[July 27, 2016] |
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DirectPath Encourages the Department of Labor to Modernize Summary Plan Descriptions
DirectPath,
the industry leader in employee health care engagement and compliance,
today announced that it has responded to the Department of Labor's (DOL)
request for comments regarding the Summary Plan Description (SPD)
Requirements under the Employee Retirement Income Security Act (ERISA).
In its comment
letter, DirectPath strongly urges the DOL to facilitate electronic
distribution of plan documents, suggesting that people who prefer paper
forms opt into receiving them that way. DirectPath also advocates for
the DOL to mandate improvements around the readability of SPDs to help
deepen consumers' understanding of their health care coverage.
Encouraging Electronic Distribution The SPD distribution
guidelines were developed 15 years ago and do not align with the current
widespread use of the internet by consumers. According to a report from
the Pew (News - Alert) Research Center, more than 89 percent of American adults today
are internet users, up from only 60 percent when the SPD regulations
were initially released in 2002. Currently, electronic distribution of
SPDs is only permitted where employees use computers as an integral part
of their job duties, or have affirmatively opted in to receive plan
documents electronically. Reversing this strategy and requiring
employees to actively elect to receive printed plan documents
will provide environmental benefits, reduce print and postage costs and
increase information accessibility for consumers. It would also be
consistent with other federal regulations regarding electronic
distribution.
Making Readability Enhancements The Affordabe Care Acts
Summary of Benefits and Coverage (SBC) is a good model to follow for the
SPDs. The purpose of the SBC is to provide clear, concise information
for consumers to compare medical plans as they make decisions about
their plan choice. Even with the advent of the SBC, the SPD remains the
primary source of information for workers who participate in an
employment-based plan. The statutory authority underlying the SPD
directs employers to provide an SPD that is written to be understood by
the average plan participant, is accurate and comprehensive and
reasonably apprises participants and beneficiaries of their rights and
obligations under the plan. Unfortunately, this guideline is often
ignored by employers looking to "check the box" on compliance. A study
by the Employee Benefit Research Institute (EBRI) found that important
information contained in many SPDs is written at a reading level that
may be too high for the average plan participant.
Fully rewriting each SPD to meet current readability standards is often
impractical, but there are simple edits employers can make to facilitate
easy understanding, from small word changes ("before" instead of "prior
to," "if" instead of "in the event of," "when" instead of "at the time,"
etc.), writing in the first person and eliminating extra words, the use
of more white space, call-out boxes and headings to provide visual
interest. Instituting and enforcing a minimum readability standard will
help ensure that plan participants adequately understand their coverage.
"Summary Plan Descriptions are critical tools for helping employees
understand the parameters of their benefits. Unfortunately, given their
current format and distribution form, many plan participants are not
reading or comprehending the content," said Kim Buckey, vice president
of client services for DirectPath. "This is a missed opportunity. That
is why DirectPath has taken steps to make its point of view and
suggestions known to the Department of Labor. We strongly hope the
Department makes adjustments to the regulation with the best interest of
employees everywhere in mind."
To access the comment letter, please follow this
link.
For more information on DirectPath, visit www.directpathhealth.com.
About DirectPath DirectPath is an industry leader in
strategic employee engagement and health care compliance for Fortune
1000 employers. Its customers experience significant ROI on their
benefits investments through increased employee participation,
management of the evolving regulatory environment and reduced cost
through efficient benefits plan management technology. DirectPath is
headquartered in Birmingham with offices in Boston and Ottawa, Canada.
For more information, visit the DirectPath website
and follow the company on Twitter.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160727005228/en/
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