Proposed changes to the forms and regulations that govern annual employee benefit plan reporting on Form 5500 were released recently. Of particular importance is a proposed new “Schedule J,” which would be filed with the Form 5500 by all group health plans. Schedule J is intended to implement the “transparency requirements” of the Affordable Care Act which, generally speaking, requires detailed information to be provided to the Department of Labor, the Department of Health and Human Services, the Internal Revenue Service, and state regulators. While at first glance it may appear that this is the government’s way of performing an “end run” around the Supreme Court’s recent decision in Gobeille v. Liberty Mutual Insurance Co. (striking down a Vermont all-payer claims database law as applied to an ERISA-governed health plan), it appears to us that the information being sought through proposed Schedule J is more “global” in nature and not claim-specific.
If adopted, the revisions to the proposed regulations pertaining to Form 5500 and its accompanying Schedules would apply for plan years beginning on or after January 1, 2019. The proposed Schedule J would require a broad array of information, including:
- An estimate of the number of participants and beneficiaries covered under the plan at the end of the plan year;
- The number of individuals offered COBRA coverage;
- Whether the plan offers coverage for employees, spouses, children or retirees;
- What type of group health benefits are offered under the plan (for example, health, surgical, pharmacy or prescription drug, mental health/substance use disorder, wellness program, preventive care, vision, dental);
- Information on whether the plan is funded through a health insurer and whether benefits are paid through a trust or from an employer’s general assets;
- Whether there are participant or employer contributions;
- Total premium payments for stop loss coverage, and information on the attachment points for this coverage, individual claim limits, and the policy’s aggregate claim limits;
- Whether the plan’s summary plan description (SPD), summaries of material modifications (SMM), and summaries of benefits and coverage (SBC) comply with governing content requirements; and
- Information regarding claims, such as:
- How many benefit claim denials were appealed during the plan year;
- How many appealed claims were upheld as denials, and how many were payable after appeal;
- Whether any claims for benefits were not adjudicated within the required timeframes; and
- The total dollar amount of claims paid during the plan year.
Check back with the Benefits Law Insider for updates on the status of proposed forms and proposed regulations pertaining to Form 5500.