Jun
03
2014

For ACA, Don’t Stop At Your Benefits Plans: Remember To Check Your Handbook

Employers have been diligently working on revisions to their benefits plans and summary plan descriptions to comply with the requirements of the Affordable Care Act.  After those revisions are in place, it is critical to remember an additional step:  Make sure that applicable employee handbook language is also revised to reflect these changes.

Generally, it is best to keep any discussions of benefits to a minimum in employee handbooks, so as to avoid confusion and the potential for conflict with plan documents and summary plan descriptions.  However, employers usually desire to include some benefits-related information in their handbooks, if only to point employees in the right direction for obtaining additional information.

Thus, if your handbook contains benefits-related information, you should consider reviewing that information and make any necessary revisions so that the information is both consistent with the Affordable Care Act and consistent with your plans and other communications.

For example, if you chose to exclude “part-time” employees (i.e. those who work less than 30 hours a week) from your health plan, make sure that exclusion is stated in your handbook. If you are using lookback measurement periods allowed by the regulations, you should also make mention of them in the handbook.  The level of detail you include will depend on your preference, but as with other benefit plan discussions, it is probably best not to get into too deep of a discussion of how the measurement periods work in a handbook. .

Additionally, if your definition of “part-time” is different for health benefits than it is for other purposes (hours, compensation, vacation, etc), that distinction should be made clear in the handbook.  In that case, it may be a good idea to use a term other than “part-time” when referring to health benefits to avoid possible confusion.

You should also mention if a waiting period applies and what it is.

Additionally, any handbook discussion of benefits should include language that:

  • Emphasizes that the handbook only briefly summarizes benefits and that the details can be found in the SPDs or plan documents.  Additionally, the handbook should state that the plan documents  control over any inconsistency between them and the handbook.
  • Reiterates that eligibility for participation in any plan is governed by the terms of the plan document in question.
  • Identifies the location or source where copies of SPDs can be obtained.
  • States that the benefits described in the handbook may be modified or discontinued from time to time at the company’s sole discretion.

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