As of August 27, 2021, the Illinois Consumer Coverage Disclosure Act (ICCDA) requires employers offering “group health insurance coverage” to provide new notice to eligible employees. Under this law, a covered employer must prepare and provide its Illinois employees with a new notice that compares the benefits offered under the employer’s “group health insurance coverage” with the “benefits Essential Health Services (EHB) required in the Illinois insurance market (Get Illinois Covered). The law places the onus on employers, not insurers, to provide the notice of comparison of benefits.
Which employers are covered?
The new law applies to all employers (including state and local governments), regardless of size and location, if (i) they have employees in Illinois and (ii) provide “coverage group health insurance plan to Illinois employees. The Illinois Department of Labor (IDOL) recently released guidelines, including FAQs, stating that the law applies to Illinois employers who provide group health insurance coverage to employees of the Illinois in the form of fully insured plans and self-insured coverage.
Is Illinois law preempted by ERISA?
Not clear. Not clear. An argument can be made that the new law, at least as it relates to self-insured plans, is preempted by the Employment Retirement Income Security Act (ERISA) under recent US Supreme Court precedents. However, Illinois employers may choose to comply with the new law to avoid the penalties described below, rather than wait for the preemption issue to be finally resolved.
What information should employers provide?
Under the ICCDA, an employer who provides group health insurance coverage to Illinois employees must provide them with a list of benefits that are or are not covered by the employer’s group health insurance plan. in a format that easily compares them to “essential health insurance benefits”. (EHB) must be included in individual health insurance coverage regulated by the State of Illinois under its Get Covered Illinois insurance program. The notice must compare the coverage offered by the employer’s policy with the essential benefits required for policies sold in the Illinois insurance market. The top 10 EHBs include:
- Outpatient patient services (outpatient care you receive without being admitted to hospital)
- Emergency services
- Hospitalization (such as surgery and overnight stays)
- Laboratory services
- Mental health and substance use disorder (MH/SUD) services including behavioral health treatment (this includes counseling and psychotherapy)
- Pediatric services, including oral and vision care (but adult dental and vision coverage are not essential health benefits)
- Pregnancy, maternity and newborn care (before and after birth)
- Prescription drugs
- Prevention and wellness services and chronic disease management
- Rehabilitation and adaptation services and devices (services and devices to help injured, disabled, or chronically ill people acquire or recover mental and physical skills)
The recently released IDOL guidelines include an Illinois EHB chart that Illinois employers can use to provide the required comparison with benefits covered or not covered by their group health insurance coverage. Advice can be found at: https://www2.illinois.gov/idol/Laws-Rules/FLS/Pages/Consumer-Coverage-Disclosure-Act.aspx
When must notices be provided?
This comparison must be provided to Illinois-based employees (who are eligible for coverage) who are hired after August 27, 2021, at least annually thereafter, and upon request. Employers can comply by providing the comparison via email or by providing the information on a website that employees can easily access.
What are the penalties for non-compliance?
|Less than four employees||Four or more employees|
IDOL has the discretion to determine the exact amount of the penalty depending on the facts and circumstances.
What can employers do now?
Employers who provide fully insured medical benefits to Illinois employees could ask their brokers and insurers if they will help them prepare the required documents. Ultimately, however, employers are responsible for preparing and providing notices.