By: HUB’s EB Compliance Team
In late August, Illinois Governor, J.B. Pritzker, signed the Consumer Coverage Disclosure Act (“CCDA”). This new law became effective immediately. As described in this Hub newsletter to clients, the law requires employers to disclose to group health plan participants, an easy-to-understand comparison of the group health plan’s coverage to the Essential Health Benefits required by the Illinois Department of Insurance.
This week, the Illinois Department of Labor (which is responsible for enforcing the law) issued guidance that clears up several open issues.
Who is required to disclose the comparison to group health plan participants?
Employers are to prepare a comparison chart of the health benefit coverage provided by each of group health insurance policy, to the list of the IL Essential Health Benefits. The links in this paragraph are to an Excel spreadsheet the IL DOL published that, if properly completed, employers can use as a form to satisfy this requirement. However, employers are not required to use this chart. They can provide the information in any form as long as it provides employees clear information about which Essential Health Benefits are covered under the employer’s plan and which are not.
Does this requirement apply to ERISA self-funded plans?
Because the CCDA creates a benefits notification requirement for all Illinois employers, regardless of the type of insurance they provide, employers who provide self-insured plans and/or ERISA plans are subject to the provisions of the Act, per the IL DOL.
When should the disclosure be provided to employees?
To be in compliance, employers must provide this information to employees upon hire, annually, and upon request.
Will a business be penalized if its group health insurance coverage benefits are not the same as those included in the Essential Health Benefits list?
No, the CCDA does not impose coverage requirements on employers. It only requires certain disclosures to employees about the employer’s coverages. The benefits required to be covered under the group health plan may depend on whether your plan is self-funded or fully insured, and whether the employer is a small employer or a large employer.
However, the IL DOL may impose civil penalties for failing to make the disclosure, as follows:
- For an employer with fewer than 4 employees: a penalty not to exceed $500 for a first offense; a penalty not to exceed $1,000 for a second offense; and a penalty not to exceed $3,000 for a third or subsequent offense.
- For an employer with 4 or more employees: a penalty not to exceed $1,000 for a first offense; a penalty not to exceed $3,000 for a second offense; and a penalty not to exceed $5,000 for a third or subsequent offense.
The IL DOL says the appropriateness of the penalty to the size of the employer, the good faith efforts made by the employer to comply, and the gravity of the violation will be considered in determining the amount of the civil penalty.
The amount of the penalty, when finally determined, may be recovered in a civil action brought by the IL Director of Labor in any circuit court. Any administrative determination by the Department as to the amount of each penalty shall be final unless an employer appeals for a judicial review.
Takeaway
Employers with employees in Illinois should review the model disclosure (linked above) and work on providing it to employees as required by the CCDA.
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.