New SPD Content Rules - Require Numerous Changes To SPDs

Background And Effective Date

The Department of Labor also recently finalized its rules on the required content of summary plan descriptions ("SPDs"), which will require many revisions to SPDs for all types of ERISA plans.

In general, the effective date of the new SPD content rules is the first day of the second plan year beginning on or after January 22, 2001. This effective date does not apply to the interim rules that are finalized in the new SPD content rules, because those interim rules are already effective now.

Procedures Governing QDRO And QMCSO Determinations

The new SPD content rules require that the SPD of a pension plan include either a description of the plan's procedures governing qualified domestic relations order (QDRO) determinations, or a statement indicating that participants and beneficiaries can obtain, without charge, a copy of such procedures from the plan administrator. A corresponding disclosure applies to group health plans with respect to procedures governing qualified medical child support order (QMCSO) determinations.

Group Health Plan Disclosures

Under the new SPD content rules, SPDs of a group health plan must describe:

any cost-sharing provisions, including premiums, deductibles, coinsurance, and copayment amounts for which the participant or beneficiary will be responsible;

any annual or lifetime caps or other limits on benefits under the plan;

the extent to which preventive services are covered under 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 and 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; and

other items specified in the new SPD content rules.

Disclosure Of Plan Termination Information

Under the new SPD content rules, SPDs must include certain information relating to the authority of the plan sponsors (or others) to terminate the plan or to amend or eliminate benefits under the plan, and a summary of what happens to the benefits, rights and obligations of participants and beneficiaries under the plan on termination of the plan or amendment or elimination of benefits under the plan.

Imposition Of A Fee

Under the new rules, SPDs must include a summary of any provisions that may result in the imposition of a...