Last year, the State of Illinois passed a law called the Consumer Coverage Disclosure Act (CCDA). The CCDA requires a written disclosure to be provided by every employer who has employees in the State of Illinois and who also provides group health insurance coverage to those employees.

The disclosure must “provide all employees eligible for the coverage a written list of the covered benefits included in the group health insurance coverage in a format that easily compares those covered benefits with the essential health insurance benefits required of individual health insurance coverage regulated by the State of Illinois.”

The disclosure is in addition to providing employees a Summary Plan Description (SPD) and Summary of Benefits and Coverage (SBC). The State of Illinois wants employers to provide more transparency around the coverage that is being offered to employees. Some employer plans may be regulated by other states that have different essential health insurance benefit requirements than Illinois. Additionally, large group health plans and self-funded plans are not required to cover all essential health insurance benefits. This disclosure is intended to help employees (and their eligible family members) determine if they should enroll in coverage through their own employer’s plan, in the individual market, or elsewhere.

The disclosure is required by employers of any size and regardless of whether the group health insurance coverage is fully insured or self-insured. The disclosure is required upon hire, annually, and upon request. With open enrollment approaching for many Illinois employers, now would be an ideal time to consider distributing the annual notification.

Employers will need to keep records of their disclosures for one year. If audited by the State and proof of the disclosure cannot be provided, financial penalties may apply. However, employers will have 30 days to come into compliance before any financial penalty will apply. Penalties can range between $500-$5,000 per offense. The Illinois Department of Labor (IDOL) has published some information and resources to help employers comply with the CCDA disclosure requirement. That information can be found below:

• CCDA Website
• Frequently Asked Questions
• Model Notice