclosure requirements on all employers. The disclosure is designed to compare the coverage of an employer’s group health plan to the essential health benefits required by the state for certain types of plans. Read the Essential Health Benefits and Disclosure Example.
While there is an argument that ERISA takes precedence over CCDA – and therefore the law does not apply to employers with self-insured group health plans – this issue has yet to be argued. The Illinois Department of Labor believes that the CCGD applies to all employers in Illinois, regardless of their plan’s insured / self-insured status. As such, we currently recommend that you work with your broker or third party administrator to complete and disseminate the disclosure.
Who is an employer?
Any individual, partnership, corporation, firm, trust, person, or entity that employs employees in Illinois, including state and local governments.
Who is an employee?
Anyone authorized to work by an employer.
When is disclosure required?
Disclosures must be provided to employees who are eligible for health insurance coverage: (i) upon hiring; (ii) annually thereafter; and (iii) on request.
How can disclosure be provided?
Disclosures can be emailed or listed on a website that an employee can access on a regular basis. Courier and hand delivery is also acceptable.
What are the penalties for non-compliance?
The Insurance Department will first give employers a warning and 30 days to comply with the law. After that, the ministry will impose a penalty. For employers with four or more employees, the penalties range from $ 1,000 to $ 5,000 per violation.
What if an employer’s plan does not provide all of the essential health benefits?
CCGD does not impose coverage requirements and there is no penalty if a group health plan does not provide these types of benefits. Instead, the CCGD requires that an Illinois employer provide its employees with a document comparing their group health plan benefits to essential state health benefits.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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