Illinois’ Consumer Coverage Disclosure Act: A 2026 Compliance Refresher for Employers

By: HUB’s EB Compliance Team

Employers sponsoring group health plans covering employees who work in Illinois face a recurring, employer-specific disclosure obligation under the Consumer Coverage Disclosure Act (“CCDA”). Codified at 820 ILCS 46, the CCDA is a state law that exists independently of federal health benefits mandates requiring covered employers to compare their plan’s benefits against a state-published list of essential health benefits (“EHBs”) and communicate the results to eligible employees. As employers wrap up 2026 renewal decisions or look forward to 2027, this is a reminder to confirm that the current template is in use and that all delivery requirements are met.

Regulatory Background

The CCDA took effect immediately upon signing on August 27, 2021. It requires any employer providing group health insurance coverage to employees in Illinois to disclose to those employees a written list of the EHBs regulated by the State of Illinois, along with a comparison showing which benefits are and are not covered under the employer’s own plan. The Illinois Department of Labor (“IDOL”) publishes and periodically updates the required model disclosure form.

Who Must Comply

The CCDA applies to any employer providing group health insurance coverage to employees regardless of whether a plan is fully insured or self-funded. Per the IDOL FAQs, plans that are self-insured and subject to Employee Retirement Income Security Act of 1974 (“ERISA”) are NOT preempted under ERISA, and are subject to the CCDA on the same terms as fully-insured coverage, namely because the CCDA imposes only a notification requirement and does not mandate or alter the substance of the coverage itself. Note though that this position has not been tested in litigation, so it can be considered as the IDOL’s enforcement posture rather than a settled interpretation. Employers with plan-specific questions regarding the applicability of the CCDA to their plans should consult with counsel.

The CCDA applies based on where employees work, not where they live. The IDOL applies a “base of operations” test where an employee working from an Illinois location, based out of an Illinois office while traveling, or otherwise centered in Illinois, is covered under the CCDA, even if the employee lives out of state or works a hybrid arrangement. The IDOL evaluates these situations on a case-by-case basis.

What is the Disclosure

The IDOL publishes and periodically updates a model disclosure form as well as an EHB listing referencing the state’s Access to Care and Treatment Benchmark Plan, plus the Illinois All Kids Dental Plan. Employers should confirm that they are working from the version currently posted on the IDOL website rather than a prior year’s form, since EHB categories and page references can change between versions. Use of the provided model disclosure form is not legally required; an employer’s own format is acceptable so long as it clearly communicates which EHBs are and are not covered.

What the CCDA Does Not Require

The CCDA is a disclosure statute, not a coverage mandate. IDOL FAQs state that the CCDA does not require a plan to cover any particular EHB and that an employer will not be penalized merely because its plan’s benefits differ from the state’s EHB list. Where a plan covers a benefit only partially relative to the benchmark — for example, a shorter post-acute therapy duration than the benchmark allows — the IDOL has advised marking the item as partially covered and describing the difference. Marking partial coverage as full coverage may be treated as providing misinformation.

When and How the Disclosure Must Be Provided

The CCDA disclosure is provided upon three independent trigger events, with each applying on an ongoing basis rather than as a single annual task:

1. Upon hire — to each newly eligible employee at the time of hire.
2. Annually thereafter — to all eligible employees each year, commonly aligned with open enrollment.
3. Upon request — to any eligible employee who asks for it, at any point during the year.

By statute, an employer satisfies delivery of the disclosure by emailing it directly to employees, or posting it on a website employees can regularly access. Neither a physical mailing nor an in-person handout is required, though either would also satisfy the CCDA. Bundling the annual disclosure with open enrollment materials is common, but new-hire and upon-request delivery requirements may still necessitate a separate, ongoing process.

Analysis: Practical Implications for Plan Sponsors

For most employers, the operational challenge is less about the legal standard and more about disclosure hygiene; meaning how to go about using the current-year form and distributing it through all three required trigger events. The IDOL can conduct inspections, and upon request an employer must demonstrate that each employee received the disclosure. Employers must also maintain distribution records for one year.

Civil penalties are tiered by employer size and escalate with repeat offenses. For employers with fewer than four employees, penalties may not exceed $500 (first offense), $1,000 (second), and $3,000 (third or subsequent). For employers with four or more employees, the caps are $1,000, $3,000, and $5,000, respectively. The IDOL considers employer size, good-faith compliance efforts, and the gravity of the violation in setting the actual penalty.

Conclusion

The CCDA remains a narrow but ongoing compliance obligation for any employer with an Illinois workforce presence, regardless of plan funding type. Plan sponsors should treat the CCDA disclosure as a recurring task tied to plan renewal and new hire onboarding, and consult counsel on workforce classification or ERISA-preemption questions specific to their plan.

If you have any questions, please contact your HUB advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual’s specific circumstances. It is based on Hub International’s understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.