MRA offers help with federal mandates

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Burdensome federal requirements regarding employee benefit plans have led MRA to forge a partnership with Foster, Swift, Collins and Smith, P.C. to offer members an easy, low-cost way to comply with the mandate.

By following a link from the insurance programs page in MRA's member services area, http://www.retailers.com/memberservices/insuranceprog.html, and clicking on Summary Plan Description, members are able to obtain a customized document, to be distributed to their employees in compliance with federal mandates.

Background: SPDs
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most pension and health plans in private industry to provide protection for individuals in these plans.

Employers who sponsor ERISA benefit plans, such as plans for health, disability and group term life insurance, are required to provide plan participants (enrolled employees and beneficiaries) a Summary Plan Description (SPD) for each benefit plan maintained by the employer. MRA members who participate in the Association’s health, dental, life and disability insurance programs fall under this requirement.

An SPD provides general information about the benefit offered under the plan, including who is eligible for the benefit, how to file a claim, what are the employees’ rights under federal law and other disclosures required by law.

The employer is required to distribute the SPD to employees within 120 days after the plan’s effective date. In addition, the employer must give plan participants an updated SPD every 10 years, or every five years if the plan has been significantly changed. New participants must be given an SPD within 90 days after their participation date.

Because of recent changes in federal laws that affect ERISA benefit plans, new SPDs may be required for many benefit plans.

What’s new
A federal law known as HIPAA (Health Insurance Portability and Accountability Act of 1996) is an amendment of ERISA. HIPAA establishes privacy rules regarding protected health information. These rules become effective for most employers April 14, 2004. For health plans with annual premiums (if insured) and/or annual claims (if self-insured) exceeding $5 million, the new rule became effective April 14, 2003.

In addition, the U.S. Department of Labor has implemented new claims procedures for health benefits and other welfare benefits that must be disclosed to participants. The claims procedures for health plans became generally effective January 1, 2003. The claims procedures for disability plans became generally effective for claims filed after December 31, 2001.

An employer who fails to comply with the SPD disclosure requirements, the new claims procedures and the HIPAA privacy rules may have to pay penalties. Therefore, each employer should review all of its benefit plans for compliance with federal SPD disclosure requirements.

How to comply
Many benefit booklets or certificates of coverage do not contain all the disclosures required by DOL. A supplement called a wraparound SPD will satisfy the DOL requirements. Employers may contact the Michigan Retailers Association website at www.retailers.com for a wraparound SPD for health, disability and group term life insurance benefit plans.

A $50 fee will apply for this service, payable by bankcard on the website through a secure server. If a member were to contact a private attorney to develop the required SPD, the costs would be well over $1,000.

At the website, a member will fill in basic information about the business and the benefit plan or plans needing a wraparound SPD. After completing the process, the member will receive an email with the document(s) attached as Microsoft Word files. Minor changes can be made before the document is printed and distributed.

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