change in prescription coverage-notice required? when?

[t.haley]

My client has a fully insured health plan. insurer changed co-pays in prescription drug plan but has not issued any document to be distributed to participants notifying them of the change. The participants did not find out about the change until they went to have prescriptions filled at pharmacy or through mail order service. My question is - in a fully insured plan, who has the duty to inform participants of changes in plan specifics, such as co-pays and when does such notice have to be given (i.e. before the effective date of the change?)? Thanks.

[J Simmons]

The plan administrator would be responsible for providing notices that are required to be provided to EEs if the plan is subject to ERISA. If the plan is subject to ERISA, then a notice is required 'material reductions' (those changes that "independently or in conjunction with other contemporaneous modifications or changes, would be considered by the average plan participant to be an important reduction in covered services or benefits under the plan"--DoL Reg § 2520.104b-3(d)(3)(i)). The notice of a material reduction is required within 60 days of that reduction being adopted, or alternatively as part of communications provided in regular intervals of no more than 90 days. DoL Reg § 2520.104b-3(d)(1) and (2).

If the plan is not subject to ERISA (e.g., governmental employer), then it would be a matter of state law and any contractual provisions between the ER and the insurer.

[J Simmons]

As for whom the plan administrator would be, that is typically specified in group health policies to be the employer. Nevertheless, you should check the specific group health policy at issue, as well as any ERISA wrap document you may have. In the absence of any specification, then the plan administrator is the employer. ERISA § 3(16)(A).