On August 27, 2021, the State of Illinois passed the Consumer Coverage Disclosure Act (Act) requiring a new health coverage disclosure to be provided to Illinois-based employees. The Act requires employers that sponsor group health coverage (both fully insured and self-funded plans) to provide all Illinois-based employees with a written list comparing the benefits covered under the group health plan against the essential health benefits (EHBs) that are required to be covered by Illinois individual health plans. This disclosure is intended to help employees make informed decisions by easily comparing the EHBs covered, or not covered, by their employer-sponsored group health plan.
Covered Employers: The Act applies to all private and public employers “for whom employees are gainfully employed in Illinois.” As such, an employer who “provides group health insurance coverage to its employees” is subject to disclosure requirements under the Act.
Model Disclosure Form: The Illinois Department of Labor (IDOL) webpage and FAQs provide guidance with information detailing the EHBs, which employers may rely on in their disclosures to employees. A model disclosure form issued by the IDOL (accessed from the IL DOL webpage here) may be used by employers to satisfy this disclosure obligation for its Illinois-based employees. Employers are not required to use the IDOL model form but are encouraged to consider using it as a compliance safe harbor.
Disclosure Timing & Delivery Methods: Employers must provide this disclosure to employees upon initial hire and then on an annual basis. In addition, employers are required to provide the disclosure to employees upon request. Employers can comply with the Act by providing the required disclosure document by email to its employees or posting it on a website that its employees are regularly able to access.
Recordkeeping/Non-Compliance Penalties: The Act requires employers to maintain records for up to one year that the disclosure was provided to employees and provide these records to the IDOL upon request. If the IDOL finds a violation, employers will be provided with a 30-day “grace period” to comply with the Act. If an employer fails to comply within the 30-day “grace period”, the IDOL may impose a penalty. Penalties range from $500 to $5,000, depending on the number of employees in Illinois and the frequency of violations.
Employers with Illinois-based employees are encouraged to work with their insurance carriers and/or TPAs to prepare this disclosure document.
Have additional questions? Contact us here.