On August 27, 2021, the Consumer Coverage Disclosure Act (“CCDA”) was signed into Illinois law. While the CCDA went into effect immediately, the statute language promised guidance from the Illinois Department of Labor (IDOL) that has just been released as of November 16, 2021. The CCDA creates a new disclosure requirement for employers sponsoring employee health plans to disclose a written list of offered benefits that is compared to the list of essential health benefits issued by the State of Illinois.

Which employers need to fulfill this new obligation?

By the language of the statute, this disclosure requirement applies to all Illinois employers, regardless of whether their plan is self-insured. This definition includes any entity for whom employees are employed in Illinois.

There is an argument to be made that ERISA preempts this new statute.  However, until that is brought up in a courtroom, the enforcing agency may apply the requirement to all Illinois employers.

How do employers fulfill this new obligation?

The purpose of this new disclosure is to allow employees to easily compare the benefits offered by their employer to the list of essential health benefits provided by Get Covered Illinois, the state’s Marketplace.

Content

In the disclosure, employers must provide both a written list of benefits in their own group health coverage, and a comparison of those benefits to the essential health benefits in a format that easily compares the two.

On November 16, 2021, IDOL provided the spreadsheet at the link below with a chart listing all of the essential health benefits that employers may use as the disclosure to fulfill this new requirement. Use of this specific form is not required in order to comply with the new disclosure requirement, but employers would still need to ensure that their own disclosure fulfills all requirements of the CCDA.

https://www2.illinois.gov/sites/Insurance/Producers/Documents/ILDOL_Employer_EHB_List_PA_102-0630_final.xls

Distribution

The disclosure may be distributed by emailing it directly to employees, or by posting the disclosure on a website that employees are able to regularly access.

Recipients & Timing

This disclosure must be made to all Illinois employees eligible for an employer’s group health plan:

  • Upon the employee’s date of hire;
  • On an annual basis thereafter; and
  • Upon request.

Employers are required to maintain records of distribution for one year.

What consequences are there for employers that fail to fulfill this new obligation?

The Illinois DOL can request the required record of distribution of the new disclosure from employers. If a violation is found in the record, or there is no record, the IL DOL will issue a notice to comply within 30 days. If the employer fails to comply within that 30 days, the following penalties may be imposed:

  • For employers with fewer than 4 employees:
    • First offense not to exceed $500
    • Second offense not to exceed $1,000
    • Third or subsequent offense not to exceed $3,000
  • For employers with 4 or more employees:
    • First offense not to exceed $1,000
    • Second offense not to exceed $3,000
    • Third or subsequent offense not to exceed $5,000

Other circumstances, including good faith effort, may be taken into account when determining the appropriate penalty amount.

For further information, please visit the Illinois DOL’s CCDA FAQ at https://www2.illinois.gov/idol/FAQs/Pages/Consumer-Coverage-Disclosure-FAQ.aspx#qst1

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.