Under New Illinois Law, Illinois Employers With Insured Group Health Plans Must Provide New Benefit Comparison Notice To Covered Illinois Employees
Since Aug. 27, 2021, the Illinois Consumer Coverage Disclosure Act (ICCDA) requires that employers offering “group health insurance coverage” must provide a new notice to eligible employees. Under this law, a covered employer must prepare and provide its Illinois employees with a new notice that compares the benefits offered under the employer’s “group health insurance coverage” with the “essential health benefits” (EHBs) required through the Illinois insurance marketplace (Get Covered Illinois). The law puts the onus on employers, not insurers, to provide the benefit comparison notice.
Which employers are covered?
The new law applies to all employers (including state and local governments), regardless of size and where they are located, if (i) they have employees in Illinois and (ii) provide “group health insurance coverage” to Illinois employees. The Illinois Department of Labor (IDOL) recently issued guidance, including FAQs, stating that the law applies to Illinois employers that provide group health insurance coverage to Illinois employees in the form of fully insured plans and self-insured coverage
Is the Illinois Law Preempted by ERISA?
Not clear. Not clear. An argument can be made that the new law, at least as to self-insured plans, is preempted by the Employment Retirement Income Security Act (ERISA) under recent U.S. Supreme Court precedents. However, employers in Illinois may choose to comply with the new law in order to avoid the penalties discussed below, rather than waiting until the preemption issue is definitively decided.
What information must employers provide?
Under the ICCDA, an employer who offers group health insurance coverage to Illinois employees must provide them with a list of benefits that are covered or not covered under the employer’s group health insurance plan in a format that easily compares them with the “essential health insurance benefits” (EHBs) required to be included in individual health insurance coverage regulated by the State of Illinois under its Get Covered Illinois insurance program. The notice must compare the coverage offered under the employer’s policy with the essential benefits required for policies sold on the Illinois insurance marketplace. The top 10 EHBs include:
- Ambulatory patient services (outpatient care you get without being admitted to a hospital)
- Emergency services
- Hospitalization (like surgery and overnight stays)
- Laboratory services
- Mental health and substance use disorder (MH/SUD) services, including behavioral health treatment (this includes counseling and psychotherapy)
- Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential health benefits)
- Pregnancy, maternity, and newborn care (both before and after birth)
- Prescription drugs
- Preventive and wellness services and chronic disease management
- Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
The recently issued IDOL guidance includes a chart of Illinois EHBs that Illinois employers can use to provide the required comparison with benefits covered or not covered in their group health insurance coverage. The guidance can be found at: https://www2.illinois.gov/idol/Laws-Rules/FLS/Pages/Consumer-Coverage-Disclosure-Act.aspx
When must the notices be provided?
This comparison must be provided to Illinois-based employees (who are eligible for coverage) who are hired after Aug. 27, 2021, at least annually thereafter, and upon request. Employers can comply by providing the comparison by email or providing the information on a website that employees can easily access.
What are the penalties for non-compliance?
|Fewer than four employees
|Four or more employees
The IDOL has the discretion to determine the exact amount of the penalty based upon the facts and circumstances.
What can employers do now?
Employers that provide fully insured medical benefits to Illinois employees could ask their brokers and insurers if they will assist with the preparation of the required. Ultimately, however, employers are responsible for preparing and providing the notices.
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