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7 Key Employee Benefits Challenges Employers Must Plan for as 2021 Approaches

Each new calendar year brings significant changes in the form of laws and regulations affecting employee benefits and general HR compliance. And this year, with the ongoing COVID-pandemic, employers are facing more unprecedented challenges that ever before. In this post, we’ll cover some of the main employee benefits issues that you’ll need to be aware of as we head into 2021.

Specifically, we’ll cover:

  • Furloughs
  • COVID Testing
  • Uncertainty of Healthcare Under New Presidential Administration
  • Deferred Renewals
  • Employees Going Remote and/or Relocating
  • Second COVID Wave and Corresponding Government Response
  • Cares Act COVID Benefit

1. Furloughs

In the early days of the COVID-19 pandemic, many state governments passed legislation to relax the eligibility requirements for furloughed employees to retain their benefits. Many of these regulatory actions were temporary and will expire as of January 1st, 2021.

Business owners should review the legislation that was passed in their states to determine if this circumstance will apply to them and any of their employees who remain furloughed. It’s also key to remain vigilant for any new legislation that may pass in the coming month around the topic of furloughs.

2. COVID Testing

The Families First Coronavirus Response Act (FFCRA), which was signed into law by President Trump on March 18, 2020 to respond to the pandemic, ensures that, “COVID-19 testing is free to anyone in the U.S., including the uninsured.” However, this provision will expire on December 31, 2020. This means that COVID testing will no longer be free, unless the Federal Government passes further legislation to extend free testing.

Consult directly with your healthcare provider to determine what their plans are for covering COVID testing as of January 1st, if any.

3. Uncertainty of Healthcare Under New Presidential Administration

Healthcare is always a topic of heated debate, especially during election years like 2020. This has caused many employers to ask themselves: what will healthcare look like under the Biden/Harris administration?

Biden plans to build off the ACA’s framework and expand a public health option similar to Medicare. This public option would directly compete with private insurance providers and would be available to anyone, regardless of whether their employer offers qualified-health plans. Additionally, regarding Medicare, Biden has proposed lowering the eligibility age to 60 from 65.

If Biden is successful in either of these healthcare initiatives, it would certainly flip healthcare as we currently know it upside down. Employers must remain tuned-into ongoing legislative conversations as the Biden administration begins their transition into the White House.

4. Deferred Renewals

Many benefits carriers handed out rate passes or premium holidays in light of the pandemic, regardless of loss ratios. Will these actions ultimately lead to significant renewals in 2021 for their clients? If your carrier granted you a rate pass or premium holiday, be sure you take that into consideration as you prepare to make decisions about renewing coverage with that provider.

5. Employees Going Remote and/or Relocating

Perhaps the most significant long-term impact of the COVID-19 pandemic is that many employees will become permanent work-from-home employees. This will give many people more flexibility with their living arrangements, and some will likely choose to relocate now that they can work from anywhere. This will undoubtably be a trend in 2021.

Employers should reevaluate benefit offerings to allow for these remote employees to have proper coverage wherever they may be. As a business leader, it’s crucial you work hand-in-hand with your benefits broker during this time to ensure you are addressing the healthcare needs of a newly remote workforce.

6. Second COVID Wave and Corresponding Government Response

Recent news about the positive preliminary results of potential coronavirus vaccines has provided a light at the end of the tunnel. However, cases are still surging in most states around the country. It is clear that we are in a second, more powerful wave of infections. However, the Federal Government has yet to pass any significant legislation to follow up the FFCRA or CARES ACT that were passed in March. With the election behind us, keep a close eye on the government to see what relief bills may be passed in the coming weeks and months.

Additionally, employers should be on the watch for any “stay-at-home” restrictions that are put in place, by either the federal government or by local state or city governments.

Whatever legislation ends up passing, if any, pay special attention to what it implies for “non-essential” businesses that need to have employees in-person. If extreme “stay-at-home” restrictions are put back in place, how will employees meet hourly requirements to maintain benefits?

If you haven’t already, you should be developing contingency plans to deal with varying levels of government restriction so that you know how to address these potential issues with your employees.

7. CARES Act COVID Benefit

As briefly mentioned in the previous section, the Federal Government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March. Under the CARES Act, the government helps reimburse employees who are out of work due to COVID so the employer is not paying out of their employer Short Term Disability policy.

The question remains, will the CARES Act benefit continue throughout 2021 or will employers bear the financial brunt? Many employers are hopeful the federal government will take steps over the next few weeks to clarify what the future of the CARES Act will be.

Key Takeaways

From an HR and employee benefits perspective, we’ll enter the year 2021 with much uncertainty about how the COVID-19 pandemic will continue to affect the workplace. However, there are a few areas that employers will want to keep an eye on in the coming weeks and months so that they’ll have a better idea of what they’ll face in 2021:

  • Furloughs – Will regulatory actions that help furloughed employees retain their benefits continue into 2021?
  • COVID Testing – Will testing for COVID-19 still be free after December 31st, 2020?
  • Uncertainty of Healthcare Under New Presidential Administration – What will happen to the healthcare industry and Medicare under the incoming Biden Administration?
  • Deferred Renewals – Will benefits carriers see significant renewals increases in 2021 due to benefits holidays or rate passes that were handed out in 2020?
  • Employees Going Remote and/or Relocating – How must employers adjust their benefits plans to address the needs of a remote workforce?
  • Second COVID Wave and Corresponding Government Response – How significant will this second wave of COVID infections become, and what will be the response of federal, state, and local governments?
  • Cares Act COVID Benefit – Will the Federal Government extend the CARES ACT (or pass any follow-up legislation)?

Research Shows Your Employees Are Making Bad Benefits Decisions: Here’s How You Can Help

Has choosing a healthcare plan become too complicated? According to research conducted by Medical Xpress, when given the option between two employer-sponsored healthcare plans, nearly 25% of employees chose the option that was less financially beneficial to them – despite the fact that both plans offered the same non-cost benefits.

Medical Xpress wanted to determine just how difficult it was for employees to make the most beneficial decision when presented with just two options. Both options were the exact same in every way except for cost, with one of the two healthcare plans having higher premiums and lower out-of-pocket expenses (i.e. deductibles, co-payments). According to the research, the plan with lower premiums and higher out-of-pocket expenses was more financially beneficial to 97% of the 2,300 employees in the study.

Despite this fact, 23% of the employees chose the plan with higher premiums – a mistake that would cost them more than $2,000 a year on average.

Why It Matters

For nearly 180 million Americans, employer-sponsored healthcare is a necessity to help with the expenses of medical care. In 2020, the average insured worker is spending over $5,500 in premiums and more than 8% of their total spending goes to healthcare expenses.

Typically, employees are given an option of at least two healthcare plans. The decision of which healthcare plan will be most beneficial to the employee is determined by two factors: 1.) The expected amount of care they will need for the upcoming year, and 2.) The amount of risk they are willing to take on. In most cases, if an employee expects they will need less care, it makes sense for them to choose the option with a lower monthly premium and higher out-of-pocket costs. Nonetheless, evidence shows that when employees have too many options, they routinely make poor health insurance decisions.

That said, based on the study conducted by Medical Xpress, while choice overload might play a role in poor decision making, it is not the primary reason employees are having such a difficult time making the best benefits decisions.

Healthcare practitioners and policymakers have been trying to help employees make better benefits decisions for quite some time now, yet with little progress. For example, using algorithms to provide individuals with a “smart default” plan that fits their needs best. Despite these efforts, the issue still exists. The truth is, helping employees make better benefits decisions is a difficult challenge.

While it will not eliminate all health benefit decision-making errors, simplifying the choices would help. Additionally, providing more search and analysis tools to employees would also make it easier for employees to make a better informed decision.

What You Can Do to Help Your Employees

There are many ways you can help your employees make better benefits decisions. Here are a few of the things you can do for your employees to help reduce this issue within your organization:

Plan Design – To encourage your employees to become responsible healthcare consumers and take control over their healthcare costs, you should work with your benefits broker to develop effective plan designs that give employees more control and more choice in their benefits selection.

Employee Engagement – Employees need to be aware of their role as consumers and engage with their healthcare decisions. Your employee engagement efforts should centered around crafting a healthcare approach that addresses employee concerns and needs. Once you have created a healthcare environment that is conducive to employee engagement, you should work directly with your employees to get them to take control of their healthcare decisions.

Employee Education – You should provide your employees with the resources they need to truly understand their options and best provide for their health while reducing healthcare expenses for themselves and you as an employer. In addition to utilizing external resources to give your employees access to education, you should maintain consistent communication with your employees about their healthcare options, the tools available to them, and any changes to their benefits. The right employee benefits broker will take a hands-on approach to employee benefits education, working directly with your team to help them select the best plan for their needs.

Empowering Employees – Once you have given your employees the insurance options that maximize their role as consumers and the engagement and education that makes them informed consumers, it’s time to provide them with the tools they need to become empowered consumers. There are more options than ever to manage healthcare and reduce expenses such as telehealth, pharmacy savings cards, and various benefits enrollment platforms. If you need help in deciding which of these tools are best for your business, your broker can advise on how to harness the power of modern benefits technology.

Millennial Health Trends Impacting Your Employer Healthcare Costs

Millennials make up a significant portion of today’s workforce. Understanding millennial personalities, lifestyles, and well-being is key for many employers to successfully continue the operations of their organizations, especially in the wake of the COVID-19 pandemic.

A recent report published by the Blue Cross Blue Shield Association highlights several concerning health trends among millennials that employers will want to be acutely aware of. The issues associated with these trends could be exacerbated by the COVID-19 pandemic, which adds to the importance of understanding and preparing for the bumpy road of millennial health that lies ahead.

In this post, we’ll provide an overview of two of these key trends:

  1. Rates of behavior health conditions among millennials are increasing.
  2. Millennials with behavioral health conditions are more likely to have a chronic physical condition.

We’ll also briefly talk about what actions employers can take to address these trends in their workforce.

Rates of Behavior Health Conditions Among Millennials Are Increasing

Unfortunately, behavioral health conditions have been rising among millennials. The list below highlights some of the most pertinent conditions and their corresponding increases over the past five years:

  • ADHD – 39% increase
  • Tobacco Use Disorder – 10 % increase
  • Major Depression – 43% increase
  • Substance Use Disorder – 17% increase
  • Alcohol Use Disorder – 5% increase
  • Psychotic Disorders – 26% increase

This data was gathered before the COVID-19 pandemic. As you can imagine, rates of many of these behavioral health conditions are likely to increase even more due to this pandemic. In the report, 92% of millennials said that COVID-19 has had a negative impact on their mental health overall.

Also noted within the research are more statistics that show the frightening effects the pandemic has already had on millennials, “Because of the pandemic, almost 60% of millennials have canceled a health-related appointment or procedure. In addition, isolation, stress and economic insecurity attributed to the pandemic have had a major impact on millennials. Almost 10% have lost their job due to the pandemic, 25% have seen a reduction in their work hours, and 23% have had to access savings to pay for their day to day needs.”

Millennials With Behavioral Health Conditions Are More Likely to Have a Chronic Physical Condition

An extension of the issue described in the previous section is that millennials with behavioral health conditions are more likely to have a chronic physical condition. Specifically, millennials with behavioral health conditions are:

  • 1.9 times more likely to experience hypertension
  • 1.7 times more likely to develop high cholesterol
  • 1.9 times more likely to have Crohn’s Disease/Ulcerative Colitis
  • 2.1 times more likely to have Type II Diabetes
  • 2.7 times more likely to have Coronary Artery Disease

Given that nearly one-third of millennials have behavioral health conditions (and rising), employers should anticipate an increased need to address the above physical conditions in the future.

Millennials seem to be aware of these trends as well. When surveyed, 54% of millennials perceive their mental health as good or excellent, compared to 64% of baby boomers. Further, 80% of millennials believe their mental health has an impact on their physical health, compared to 62% of baby boomers. This shows that many millennials are aware of the mental health issues facing their generation as well as the potential physical health issues that follow.

What Can Employers Do?

Many employers will feel discouraged after reading this post. Millennials will face behavioral and physical health challenges in the future, and employers like you want to do your best to help them.

One of the best strategies that is recommended by Launchways is to work with a trusted and experienced benefits broker. Consider the following ways a benefits broker can help you address the trends discussed in this article:

  • Guide you as you negotiate with your health service providers to make sure adequate mental and behavioral health services are available for your employees.
  • Perform an audit of the demographics of your workforce to determine more specifically how it will be affected by these millennial health trends.
  • Implement strategies to incentivize employees to not skip their routine preventative medical services.

Key Takeaways

The topic of this article is very concerning, especially for employers with workforces that are Millennial-dominant.

Key takeaways from this article include:

  • Rates of behavioral health conditions have been rising over the last five years.
  • Individuals with behavioral health conditions are much more likely to experience chronic physical conditions.
  • The COVID-19 pandemic has already had negative effects on the health of Millennials, and unfortunately there will almost certainly be more negative effects moving forward.  

Employers should consider working with a trusted benefits broker, like Launchways, to implement strategies to care for the mental and physical health of their Millennial employees.

How COVID-19 is Impacting Employee Benefits for Growing Businesses

COVID-19 is Changing Priorities

Since the outbreak of COVID-19, the benefits landscape has seen changes on a fundamental level. Both employers and employees have recognized the need for plans that cover the health and well-being of individuals and their families in new ways. Because of this, employee benefits are playing a larger role in retaining employees and attracting new talent for employers.

While unemployment rates across the nation have spiked, retaining and attracting new talent continues to be a challenge for several growing businesses. In a study conducted by The National Federation of Independent Business (NFIB), sourcing qualified talent is ranked as one of the biggest issues facing scaling businesses – second only to the cost of health insurance.

As these growing businesses prepare for the uncertain times ahead, identifying new ways to connect with their employees and creating benefits plans that align with their priorities will be a key factor in their success.

Meeting the Needs of Employees

Because of COVID-19, employees are starting to see the importance of benefits that may have ranked lower on their priority list in a pre-COVID era. For example, employees now look at benefits such as income protection resources as a necessity.

In a study conducted by LIMRA, research showed that roughly 25% of employers claimed that life insurance and short-term disability have become more important than ever before. In addition, roughly 40% of employers claimed that critical illness and hospital indemnity coverage is far more important now than in a pre-COVID era.

The employee benefits that, in the past, might have placed a potential employer higher on a job seeker’s list may be different than they once were. For businesses that offer their employees no benefits at all, sourcing and retaining quality talent is becoming a much bigger challenge. As stated above, the NFIB study shows that many growing businesses are struggling because of this. While they might need to expand their workforce, they feel their company is too small or the cost of health insurance is too high for them to offer potential employees the coverage they are seeking from an employer.

At the same time, certain supplemental benefit offerings are now and continue to become more relevant. For example, mental health benefits are increasing in demand as stress, anxiety, and depression are on the rise due to the effects of social isolation. Employees are now seeking benefits from their employers that look out for both their mental and physical well-being. In a study conducted by the National Alliance of Health Purchaser Coalitions, research showed that, because of COVID-19, 53% of employers are now offering their employees special emotional and mental health programs. In addition, 32% of employers have added to their mental health and well-being offerings for their employees.

Personal finances are, in most cases, the leading cause of added stress felt by employees. This is prompting more interest in financial wellness benefits from employers. As a result, there has been a focus from employers on helping their team navigate the challenges created by finances both individually and for their families, providing them with resources to help them understand and better manage their finances.

The Role of Financial Stress in Benefits

Financial uncertainty is having a large impact on the bottom line for growing businesses, forcing them to make tough calls that will ultimately change the landscape of employee benefits. Benefits such as health insurance are fundamental to the offerings of an employer. In fact, research shows more than a 25% increase in benefits offered since March. However, for businesses that have been impacted by COVID-19 more significantly, this could likely mean higher premiums for employees or adjustments to other benefit offerings.

For example, it’s possible that we will see a shift to more voluntary benefits. However, this doesn’t come without warning. In a study conducted by LIMRA, research shows that the interest in 100% employee-paid products is only 35% for life insurance and 39% for critical illness coverage. Additionally, many reported that they weren’t sure they would even enroll.

Putting together a first-rate benefits package for employees is nothing short of a balancing act. Many things have to be considered such as the needs of employees, which benefits to offer, and the budget you have to work with. That said, the businesses that are investing in getting it right are not just helping their employees, they are setting themselves up to be an employer of choice in the future.

Looking to the Future

Overhauling the entirety of your benefits offerings is a daunting task. Growing businesses should focus on listening to the needs of their people, and let communication be the guiding principle in developing a benefits package that works for them. The conversation doesn’t have to include the details of specific benefits but should allow for a dialog to better understand the concerns that employees have. This kind of communication will help to uncover the core needs employees have, and how they might have changed amidst COVID-19. As employee priorities shift, so should the decisions of the employer concerning benefits. If you are able to listen to your team and create a plan that works for them, you will be able to retain the people you have and attract the talent you need to be successful.

Everything You Need to Know About Employee Benefits Compliance

As a business leader you work hard to take care of your employees. When it comes to employee health benefits, it’s important that you stay on top of ever-changing compliance requirements. Failing to do so can be detrimental to your business. Whether you are a growing startup, an established small business, or a scaling medium-sized corporation, in order to stay compliant, you need a systematic approach.

While these regulations are essential for assuring the fair treatment of employees, they can also be dense and intimidating if you have no prior experience navigating them. That’s why we’ve created this resource guide, to offer you a comprehensive look at employee benefits and the compliance requirements that come with them. With this resource, you can feel confident that you are taking care of your employee’s healthcare needs and while fulfilling your business’ legal obligations.

Employee Retirement Income Security Act (ERISA)

The Employee Retirement Income Security Act (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

ERISA – General Guidelines

ERISA imposes a variety of compliance obligations on the sponsors and administrators of group health plans. For example, it establishes strict fiduciary duty standards for individuals that operate and manage employee benefit plans and requires that plans create and follow claims and appeals procedures. ERISA applies to employee welfare benefit plans, including group health plans, unless specifically exempted such as Church and government plans. There are no exceptions for small employers.

ERISA requires plan administrators to provide the following notices/disclosures:

  • SPD – Plan administrator must automatically provide an SPD to participants within 90 days of becoming covered by the plan. An updated SPD must be provided at least every five years if changes have been made to the information contained in the SPD. Otherwise, an updated SPD must be provided at least every 10 years.
  • Summary of Material Modifications (SMM) – Plan administrator must provide an SMM automatically to participants within 210 days after the end of the plan year in which the change was adopted. If benefits or services are materially reduced, participants generally must be provided with the SMM within 60 days from adoption.
  • Plan Documents – The plan administrator must provide copies of plan documents no later than 30 days after a written request.

ERISA – Form 5500 Requirements

Form 5500 is used to ensure that employee benefit plans are operated and managed according to ERISA’s requirements. The filing requirements vary according to the type of ERISA plan. Unless an extension applies, Form 5500 must be filed by the last day of the seventh month following the end of the plan year (that is, July 31 of the following year for calendar year plans.

The Form 5500 requirement applies to plan administrators of ERISA plans unless an exception applies. Small health plans (those with fewer than 100 participants) that are fully-insured, unfunded, or a combination of fully-insured and unfunded, are exempt from the Form 5500 filing requirement.

Affordable Care Act (ACA)

The Affordable Care Act (ACA) is a federal law that provides numerous rights and protections that make health coverage fairer and easier to understand, along with subsidies to make it more affordable.

ACA – General Guidelines

The ACA makes many changes to health coverage requirements, such as extending coverage for young adults up to age 26, prohibiting rescissions of health coverage (except in cases of fraud or intentional misrepresentation), eliminating pre-existing condition exclusions, prohibiting lifetime and annual dollar limits on essential health benefits, and requiring coverage for preventive care without cost-sharing. These health coverage reforms have staggered effective dates, with many key provisions taking effect for plan years beginning on or after Jan. 1, 2014.

The ACA applies to health plans and health insurance issuers, with narrow exceptions for certain types of plans (for example, retiree medical plans) and there are no exceptions for small employers.

ACA requires plan administrators to provide the following notices/disclosures:

  • Statement of Grandfathered Status – Plan administrator or issuer was required to provide the first statement before the first plan year beginning on or after Sept. 23, 2010. The statement must continue to be provided on a periodic basis with participant materials describing plan benefits. This requirement only applies to grandfathered plans.
  • Notice of Rescission – Plan administrator or issuer must provide a notice of rescission to affected participants at least 30 days before the rescission occurs.
  • Notice of Patient Protections and Selection of Providers – Plan administrator or issuer must provide a notice of patient protections/selection of providers whenever the summary plan description (SPD) or similar description of benefits is provided to a participant. These provisions relate to the choice of a health care professional and benefits for emergency services. The first notice should have been provided no later than the first day of the plan year beginning on or after Sept. 23, 2010. This requirement does not apply to grandfathered plans.
  • Uniform Summary of Benefits and Coverage – Plan administrator or issuer must provide the uniform summary of benefits and coverage (SBC) to participants and beneficiaries at certain times, including upon application for coverage and at renewal. Plan administrators and issuers must also provide a 60-day advance notice of material changes to the summary that take place mid-plan year. Plans and issuers were required to begin providing the SBC to participants and beneficiaries who enroll or re-enroll in plan coverage during an open enrollment period beginning with the first open enrollment period that started on or after Sept. 23, 2012. For participants and beneficiaries who enroll in plan coverage other than through an open enrollment period, the SBC requirement became effective for the first plan year that started on or after Sept. 23, 2012.

ACA – Employer Penalties and Related Reporting

Applicable large employers (those with at least 50 full-time employees, including equivalents) that do not offer health coverage will be subject to a penalty if any of their full-time employees receives a subsidy toward a health plan offered through an Exchange. The monthly penalty will be equal to the number of full-time employees (minus 30), multiplied by 1/12 of $2,000 for any applicable month. Applicable large employers that do offer coverage may be subject to penalties if the coverage is not “affordable” or does not provide “minimum value” and at least one full-time employee obtains a subsidy under an Exchange. The monthly penalty for each full-time employee who receives an Exchange credit will be 1/12 of $3,000 for any applicable month. However, the total penalty for an employer would be limited to the total number of full-time employees (minus 30), multiplied by 1/12 of $2,000 for any applicable month. A special transition rule applies to the penalty calculation for 2015 that allows employers with 100 or more full-time employees (including equivalents) to subtract 80 employees (rather than 30) from their full-time employee count.

The ACA imposes penalties on employers with at least 50 full-time (and full-time equivalent) employees if they do not offer health coverage to their employees or if they offer health coverage to their employees that is not “affordable” or does not provide “minimum value” and certain other requirements are met. Employers that are subject to the employer penalty rules are called “applicable large employers” (or ALEs).

General Notices

HIPAA Privacy and Security

The HIPAA Privacy Rule governs the use and disclosure of an individual’s Protected Health Information (PHI). The HIPAA Security Rule creates standards with respect to the protection of electronic PHI.

The HIPAA Privacy and Security Rules require the following notices/disclosures:

  • Notice of Privacy Practices – Plans and issuers must provide a Notice of Privacy Practices when a participant enrolls, upon request and within 60 days of a material revision. At least once every three years, participants must be notified about the notice’s availability.
  • Notice of Breach of Unsecured PHI – Covered entities and their business associates must provide notification following a breach of unsecured PHI without unreasonable delay and in no case later than 60 days following.


States may offer eligible low-income children and their families a premium assistance subsidy to help pay for employer-sponsored coverage. If an employer’s group health plan covers residents in a state that provides a premium subsidy, the employer must send an annual notice about the available assistance to all employees residing in the state.

CHIPRA requires the following notices/disclosures:

  • Annual Employer CHIP Notice – A model notice is available from the DOL

Medicare Part D

Employer-sponsored health plans offering prescription drug coverage to individuals who are eligible for coverage under Medicare Part D must comply with requirements on disclosure of creditable coverage and coordination of benefits

Medicare Part D requires the following notices/disclosures:

  • Disclosure Notices for Creditable or Non-Creditable Coverage – A disclosure notice must be provided to Medicare Part D eligible individuals who are covered by, or apply for, prescription drug coverage under the employer’s health plan. The purpose of the notice is to disclose the status (creditable or non-creditable) of the group health plan’s prescription drug coverage. It must be provided at certain times, including before the Medicare Part D Annual Coordinated Election Period (October 15 through December 7 of each year).
  • Disclosure to CMS – On an annual basis (within 60 days after the beginning of the plan year) and upon any change that affects the plan’s creditable coverage status, employers must disclose to the Centers for Medicare and Medicaid Services (CMS) whether the plan’s coverage is creditable.

Michelle’s Law

Michelle’s law ensures that dependent students who take a medically necessary leave of absence do not lose health insurance coverage. (Note: The health care reform law expanded coverage requirements for dependents by requiring plans to provide coverage up to age 26, regardless of student status.)

Plan administrators and issuers must include a Notice of Michelle’s Law with any notice regarding a requirement for certification of student status.


Under the Newborns’ and Mothers’ Health Protection Act (NMHPA), group health plans may not restrict mothers’ and newborns’ benefits for hospital stays to less than 48 hours following a vaginal delivery and 96 hours following a delivery by cesarean section.

The plan’s SPD must include a statement describing the NMHPA’s protections for mothers and newborns.


The Women’s Health and Cancer Rights Act (WHCRA) requires health plans that provide medical and surgical benefits for a mastectomy to also cover: (1) all stages of reconstruction of the breast on which a mastectomy has been performed; (2) surgery and reconstruction of the other breast to produce a symmetrical appearance; and (3) prostheses and physical complications of mastectomy, including lymphedemas.

Plans must provide a notice describing rights under WHCRA upon enrollment and on an annual basis after enrollment.

Your Benefits Compliance Checklist:

  • ERISA – General Guidelines
  • ERISA – Form 5500 Requirements
  • ACA – General Guidelines
  • ACA – Employer Penalties and Related Reporting
  • HIPAA Privacy and Security
  • Medicare Part D
  • Michelle’s Law
  • Newborns’ and Mothers’ Health Protection Act (NMHPA)
  • Women’s Health and Cancer Rights Act (WHCRA)


There’s a lot to know when it comes to employee benefits compliance. At Launchways, we understand and are here to help as your benefits experts. We have the expertise to ensure that your benefits compliance needs are taken care of, so you can have the peace of mind your business is always in compliance.  No matter the size of your business, if you offer your employees any form of health insurance benefits, you must feel confident that you are compliant in your offerings. Talk to a Launchways team member today about our benefits administration solution.

Interested in more information on benefits compliance?

Get The Complete Benefits Compliance Overview!

This guide includes:

  • How to determine your plan year
  • Full calendar-style checklist of every compliance deadline your business must meet
  • In-depth details on how to fulfill each compliance requirement


Medicare Part D Notices – An Overview for Employers

Employers and their group health plan sponsors will want to mark October 15, 2020 on their calendars. This is the deadline for plan sponsors to disclose to individuals who are eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether the health plan’s prescription drug coverage is creditable.

Although this responsibility primarily falls on group health plan sponsors, there are several important things that employers should be aware of that we’ll cover in this post:

  • What is Medicare Part D?
  • Where can resources and model notices can be found?
  • Other timing and delivery rules to be aware of

What Exactly Does “Creditable Coverage” Mean, and How Is It Related to Medicare Part D?

“Creditable Coverage” is a term that involves two simple words, but most people have a hard time understanding what exactly it means in the world of Medicare.

A notice of creditable coverage is simply an official document given to an employee from their employer (or union) that states whether their prescription drug coverage plan is equal to or better than the prescription drug coverage provided through Medicare.

This notice helps the employee make decisions related to their benefits, as remaining under their employer’s prescription drug plan might be very advantageous for them as they approach retirement. For plans that are not creditable, employees should generally move to Medicare as this will save them money from future late-enrollment penalties in the future. Medicare allows employees who choose to stay on plans that are creditable to avoid these penalties should they choose to enroll later on.

In order for CMS to have an official record of an employer’s or union’s status as creditable or non-creditable, employers must disclose that status both to their Medicare Part D eligible employees as well as the CMS. Employers should work with their group health plan sponsors to send this notice, and it must be done by October 15th.

What Resources and Model Disclosures Exist?

Fortunately, the CMS has provided two model notices that employers can use:

  1. A model notice of creditable coverage when the health plan’s prescription drug coverage IS creditable. (click here to access this model).
  2. A model notice of non-creditable coverage when the health plan’s prescription drug coverage IS NOT creditable (click here to access this model).

Technically, employers do not have to use these model notices. However, if the models are not used, the notices still must include certain information. These requirements include a disclosure about whether the plan’s coverage is creditable, explanations of what creditable coverage means, and an explanation of why employees should take their coverage decisions seriously.

Employers and their group health care sponsor should strongly consider using these models. It’s the simplest way to make the disclosures and ensure that the required language is used. Another best practice is for employers and their group health plan sponsors to provide this notice to all plan participants, even to those that might not be qualified for Medicare Part D. This way, the employer can ensure that they “cover all their bases” and that they educate employees who will have to make this decision several years in the future.

What Other Rules Should You Be Aware of?

Employers should not that the most important time of year to deliver Part D Notices is prior to the Medicare Part D annual election period, which goes from October 15th to December 7th each year. However, there are other situations in which an employer or their group health plan sponsor must give this notice to an employee:

  • Whenever a beneficiary requests the notice
  • Whenever there is a change in an employer’s health plan that changes whether the plan is creditable or non-creditable
  • Before the effective date of coverage for any Medicare-eligible individual who joins the plan

As we stated in the previous section, it’s not a bad idea to provide Part D notices at multiple times throughout the employment life cycle. Part D notices can even be included in new enrollment materials for employees.

It is important for employers to understand the rules about printed notices and electronic notices. A single printed notice may be delivered to an address, even if multiple beneficiaries of the plan live at that address. However, if it is known that a beneficiary of the plan lives at a separate address, a second printed notice must be sent to that address. Electronic notices can be compliant as well, assuming the employee has regular access to the electronic documents at their regular place of work.

From an official perspective, the Department of Labor (DOL) has three requirements for electronic delivery of Part D Notices:

  1. The plan administrator uses appropriate and reasonable means to ensure that the system for furnishing documents results in actual receipt of transmitted information.
  2. Notice is provided to each recipient, at the time the electronic document is furnished, of the significance of the document.
  3. A paper version of the document is available on request.

As we stated very early in this post, a notice must also be sent to the CMS in addition to the beneficiaries of the plan. This disclosure to the CMS must be delivered on an annual basis, and the following timeline requirements apply – the notice must be provided:

  1. Within 60 days after the beginning date of the plan year for which the entity is providing the form.
  2. Within 30 days after the termination of the prescription drug plan.
  3. Within 30 days after any change in the creditable coverage status of the prescription drug plan.

Key Takeaways

Part D Notices, or notices of “Creditable Coverage,” are simply an official document given to an employee from their employer (or union) that states whether their prescription drug coverage plan is equal to or better than the prescription drug coverage provided through Medicare. The purposes of these notices is to help beneficiaries of the plan make the best decision for their prescription health coverage moving forward.

Here are additional key takeaways related to these notices:

  • The Centers for Medicare and Medicaid Services (CMS) provide sample notices that employers should consider using.
  • Employers should work with their group health plan sponsors to ensure that these notices are delivered at the right time – which might end up being more frequently than you think.
  • The notices can be provided electronically under certain circumstances.