Benefits notifications are essential for keeping employees informed about their rights, coverage options, and key changes to their plans. Plus, they’re required. Staying compliant with federal and state regulations is crucial not only to fostering trust and transparency with employees, but also to avoid penalties.
The start of a new year is a great time to review your benefits notification processes and make sure they’re up to snuff going forward.
Here’s what you need to know.
Why Benefits Notifications Matter
Proper communication helps employees make informed decisions about their benefits while demonstrating your organization’s commitment to their well-being. Furthermore, maintaining compliance with notification requirements protects your company from potential legal and financial risks.
What Benefits Notifications are Required
Employers must provide specific notifications depending on the benefits they offer. Below are some of the most common requirements:
Summary Plan Description (SPD)
Employers must provide an SPD to employees within 90 days of the employee becoming covered under a plan. This document outlines the key details of the benefits plan, including eligibility, coverage, and claims procedures.
Updates or material changes to the plan must be communicated within 210 days after the plan year’s end. If the change is significant, this has to be done within 60 days.
COBRA Notices
If your organization offers group health insurance, COBRA requires you to notify employees of their rights to continuation coverage in the event of qualifying circumstances (e.g., job loss or reduced work hours).
COBRA election notices must be sent within 14 days of the qualifying event.
Annual Open Enrollment Notices
During open enrollment, employers must distribute information about benefits options for the upcoming year, including plan details, premium changes, and enrollment deadlines.
ACA Requirements
The Affordable Care Act mandates employers provide a Summary of Benefits and Coverage (SBC) to help employees compare plans.
Additionally, employers must report health coverage details on Form 1095-C for eligible employees.
Medicare Part D Notices
Employers offering prescription drug coverage must notify employees annually whether their coverage is creditable compared to Medicare Part D standards.
This notice should be distributed by October 15 each year.
State-Specific Notifications
Many states have their own notification requirements, such as disability insurance information or paid family leave notices. Check your state’s labor laws to ensure compliance.
Tips to Help You Manage Required Benefits Notifications
We know – it’s a lot to keep track of. But following these tips should help.
Create a Notification Calendar
Develop a timeline that tracks all required notifications and deadlines to avoid last-minute scrambling.
Leverage Technology
Use benefits administration software to automate notifications and track employee acknowledgments.
Stay Updated on Regulations
Regularly review changes in federal and state laws to ensure your notifications meet current requirements.
Communicate Clearly
Use plain language and concise explanations to ensure employees easily understand their benefits and responsibilities.
Document Everything
Keep records of all notifications sent and employee acknowledgments to demonstrate compliance if audited.
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Staying compliant with benefits notification requirements is a year-round responsibility. It requires planning, organization, and attention to detail.
However, you can simplify the process by staying proactive and using the right tools while enhancing the employee experience. As we move into 2025, now is the perfect time to review your notification practices and ensure your team is ready for the year ahead.
