In 2021, Illinois Governor Pritzker signed into law the “Consumer Coverage Disclosure Act,” which became effective August 27, 2021. The new law creates disclosure requirements for certain Illinois employers that provide group health insurance coverage to any employee(s) in Illinois. Specifically, under the new law, such employers must provide all Illinois employees with a list of essential health insurance benefits (referred to as “EHBs” in the health plan community) that are regulated by the State of Illinois (i.e., the Get Covered Illinois exchange program). The law applies to employers whose group health insurance plan is not regulated by or issued in the State of Illinois.
Importantly, this disclosure must include a comparison of the EHBs provided by the Get Covered Illinois program against those benefits covered by the employer’s plan.
A few highlights of what you may need to know include:
- This reporting requirement is imposed on employers – not insurers, TPAs, or group health plans. However, employers can and should rely on their respective insurance company, broker, and/or TPA to help complete the comparison. Many brokers are providing compliance guidance with supporting notices.
- The law applies to certain employers, regardless of size, if they employ workers in Illinois.
- The law does not require employers’ plans to provide all of the EHBs offered under the Get Covered Illinois program, just to show the information in a format that facilitates an easy comparison.
- The State of Illinois has provided a template for use in complying with the required notice. Employers aren’t required to use the template, but it also is not enough to simply provide a general benefits booklet or summary plan description which lists/describes the plan’s benefits or EHBs offered.
- There is no express exception for self-insured coverage (which is subject to ERISA). In fact, the State of Illinois FAQ suggests that preemption is not available as this is an employer requirement (i.e., it is not a plan requirement and applies regardless of the type of plan offered); prior Supreme Court precedent calls into question whether the State’s logic will prevail.
- Employers must provide this information to all employees upon hire, annually, and upon request.
- The notice can be sent via email (no ERISA/IRS electronic disclosure rules are at issue as this is a state law requirement, assuming there are no preemption issues) or posted on the employer’s website.
e Illinois Department of Labor has responsibility for enforcement. A 30-day period to come into compliance may be afforded; thereafter, noncompliance of employers with at least 4 employees can result in fines of up to $1,000 for a first offense, $3,000 for a second offense, and $5,000 per offense thereafter.
Considering the costs and resources needed to comply, covered employers with Illinois employees should assess whether the new requirements apply to them. If it does apply, employers should develop a plan for compliance in conjunction with their HR teams, insurance providers, brokers, administrators, and counsel.
If you have questions about how this development might impact your organization, please contact Christopher J. Carlos or Caroline K. Vickrey.
