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DOL Issues Final Revised Summary Plan Description Regulations

By Bruce H. Schwartz
  • April 5, 2001

The U.S. Department of Labor (DOL) recently issued amendments to its regulation governing the content of summary plan descriptions (SPD) required for employee benefit plans subject to the Employee Retirement Income Security Act (ERISA).

The amendments update the disclosure rules applicable to pension and welfare plans and are generally effective January 20, 2001, but SPDs are not required to reflect these new requirements until the first day of the second plan year after January 20, 2001. The amendments to the rules governing the content of SPDs are intended to update the content requirements and incorporate recommendations of the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry.

Group Health Plans

The final rules provide that the following information must be included in group health plan SPDs:

  • any cost sharing provisions, including premiums, deductibles, coinsurance and co-payment amounts;
  • any annual or lifetime caps or other limits on benefits under the plan;
  • the extent to which preventive services are covered by the plan;
  • whether, and under what circumstances, existing and new drugs are covered under the plan;
  • whether, and under what circumstances, coverage is provided for medical tests, devices or procedures;
  • provisions governing the use of network providers, the composition of the provider network, and whether, and under what circumstances, coverage is provided for out-of-network services;
  • any conditions or limits applicable to obtaining emergency medical care; and
  • any provisions requiring pre-authorization or utilization review as a condition to obtaining a benefit or service under the plan.

Additional group health plan disclosures required by the regulations include:

  • a requirement that an SPD either describe the plan's procedures for processing qualified medical child support orders (QMCSOs) or include a statement that participants and beneficiaries can obtain a copy of the procedures at no cost;
  • a disclosure of federal health care continuation coverage rights under COBRA;
  • a disclosure of the method used to fund the plan; 
  • a claims procedure which addresses any required pre-authorization, approval or utilization review;
  • for plans with a provider network, either a listing of the members of the network or a statement that a copy of the provider network can be obtained at no cost to the participant or beneficiary;
  • a required disclosure regarding the length of a hospital stay following newborn deliveries under the Newborns' and Mothers' Health Protection Act; and 
  • repeals the limited exemption for relating to SPDs of group health plans that provide benefits through qualified health maintenance organizations (HMOs).

Pension Plans

The regulations also impose additional requirements on pension plan SPDs, including:

  • a requirement that SPDs either describe the plan's procedures for processing qualified domestic relations orders (QDROs) or include a statement that participants and beneficiaries can obtain a copy of the procedures at no cost; and
  • for covered defined benefit plans, an updated PBGC statement of rights in connection with plan terminations.

Pension and Welfare Benefit Plans

The amendments to the final regulation also require that both pension and welfare benefit plan SPDs include the following:

  • a revised "Statement of ERISA Rights";
  • a statement regarding the plan sponsor's authority to terminate the plan or eliminate plan benefits; and
  • a claims procedure, or a statement that a copy of the procedure can be obtained automatically, without charge, from a separate document.

Editor's Note: In recent years, courts have permitted plan participants to sue for, and to receive, benefits based on plan descriptions and booklets provided to the participants. Accordingly, plan sponsors and administrators should review their plan descriptions and booklets to determine whether these documents meet the SPD requirements of ERISA and contain information that is consistent with the current benefit plan terms.

©2001 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

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