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Content Last Revised: 01/07/2002 |
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Code of Federal Regulations Pertaining to U.S. Department of Labor |
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Labor |
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Pension and Welfare Benefits Administration, Department of Labor |
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Rules and Regulations for Reporting and Disclosure |
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Disclosure Requirements |
29 CFR 2520.104b-3 - Summary of material modifications to the plan and changes in the information required to be included in the summary plan description.
- Section Number: 2520.104b-3
- Section Name: Summary of material modifications to the plan and changes in the information required to be included in the summary plan description.
(a) The administrator of an employee benefit plan subject to the
provisions of part 1 of title I of the Act shall, in accordance with
Sec. 2520.104b-1(b), furnish a summary description of any material
modification to the plan and any change in the information required by
section 102(b) of the Act and Sec. 2520.102-3 of these regulations to
be included in the summary plan description to each participant covered
under the plan and each beneficiary receiving benefits under the plan.
Except as provided in paragraph (d) of this section, the plan
administrator shall furnish this summary, written in a manner calculated
to be understood by the average plan participant, not later than 210
days after the close of the plan year in which the modification or
change was adopted.This disclosure date is not affected by retroactive
application to a prior plan year of an amendment which makes a material
modification to the plan; a modification does not occur before it is
adopted. For example, a calendar year plan adopts a modification in
April, 1978. The modification, by its terms, applies retroactively to
the 1977 plan year. A summary description of the material modification
is furnished on or before July 29, 1979. A plan which adopts anamendment
which makes a material modification to the plan which takes effect on a
date in the future must disclose a summary of that modification within
210 days after the close of the plan year in which the modification or
change is adopted. Under the authority of sections 104(a)(3) and 110 of
the Act, a summary description of a material modification or change is
not required to be disclosed if it is rescinded or otherwise does not
take effect. For example, a calendar year plan adopts a modification in
June, 1978. The modification, by its terms, becomes effective beginning
in plan year 1979. Before the beginning of plan year 1979, the
prospective modification is withdrawn. No summary of the material
modification is required to be disclosed.
(b) The summary of material modifications to the plan or changes in
information required to be included in the summary plan description need
not be furnished separately if the changes or modifications are
described in a timely summary plan description. For example, a calendar
year plan adopts a material modification on June 3, 1976. The
modification is incorporated in a summary plan description furnished on
July 15, 1977. No separate summary of the material modification is
furnished. The plan adopts another material modification September 15,
1977. A separate summary of the modification is furnished on or before
July 29, 1978.
(c) The copy of the summary plan description furnished in accordance
with Sec. Sec. 2520.104b-2(a)(1)(i) and 2520.104b-4 shall be acompanied
by all summaries of material modifications or changes in information
required to be included in the summary plan description which have not
been incorporated into that summary plan description.
(d) Special rule for group health plans--(1) General. Except as
provided in paragraph (d)(2) of this section, the administrator of a
group health plan, as defined in section 733(a)(1) of the Act, shall
furnish to each participant covered under the plan a summary, written in
a manner calculated to be understood by the average plan participant, of
any modification to the plan or change in the information required to be
included in the summary plan description, within the meaning of
paragraph (a) of this section, that is a material reduction in covered
services or benefits not later than 60 days after the date of adoption
of the modification or change.
(2) 90-day alternative rule. The administrator of a group health
plan shall not be required to furnish a summary of any material
reduction in covered services or benefits within the 60-day period
described in paragraph (d)(1) of
[[Page 436]]
this section to any participant covered under the plan who would
reasonably be expected to be furnished such summary in connection with a
system of communication maintained by the plan sponsor or administrator,
with respect to which plan participants are provided information
concerning their plan, including modifications and changes thereto, at
regular intervals of not more than 90 days and such communication
otherwise meets the disclosure requirements of 29 CFR 2520.104b-1.
(3) ``Material reduction''. (i) For purposes of this paragraph (d),
a ``material reduction in covered services or benefits'' means any
modification to the plan or change in the information required to be
included in the summary plan description that, independently or in
conjunction with other contemporaneous modifications or changes, would
be considered by the average plan participant to be an important
reduction in covered services or benefits under the plan.
(ii) A ``reduction in covered services or benefits'' generally would
include any plan modification or change that: eliminates benefits
payable under the plan; reduces benefits payable under the plan,
including a reduction that occurs as a result of a change in formulas,
methodologies or schedules that serve as the basis for making benefit
determinations; increases premiums, deductibles, coinsurance,
copayments, or other amounts to be paid by a participant or beneficiary;
reduces the service area covered by a health maintenance organization;
establishes new conditions or requirements (e.g., preauthorization
requirements) to obtaining services or benefits under the plan.
(e) Applicability date. Paragraph (d) of this section is applicable
as of the first day of the first plan year beginning after June 30,
1997.
(f)-(g) [Reserved]
(Approved by the Office of Management and Budget under control number
1210-0039)
[42 FR 37188, July 19, 1977, as amended at 62 FR 16985, Apr. 8, 1997; 62
FR 36205, July 7, 1997; 65 FR 70243, Nov. 21, 2000; 66 FR 34994, July 2,
2001; 67 FR 777, Jan. 7, 2002]
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