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Electronic distribution proves popular for Summary Plan Descriptions and Summary of Benefits and Coverage
Increasingly, employers are using electronic distribution as federal regulations require stepped-up health plan communications, according to the findings of the fourth annual Compliance Communications Survey from HighRoads, a provider of benefits management services.
Data for the 2012 survey were gathered from mid- to large-sized U.S. organizations representing approximately 5 million plan participants. Key findings indicate that interest in—and demand for—electronic distribution is continuing to grow.
SPDs and SBCs
While employers continue to use a variety of methods to distribute their required Summary Plan Descriptions (SPDs), electronic distribution is the most prevalent approach used with active employees: 80 percent of respondents use some form of electronic distribution, and posting SPDs to a portal is the most popular approach.
In addition, under a final rule of the Patient Protection and Affordable Care Act (PPACA), U.S. health insurers and group health plan providers must provide a Summary of Benefits and Coverage (SBC) to participants and beneficiaries who are eligible to enroll or re-enroll in group health coverage through an open enrollment period. The SBC must be distributed on the first day of an open enrollment period that begins on or after Sept. 23, 2012, or on the first day of the first plan year on or after Sept. 23, 2012, for special enrollees and those newly eligible for coverage.
To meet the aggressive timeframe for SBC distribution, 64 percent of employers will use a combined approach of online and hardcopy distribution, while 20 percent will distribute SBCs online exclusively and only 16 percent will distribute only hardcopy SBCs, the survey revealed.
Another survey finding is employees’ growing demand for mobile—and social media—access to their health plan information. The survey found the following:
• More than half of all employers said employees have asked about receiving benefit information on their mobile devices.• About a third of the employers are investigating the possibility of distribution by smart phone.
• More than half of all employers said employees have asked about receiving benefit information on their mobile devices.
• About a third of the employers are investigating the possibility of distribution by smart phone.
“Clearly, this is a time when employers are looking at compliance as a critical communications issue and making aggressive moves to embrace online delivery in order to respond to both regulatory requirements and employee needs,” Kim Buckey, a principal in HighRoads' communication compliance practice, said in a media statement.
Other key findings include:
• Some 87 percent of employers plan on updating SPDs within the next year to make them more user-friendly, with some 73 percent viewing SPDs as both a compliance and communication vehicle. “Most employers continue to view SPDs as a valuable means to enhance employees’ understanding and appreciation of their benefit plans,” Buckley noted.• Few employers—only 16 percent—rely solely on internal resourcesto update and maintain SPDs. Three out of four employers work jointly with outside resources in the SPD process, while 9 percent rely completely on their vendors.
• Some 87 percent of employers plan on updating SPDs within the next year to make them more user-friendly, with some 73 percent viewing SPDs as both a compliance and communication vehicle. “Most employers continue to view SPDs as a valuable means to enhance employees’ understanding and appreciation of their benefit plans,” Buckley noted.
• Few employers—only 16 percent—rely solely on internal resourcesto update and maintain SPDs. Three out of four employers work jointly with outside resources in the SPD process, while 9 percent rely completely on their vendors.
Similarly, most employers have outsourced the SBC process. Slightly more than half (53 percent) are relying on their medical carrier or, if self-insured, their third-party administrator (TPA) to produce their SBCs. Of the remaining employers, 25 percent are using a consulting firm to create the SBCs, 18 percent are creating SBCs in-house and 5 percent are not sure who is producing their SBCs.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
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