The 2025 Required Annual Benefit Notices to Employees
By Brian Gilmore | Published July 26, 2024
Question: What are the required annual employer notices to employees related to health and welfare plans in 2025?
Short Answer: Employers must provide the Medicare Part D, CHIP, and WHCRA notices annually. All three can be satisfied together by timing their distribution to meet the October 15 Notice of Creditable Coverage deadline. Multiple other notices are not required to be distributed annually—although employers should consider including some of those additional notices with the required annual notice materials.
The mid-year update of the DOL Children’s Health Insurance Program (CHIP) Model Notice for Employers Regarding Premium Assistance Opportunities typically marks the unofficial start to the protracted health and welfare plan annual notice season for the upcoming year. However, given the uncertainty surrounding the Medicare Part D Notice of Creditable Coverage changes taking effect in 2025, employers should consider addressing the annual notice materials with haste this year to avoid any employee anxiety.
Required Annual Notice #1: Medicare Part D Notice of Creditable/Non-Creditable Coverage
When: Annually by October 15. However, employers should consider providing the notice earlier this year.
What’s Changing This Year: The Inflation Reduction Act (“IRA”) makes several modifications to Medicare Part D—including capping annual out-of-pocket costs at $2,000—that will put the creditable status of many employer plans in jeopardy starting in 2025. (Best Practice: Employers can alleviate employees’ concerns in this area by a) working with their insurance carrier, TPA, or other vendor early to determine the plan’s creditable status for 2025, and b) providing the notice informing employees of the plan’s creditable status as far in advance as possible of the October 15 Medicare Part D open enrollment period. For more details: IRA Changes Affect Notice of Creditable Coverage Considerations)
Why: To inform employees whether their employer-sponsored group health plan’s prescription drug coverage is at least as rich as a Medicare Part D plan.
To Whom: All Part D eligible individuals who are enrolled or seeking to enroll in the employer’s plan that provides prescription drug coverage. This includes all individuals enrolled in Part A or Part B who live in the service area of a Part D plan. (Best Practice: Provide the notice to all employees because employers will not know which employees, spouses, or dependents are enrolled in Part A or Part B, and they will not know which individuals are seeking to enroll in the employer’s plan).
How: Paper delivery by hand, first class mail, or electronic delivery for participants who “have access to the plan sponsor’s electronic information system on a daily basis as part of their work duties.” This electronic delivery standard generally follows the ERISA electronic disclosure safe harbor.
Penalties: No specific employer penalty, but employees must have the information to avoid potential Part D late enrollment penalties (the premium may go up by at least 1% of the Medicare based beneficiary premium for every month without creditable coverage).
Combining with Other Materials: Permitted as long as the notice is “prominent and conspicuous.” If not on the first page, the first page should include a separate box that is bolded or offset on the first page and prominently references the notice in at least 14-point font. (Model Language: “If you (and/or your dependents) have Medicare or will become eligible for Medicare in the next 12 months, a Federal law gives you more choices about your prescription drug coverage. Please see page xx for more details.”)
Model Notice: Creditable Coverage Model Notice Letters (Last updated in 2011)
Required Annual Notice #2: Children’s Health Insurance Program (CHIP) Notice
When: Annually. (Best Practice: Although there is no specific timeframe for this annual notice, we recommend providing it with the other required annual notices.)
Why: To inform employees that they may be eligible for premium assistance through CHIP or Medicaid state programs.
To Whom: All employees, regardless of enrollment status, residing in states providing CHIP/Medicaid premium assistance. (Best Practice: Provide the notice to all employees to avoid tracking each employee’s state premium assistance programs.)
How: Paper delivery by hand, first class mail, or electronic delivery where the ERISA electronic disclosure safe harbor is satisfied.
Penalties: Currently at $141/day/employee based on the 2024 indexed penalty amounts.
Combining with Other Materials: Permitted as long as the notice “appears separately and in a manner which ensures that an employee who may be eligible for premium assistance could reasonably be expected to appreciate its significance.”
Model Notice: Model Notice for Employers Regarding Premium Assistance Opportunities (Updated semi-annually each January 31 and July 31)
Required Annual Notice #3: Women’s Health and Cancer Rights Act (WHCRA) Notice
When: Upon enrollment and annually. (Best Practice: Although there is no specific timeframe for this annual notice, we recommend providing it with the other required annual notices.)
Why: To inform employees of the availability of coverage under the health plan for reconstructive surgery and other related items and procedures following a mastectomy.
To Whom: All participants and beneficiaries under the health plan. A separate notice must be furnished to a beneficiary (i.e., a spouse, domestic partner, or dependent) where the individual’s last known address is different than the last known address of the covered participant.
How: Paper delivery by hand, first class mail, or electronic delivery through the ERISA electronic disclosure rules.
Penalties: $100/day/employee under §4980D; potential employee ERISA breach of fiduciary duty claim.
Combining with Other Materials: Permitted.
Model Notice: Model WHCRA Notice (Pages 141-142)
Recommended Annual Notice #1: HIPAA Special Enrollment Notice
Employers are required to provide the HIPAA special enrollment notice at or before the time an employee is initially offered the opportunity to enroll in the health plan. There is no requirement to distribute the notice annually. Best Practice: Although there is no requirement to re-distribute the notice annually, we recommend providing it at the same time as the other required annual notices because of the importance of the special enrollment rights.
For more details: HIPAA Special Enrollment Events
Model Notice: Model Special Enrollment Notice (Page 138)
Recommended Annual Notice #2: Primary Care Provider Patient Protection Notice
Employers sponsoring a health plan with options that require designation of a primary care provider (e.g., HMOs) must provide the patient protection notice to plan participants whenever an SPD or other similar description of benefits is provided. There is no requirement to distribute the notice annually.
Best Practice: Although there is no requirement to re-distribute the notice annually, we recommend providing it at the same time as the other required annual notices because the DOL asks for evidence the employer provided it to participants in its standard list of documents to be produced in an investigation/audit context. The notice should also be included in the SPD.
Prior to 2022, this notice was not required for plans maintaining ACA grandfathered plan status. Effective as of the first plan year beginning on or after January 1, 2022, the CAA extended this notice requirement to also include grandfathered plans. Accordingly, both non-grandfathered and grandfathered plans are now subject to the primary care provider designation patient protection notice.
For more details: The ACA and CAA Patient Protections
Model Notice: Patient Protection Model Notice
Recommended Annual Notice #3: ADA Wellness Program Notice
Employers sponsoring a wellness program that includes medical examinations (e.g., biometric screenings) or disability-related inquiries (e.g., medical questionnaires) must provide an ADA notice addressing how the employer will protect and use information related to the program. There is no explicit requirement in the EEOC guidance to distribute the notice annually.
The EEOC ADA FAQ guidance provides that there is no requirement that employees receive the notice at a particular time. However, it also states that employees should receive the notice before providing any health information, and with enough time to decide whether to participate in the program.
Best Practice: Although there is no requirement to re-distribute the notice annually, we recommend providing it at the same time as the other required annual notices to avoid employees claiming that they were not adequately informed of their ADA rights with respect to the wellness program.
Note that a federal court in 2016 ruled that components of the EEOC wellness program rules do not meet the requirements of the ADA, and the EEOC has accordingly formally removed those aspects of the regulations.
Although the notice component was not removed, the EEOC issued new proposed ADA wellness regulations in January 2021 (the very end of the Trump administration) that would have eliminated the notice requirement. However, the Biden administration removed those proposed regulations shortly thereafter pursuant to a regulatory freeze memo issued on his date of inauguration. As a result of this chaotic regulatory landscape, it is not clear whether the EEOC is currently enforcing the notice requirement. We feel that the best practice approach is to continue following the EEOC regulations’ notice requirement until we have new guidance specifying the ADA requirements moving forward.
Model Notice: Sample Notice for Employer-Sponsored Wellness Programs
Other Non-Annual Notice #1: Newborns’ and Mothers’ Health Protection Act Notice
The NMHPA requires employers to include in the SPD a statement describing the plan’s required minimum hospital length of coverage in connection with childbirth for the mother and newborn child.
The NMHPA notice is not an annual notice requirement. DOL guidance confirms that including the NMHPA notice in the SPD is sufficient.
Other Non-Annual Notice #2: ACA Exchange Notice
The ACA requires employers subject to the Fair Labor Standards Act (FLSA) to provide the Exchange Notice (also frequently referred to as the “Marketplace Notice” or the “Notice of Coverage Options”) to new hires within 14 days of the employee’s start date. The notice informs employees of how to access alternative individual policy coverage through the Exchange. The Exchange Notice is not an annual notice requirement. Best practice is to include the Exchange Notice in standard new hire materials.
For more details: The ACA Exchange Notice
Other Non-Annual Notice #3: HIPAA Notice of Privacy Practices
Employers with a self-insured health plan must provide employees with a HIPAA Notice of Privacy Practices describing the plan’s use and disclosure of PHI upon enrollment and within 60 days of a material change to the notice. The HIPAA Notice of Privacy Practices is not an annual notice requirement.
HIPAA does require employers with a self-insured health plan to inform employees of the availability of the Notice of Privacy Practices at least once every three years. Employers with a self-insured health plan may choose to include this Notice of the Availability of the Notice of Privacy Practices with the annual legal notices every third year, or more frequently on a voluntary basis if so desired.
Sample language for the Notice of the Availability of the Notice of Practice Practices:
“The [Enter Plan Name]’s use and disclosure of protected health information (PHI) under its self-insured health plan options is described by a HIPAA Notice of Privacy Practices maintained by [Enter Employer Name]. One of our responsibilities under HIPAA is to periodically remind you of the availability of this Notice of Privacy Practices should you want more information about the Plan’s procedures to protect and secure the confidentiality of your PHI. You may access the Plan’s HIPAA Notice of Privacy Practices by [Enter Method of Accessing Notice]. Contact People Operations if you have any questions.”
For more details:
Also note that recent changes to HIPAA addressing reproductive health care will require updates to the Notice of Privacy Practices with descriptions and examples of the new reproductive health rules, as well as additional new restrictions related to the confidentiality of substance use disorder treatment records. Employers have an extended compliance period until February 16, 2026 to make those modifications.
For more details: New HIPAA Reproductive Health Rules
Other Non-Annual Notice #4: The COBRA Initial Notice
Covered employees and spouses must receive the COBRA initial notice within 90 days of enrollment. Employers typically delegate this responsibility to the COBRA TPA, which will generally send the notice upon enrollment via U.S. mail addressed to both the employee and spouse to satisfy both obligations. The COBRA initial notice is not an annual notice requirement.
For more details:
Other Non-Annual Notice #5: CAA Surprise Billing Notice and ACA Machine-Readable Files
The CAA requires employers that maintain a public website for their group health plan to post a Notice Regarding Patient Protections Against Surprise Billing on that site. CMS updated the model notice to a new “Version 2” that must be used for plan years beginning on or after January 1, 2023.
The ACA now requires that employers sponsoring a self-insured, non-grandfathered medical plan post links to machine-readable files containing transparency in coverage cost information if they maintain a public website for the group health plan. The requirement took effect July 1, 2022. Neither of these new CAA and ACA disclosures are annual notice requirements. For more details:
Links to Required and Recommended Annual Notices Many employers prefer to provide employees with online access to the annual notice materials. Here is a sample message that employers can use to distribute annual notices electronically:
2025 Health Plan Annual Notices
The Company is required by applicable law to provide you with certain notices each year that inform you of your rights and our responsibilities with respect to the Company’s health plan (the “Plan”).
Please carefully review the information contained below and share it with your covered dependents. We suggest you keep this information with your Summary Plan Description (“SPD”) for future reference.
[Company’s Plan Provides Part D Creditable Coverage]
[Company’s Plan DOES NOT Provide Part D Creditable Coverage]
In the event of a conflict between the official Plan Document and these legal notices, the SPD, or any other communication related to the Plan, the official Plan Document will govern. If you have any questions or would like to obtain a paper version of these notices, please contact People Operations.
Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipient’s current employee benefits issues. This analysis does not necessarily fully address the recipient’s specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship. Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipient’s general counsel or an attorney hired by the recipient who specializes in employee benefits law).
Brian Gilmore
Lead Benefits Counsel, VP, Newfront
Brian Gilmore is the Lead Benefits Counsel at Newfront. He assists clients on a wide variety of employee benefits compliance issues. The primary areas of his practice include ERISA, ACA, COBRA, HIPAA, Section 125 Cafeteria Plans, and 401(k) plans. Brian also presents regularly at trade events and in webinars on current hot topics in employee benefits law.
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