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3.60 Disclosure of Benefits

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Model Policy


It is the policy of Comfort Keepers to provide its employees with various welfare benefits.  Information and summaries intended to explain these benefit plans will be furnished to all plan participants and beneficiaries on a timely and continuing basis.  Comfort Keepers reserves the right to modify, amend, or terminate its welfare benefits as they apply to all current and former employees.  The Administrator of the benefit plans has the discretionary authority to determine eligibility for benefits and to interpret the plan’s terms.




This establishes Comfort Keeper’s recommended protocol for disclosing benefits to employees.




1.Comfort Keepers offers certain benefits to eligible employees, including a health plan.  Eligibility will depend upon specific requirements of each benefit plan.  Comfort Keepers also provides a number of other benefits such as leaves of absence and paid vacation, sick days, and holidays.


2.All benefits provided by Comfort Keepers are described in official documents that are kept on file in the Human Resource Department.  These documents are available for examination by any plan participant or beneficiary.  In addition, these documents are the only official and binding materials concerning Comfort Keepers’ welfare benefits.  All summaries and communications, both written and verbal, must refer to them as binding in cases of questions or disputes.


3.The HR Specialist serves as the Administrator of Comfort Keepers’ welfare plan.  The Administrator is responsible for all communications and disclosures concerning Comfort Keepers benefits and for compliance with all applicable laws and regulations.  In addition, the Administrator is available to answer questions concerning the benefit plans.


4.Under typical circumstance, the Administrator will furnish the following information to each participant in a welfare plan:


a.A summary plan description of the plan within ninety days after the individual becomes a participant or first receives benefits;
b.An updated summary plan description of the plan as needed;
c.A summary description of any material modification of the plan within 210 days after the end of the plan year in which the modification is adopted; and
d.A summary of the latest annual report of the plan within nine months after the close of the plan year.


5.If the plan participants make a written request for information concerning Comfort Keepers benefit plans, the Administrator will provide complete copies of the latest updated summary plan description; the latest annual report; and any terminal report.  The Administrator may make a reasonable charge to cover the cost of providing the copies.


6.Participant contributions to benefit plans will be deducted from the employee’s paycheck if the employee has authorized the deduction in writing.  Contributions to benefit plans are not included in the employee’s gross wages for income tax purposes.


7.The Administrator will provide written notice to any participant whose claim for benefits under an employee benefit plan has been wholly or partially denied, within a reasonable period of time of the denial.  The notice should contain the reason for the denial, specific reference to the plan provisions on which the denial is based, and appropriate information about the steps to be taken if the participant wants to submit the claim for review.  Any review should be completed promptly and a decision provided to the claimant.


8.Employees, spouses, and dependents covered by Comfort Keepers’ health benefit plan will be notified, when appropriate, of the opportunity to continue their health care coverage, at their own expense, in certain specified situation including layoff, termination, reduction in hours of employment, and separation or divorce.  In addition, they will be provided, when required, with a certificate of prior health coverage when they lose coverage under the health benefit plan.


Best Practice Guidelines




The Employee Retirement Income Security Act (ERISA) established reporting and disclosure requirements that are to be followed for welfare and pension plans.  In preparing SPDs, keep the following in mind:


a.The SPD is to be written in a manner such that the average plan participant can understand it. The Plan Administrator should consider the level of comprehension and education of typical participants in the plan and the complexity of terms of the plan.
b.The SPD is comprehensive in that it advises plan participants and their beneficiaries of their rights and obligations under the plan.
c.All aspects of the plan are to be clearly stated to avoid misleading statements or omission of facts. This applies not just to the content of the information, but to captions and type size as well. Advantages and disadvantages should be equitably presented.
d.If 10 percent or more of the employees are literate in the same non-English language, assistance is to be provided to help with understanding the plan.


Information to be included in the SPD:

a.The name of the plan, including its commonly known name, if different.
b.The name and address of the employer or employee organization where applicable; name, address and phone number of the Plan Administrator.
c.Detailed information on how to obtain information about the plan, who is responsible for the plan's administration, employer identification number (EIN) which is assigned by the IRS, name and address of the person designated as the agent for service of legal process, name, title and address of each plan trustee, plan year for fiscal reporting, how claims can be presented and what remedies are available if benefits are denied, ERISA rights.
d.For pension plans, a description of joint and survivor provisions, information on PBGC guarantees, how years of service are calculated, vesting, breaks in service, and other issues where service impacts benefits, how the plan is funded.
e.The type of pension benefit, such as defined contribution, profit sharing, etc., the sources of contributions to the plan and where the benefits are provided from, such as an insurance company, trust fund, etc.
f.Pension plans are to contain clear statements on circumstances in which disqualification, ineligibility, denial or other conditions may result in loss of benefits, how benefits may be changed or modified, ERISA rights, the availability of plan documents for inspection (including where), identification of eligibility for participation in the plan, such as age or service requirements, and for retirement plans, information on normal retirement age and other conditions which might apply to qualify for receiving benefits.
g.The type of plan administration, such as insurer administration, contract administration, etc.
h.For employee welfare benefit plans, the SPD should contain a statement of eligibility requirements, a summary of the benefits and reference to how detailed schedules can be obtained.


Unless the preparer of the SPD has training on the contents and format required, the insurance company, benefits consultant or lawyer may be used to prepare or to review the plan for required content of information. The ERISA regulations provide model language on ERISA and PBGC requirements.


In preparing the SPD, the language should be kept simple and technical jargon avoided. It's easy for human resources professionals to lose sight of the audience and fail to clearly define terms. A well-communicated document is beneficial for the company as well as the employee. Use the SPD to the company's advantage and present the data as a positive communication, rather than as a legally required burden.


Benefit Plan Disclosure Requirements



Benefit Plan

Send to



Notice to participants and their spouses of COBRA rights for welfare plans.

Provided by Plan Administrator

Initial COBRA notice must be furnished no later than 90 days after the date that

coverage begins (or, if later, 90 days after the date on which

the plan first becomes subject to COBRA.

Plan administrator provides election notice within 14 days upon receiving information of a qualifying event having occurred. COBRA allows the employer 30 days to notify the plan administrator of the qualifying event. If the employer is also the plan administrator, the Election Notice may be provided within 44 days of the date of loss of coverage.

When a plan administrator receives from an employee or other qualified beneficiary notice of a qualifying event, second qualifying event or determination of disability by the Social Security Administration, and the administrator determines the individual is not entitled to COBRA coverage, the administrator must provide the qualified beneficiary with a .

Plan administrator must provide employee or other qualified beneficiaries a Notice of Termination notifying the qualified beneficiary of the termination of their coverage if the termination takes effect prior to the end of the end of the maximum applicable period of coverage. The notice must be provided as soon as is practicable one the administrator determines that coverage will terminate early due to a permissible terminating event as set forth in COBRA regulations.

Survivor Annuity Notice

Notice of Right to Waive Qualified Joint-and-Survivor Annuity (QJSA) and Qualified Pre-retirement Survivor Annuity (QPSA) IRC §417(a)(3). This waives right to benefit, spouse’s right to benefit, and right to revoke waiver for defined benefit and defined contribution plans (which do not subsidize entire cost of survivor annuity).

Plan Administrator provides notice to participants

QJSA provided 90 days prior to annuity start date
QPSA generally provided between participant's 32nd and 35th birthday.

HIPAA Certificate of Health Plan Coverage

Notice provided to health plan participants of time period for health coverage.

Plan Administrator provides to participants

Must be provided by COBRA qualifying event notice deadline OR within reasonable amount of time if participant requests within 24 hours of coverage end date.

Notice of Period of Pre-Existing Condition Exclusion

Notice provides pre-existing condition exclusion period, basis of determination, and provides opportunity to present additional evidence of creditable coverage for group health plans

Plan Administrator or health insurance provider provides this notice to participants with the pre-existing condition.

"Reasonable" amount of time upon receipt of certificate of creditable coverage.

Special Enrollment Rights

Provide notice to those participants who qualify for special enrollment into group health plans.

Plan Administrator or health insurance can provide notice

Provide notice no later than participant's enrollment period.

Summary Plan Description

ERISA requires a summary plan description be provided to all participants/retirees for all benefit plans.

Provided by Plan Administrator

Due within 90 days of eligibility date.

Summary of Material Modifications

Summary of changes to any information in SPD(s) for all benefit plans.

Provided by Plan Administrator

Due within 210 days following end of plan year when modification occurred. Exception SMM not required if revised SPD was provided.

Statement of Accrued Vesting Benefits



Due within 30 days of request.

Women's Health and Cancer Rights Act Notice

States benefits under the Women's Health and Cancer Rights Act, including applicable deductibles and coinsurance limits for group health plans.

Plan Administrator provides to participants and beneficiaries

Due upon enrollment and annually.

Explanation of Rollover and Certain Tax Options

Notifies recipient of rollover option for distribution (defined benefit and defined contribution plans) into a qualified plan (i.e. IRA). Tax rules for distributions not rolled over are also included (mandatory 20% withholding).

Plan Administrator provides to those who receive or are eligible to receive a rollover distribution

Due no less than 30 and no more than 90 days before the initial payment start date.

Age 70 1/2 Distribution Requirements

Notifies terminated vested participants and active participants (if defined benefit/defined contribution plan requires) who become 70 1/2. Also for participants older than 70 1/2.

Plan Administrator provides to these participants

Due by April 1.

[Effective April 8, 2002, the Department of Labor issued their final rule that employers can send electronic distribution of benefit plan information to employee's residences if employee agrees to electronic notification. There must be the option to receive notification in hardcopy as well. In addition, the rule outlines provisions for using electronic means for employee benefit plan recordkeeping as required by ERISA. This ruling applies to all reports, statements, notices, and other documents required to be distributed by ERISA.]


CKFI Recommendation


There are a number of advantages to offering health benefits to your workers. Here are a few of the major ones:


Attract and retain the most qualified employees. Whether health insurance is absolutely necessary to attract and retain the most qualified employees will depend upon factors such as whether your competitors or other similarly sized employers in your area are offering health insurance.


Gain tax advantages. You can offer employees something that increases their compensation package and yet allows you an income tax deduction for the contribution, so that your out-of-pocket cost is less than the value of the benefit to the employee. Self-employed individuals can deduct 100 percent of their health insurance premium costs as a business expense in 2003 and thereafter. You can always deduct 100 percent of premiums for your employees. If the business is incorporated, all costs for your own insurance, as well as your employees', is deductible.


Offer employees group purchasing power. Even if you decide not to contribute anything toward your employees' health insurance, you can offer them the opportunity to obtain group rates through your business.


Ensure the wellness of your workers. Many insurance plans offer preventative care that can keep employees healthy and working. If employees don't get preventative care and yearly physicals (which they might not do if they don't have insurance), you could end up having more employees out for long periods of time with serious illnesses.


There is a downside to offering health benefits, too. Some of the "cons" of offering health benefits are:


a.The costs. Health care costs have risen enormously in recent years. As a result, not only are the costs draining valuable resources from many small employers, the uncertainty makes financial planning extremely difficult.


b.The sometimes tense business of cost-sharing with employees. There is a way for a small employer to control costs and return certainty to the process: push any additional costs on to employees. While that may solve the financial problems, it creates many others. Even if you don't want to push all the costs on to employees, pushing some of the costs on to them is inevitable.


c.The administrative hassles. Even though the insurance company from whom you purchase the health insurance will usually act as plan administrator, you will have to choose the insurer and then spend part of your time filling out forms, remitting premiums, and acting as intermediary between employee and insurer, among many other tasks.


d.The potential liability. The potential for liability for selecting a health care provider that commits malpractice on an employee does exist. While this risk is small and should not be the driving reason behind a decision not to offer health insurance, you should be aware that several employers have been sued by their employees for what they contend was their employer's carelessness in selecting a provider.


To offset these cons, at present CKFI supports working with a Benefits Broker in your area.


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