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'Write It Down': How To Communicate Employee Benefit Plan Changes


With health care reform approved by the nation's highest court, it is time for employers to get back to work on reform-based compliance. While there will be countless efforts to repeal the law, the prudent employer will focus on the compliance tasks in front of them and not worry about long-term changes or political grandstanding from either side. To comply with health care reform, many employers will be faced with plan design changes. Employers must then ask, "how do I communicate this to my employees?"

Communicating changes to a benefit plan requires updating all documents where the employer originally wrote down the benefit plan details. The Plan Document must be updated with a Plan Amendment. The Summary Plan Description must be updated by issuing a Summary of Material Modifications, and the Summary of Benefits and Coverage must be updated by issuing a Notice of Material Modifications.

The key to getting this right is consistency between all of the documents. And a cautious employer will not craft new summaries or letters that conflict with the ERISA-required documents. If you want to send a cover letter to employees with the updated ERISA documents, make sure it is entirely consistent with the ERISA documents. Inconsistency can be the basis for an employee lawsuit.

This article appeared on August 1, 2012 on Crain's Cleveland Business Blog.


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