DOL Issues Proposed Summary Plan Description Regulations

In September, the DOL issued proposed regulations regarding Summary Plan Descriptions ("SPDs"). As you are probably aware, ERISA requires that plan administrators distribute SPDs to all participants covered under both qualified plans and health and welfare plans. ERISA and the DOL's regulations promulgated thereunder contain certain minimum requirements for SPDs. The proposed regulations make several changes to those requirements, most of which are applicable solely with respect to health and welfare plans.

The proposed regulations require group health plans to include, among other things, the following items in an SPD: (a) any cost sharing provisions, including premiums, deductibles, coinsurance, and copayment amounts for which a participant or beneficiary will be responsible; (b) any annual or lifetime caps or other limits on benefits under the plan; (c) the extent to which preventive services are covered under the plan; (d) whether and under what circumstances coverage is provided for medical tests, devices and procedures; (e) provisions governing the use of network providers; (f) the composition of the provider network; (g) whether and under what circumstances coverage is provided for out of network services, and (h) a statement of a plan's procedures for addressing qualified medical child support orders ("QMCSOs") or a statement that the participant or beneficiary may request and obtain a copy of QMCSO procedures from the plan at no cost.

With respect to qualified plans, the proposed regulations require that SPDs contain, among other items: (a) language indicating a plan's procedures for addressing qualified domestic relations orders ("QDROs") or state that the participant or beneficiary may request and obtain a copy of QDRO procedures from the plan at no cost; (b) language related to the plan sponsor's authority to terminate the plan, consequences and circumstances of plan terminations, and the allocation and disposition of assets upon plan termination; and (c) language related to ERISA Section 404(c) which deals with fiduciary responsibility for plans in which participants direct their own investments. In addition, the proposed regulations contain new language with respect to benefits insured by the Pension Benefit Guaranty Corporation.

Also in September, the DOL issued an interim final rule with respect to the SPD language required by the Newborns' and Mothers' Health Protection Act of 1996 ("NMHPA"). NMHPA prohibits group health plans and health insurance issuers from limiting hospital stays for mothers and newborn children to less than 48 hours in case of vaginal delivery and 96 hours in the case of cesarean delivery. The interim final rule makes clear that the 48/96 hour minimum stay provision does not apply in any case in which the decision to discharge the mother or newborn prior to the minimum stay is made by the attending provider in consultation with the mother. This interim rule is effective with respect to the first summary of material modification or updated SPD required to be issued to participants on or after November 9, 1998. If you have any questions, or would like additional information on the proposed regulations or on the interim final rule regarding the NMHPA, please contact a member of the Employee Benefits and Executive Compensation Group.