Employers that sponsor ERISA group health plans should regularly confirm that all required plan information and documentation has been properly disclosed to participants. A recent federal district court decision highlights the importance of making sure all necessary information has been disclosed, which may be more than just the summary plan description or underlying plan document. Among other claims, the participant and his spouse and child (collectively, the “Plaintiff”) in the case brought claims against his employer as the plan administrator of the employer’s self-funded group health plan (the “Plan”), the third-party claims administrator of the Plan (the “TPA”), and the Plan itself (collectively, the “Defendants”) for penalty amounts under ERISA due to the failure of the Defendants to provide (i) the criteria used under the Plan to determine the medical necessity with respect to both mental health and substance use disorder benefits and medical/surgical benefits (the “Criteria”), and (ii) the… Continue Reading
Delta Air Lines announced last week that it is implementing a $200 monthly health plan premium surcharge for employees who have not been vaccinated against COVID-19. Employers contemplating a similar move should be aware of a number of associated legal considerations. These considerations include the applicability of the HIPAA wellness program rules for health-contingent wellness programs, which require, among other items, (i) offering employees a reasonable alternative to vaccination that can be used to avoid the surcharge, and (ii) a total dollar cap on incentives/surcharges. In addition, there are implications for determining the health plan’s “affordability” for purposes of the ACA employer penalties. The ADA rules requiring “reasonable accommodations” may also apply. Government agencies have not yet provided specific guidance regarding vaccine surcharges under applicable laws, unlike the guidance already provided concerning vaccine mandates. Employers should consult with legal counsel before implementing a vaccine surcharge program.