Employers Feel Weight of ACA-Required Communications

Confronting the growing burden of health care compliance documents

By Stephen Miller, CEBS January 24, 2014

U.S. employers continue to grapple with employee-communication obligations related to health care, including new requirements under the Affordable Care Act (ACA). And while compliance staffs appear to be getting larger, organizations continue to have a vague picture of the total costs of writing, producing and distributing compliance documents, according to data from benefits management firm HighRoads’ Fifth Annual Compliance Trends Survey.

Conducted near the end of 2013 with midsize to large companies representing 5 million plan participants, the survey revealed that:

  • Sixty nine percent of respondents have adedicated governance and/or compliance staff, while 31 percent do not.
  • More employers are producing ACA-required materials in-house than in previous years. Forty percent of respondents generate required Summary of Benefits and Coverage (SBC) documents themselves (up from 18 percent the prior year), and 68 percent plan to create in-house the Notice of Coverage Options through public health care exchanges in 2014.
  • About a quarter of respondents update Summary Plan Descriptions (SPDs) and distribute them to their active employees every year, but employers far prefer to provide Summaries of Material Modification (SMMs) or put notices in annual enrollment material to alert participants about plan changes.
  • The biggest challenges facing employers when it comes to producing SPDs are having sufficient resources and managing the review process. Twice as many respondents as a year ago indicated that “writing” was a challenge.

“We are seeing the continued struggle of employers to comply with ACA requirements," said Kim Buckey, principal for compliance communication services at HighRoads. "It is a challenge that will only increase as new regulations under the ACA take effect, current safe harbors and postponed effective dates expire, and enforcement of the regulations begin in earnest."

For example, she noted that the two-year "best efforts" safe harbor for complying with SBC regulations around format and length is now ending.

Having sufficient resources (budget, time and people) and managing the review process continue to be the biggest hurdles as companies produce their SPDs. For the first time, a quarter of respondents (27 percent) reported that their internal SPD team consists of six or more people, while 55 percent get the job done with two to five team members. In 18 percent of companies, SPDs are handled by one person.

The second year for SBCs was 2013, during which employers also dealt with a new template and required information. Despite the change, twice as many self-insured respondents opted to produce these documents in-house (40 percent, up from 18 percent the prior year), and far fewer planned to have their insurance carriers handle SBC production (36 percent, down from 53 percent).

Who is producing SBCs for your self-insured plans?

Creating in-house


Medical carrier or third-party administrator


Consulting firm


Not sure


Source: HighRoads

The 2013 SBC required businesses to determine whether their plan meets minimum-value standards, and federal agencies gave employers multiple options for doing so. While many respondents relied on their actuaries to make this determination, some used their carrier, and a handful used the calculator provided on the Department of Labor (DOL) website.

How are you determining whether your plan meet the minimum-value requirement?





Calculator on DOL website


Source: HighRoads

For the first time, in 2013 employers were required to provide a notice of coverage options. Given the relatively simple nature of the form, more than two-thirds of respondents (68 percent) produced it in-house, 24 percent opted to reach out to consultants, and just 12 percent used their carriers to generate the notice.

Distribution Options

Compliance document distribution continues to migrate toward electronic channels, with 33 percent of respondents reporting they used e-mail to alert participants that SPDs and other materials had been posted online, typically at a secure site. Organizations are also broadening online access—specifically, 63 percent allow access from anywhere (not just from work), while 30 percent limit access to active employees.

Who has access to electronically distributed SPDs?

All participants from any location


Employees only, from any location (home, library, other remote site)


Employees only, at work (retirees and other nonactive participants can't access online)




Don’t provide electronic access


Source: HighRoads

Social Media

Almost half of respondents (45 percent) indicated they are using or plan to use Twitter and/or Facebook, along with e-mail, to direct participants to online notifications about their benefits.

Most organizations, however, still don’t know what percentage of their employees are using smartphones and other mobile devices for work, although 27 percent said they intend to explore their use as a benefits-communication tool within the next two years.

Private Exchanges Considered

“The continued challenge of compliance may be a contributing factor to the decision of some employers to move their employees and/or retirees to a private exchange,” Buckey said. “Almost 88 percent of our respondents indicated that they have considered moving to an exchange within the next five years."

Have you considered moving any of your participants to a private exchange …



within the next year?



within the next five years?



Source: HighRoads

Stephen Miller, CEBS, is an online editor/manager for SHRM.​​

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