Giving Retirees Clear Notice of a Change
Good notice reduces complaints and supports the employer if a dispute arises. Here is what a retiree notice should say and how to deliver it.
What the Notice Should Say
Retirees need practical information, not legalese.
What Is Changing and When
State the change, the effective date and who is affected in the first paragraph. Retirees should not have to search for the key facts to understand what is happening. Short sentences and plain words work better than legal language, and a one-page summary on top of a longer notice helps those who read only the first page.
What Retirees Can Do
Describe the alternatives, enrollment dates and where to get help. A notice that points to next steps reduces gaps in coverage and unnecessary calls. A simple table of choices, dates and contact numbers makes the notice easier to act on and reduces follow-up calls.
How Medicare Fits
Explain what happens with Medicare coordination so no one is left uncovered by mistake. Retirees often assume Medicare will fill gaps and may not realize otherwise. Retirees nearing Medicare eligibility or in their first months of enrollment are especially likely to be confused and may need extra explanation.
Timing and Channels
Reach people in the way they will see it.
Allow Lead Time
Give enough time to compare options and enroll elsewhere, particularly where Medicare timing is involved. The right amount of time depends on the change and the documents, so confirm with counsel. Consider the advice of counsel on the timeline, since some changes carry minimum notice periods under the documents or other rules.
Use More Than One Channel
Mail, email and a retiree meeting together reach more people than any one alone. Use the channels retirees actually use and update addresses ahead of time. Update address records before mailing and consider a second mailing to retirees whose first notice was returned.
Track Delivery
Keep records of what was sent, when and to whom, including returned mail. Delivery records are valuable if someone later says they did not receive notice. Keep copies of the notice, the mailing list and the proof of delivery together with the decision file.
Helping People Through the Change
Support prevents gaps in coverage.
Provide a Contact
Name a person or line retirees can call with questions and make sure they are prepared to answer. Consistency of answers matters as much as availability. Make sure the person answering questions has the same information as the notice, so retirees hear one consistent story.
Hold Information Sessions
Short sessions, in person or online, answer questions at scale and show good faith. Record the sessions’ content and attendance for your files. Offer sessions at different times and in different formats, and provide a recording or summary for people who cannot attend.
Following Through with Non-Responders
Check with retirees who have not enrolled in anything before the deadline. A personal call can prevent a gap in coverage for someone who missed the notice. A friendly call before the deadline costs little and can prevent a retiree from losing coverage by accident.
When a plan must tell participants about a change.
A Material Reduction
A group health plan must give each covered participant a summary of a material reduction in covered services or benefits no later than 60 days after the change is adopted. Plan the notice at the same time as the change itself, and keep a copy of what was sent and when.
What Counts As Material
A change the average participant would consider an important reduction, including eliminating or reducing benefits, raising premiums, deductibles, coinsurance or copayments, shrinking an HMO service area, or adding conditions such as preauthorization. When a change is borderline, treat it as material and communicate it, and ask counsel if there is doubt.
A 90 Day Alternative
The 60 day rule does not apply to participants who regularly receive plan information through a communication system that goes out at intervals of no more than 90 days and meets the disclosure rules. Confirm that the retiree communication schedule actually meets the disclosure rules before relying on this option.
Other Plan Changes
A summary of any other material modification is due no later than 210 days after the end of the plan year in which it was adopted. Keep a running log of smaller changes through the year so the summary is ready well before the deadline.
Plain Language
Summaries must be written in a way the average participant can understand. Avoid dense plan terms, explain what changed and what it means for the participant’s costs or access, and consider having someone unfamiliar with the plan read the notice before it goes out. Include a contact for questions.
A Timely Plan Description Counts
A change that is described in a timely updated summary plan description does not need a separate summary. Check that the updated summary plan description was actually distributed on time and that the change is described clearly in it, and keep proof of distribution with the plan records.
Source: 29 CFR 2520.104b-3.
Questions about retiree notices
Questions employers ask about this topic.
How much notice is enough?
It depends on the documents and the nature of the change. Allow time for retirees to act.
Do we send to dependents?
Include covered dependents where appropriate.
Should counsel review it?
Yes, before it goes out.
What about retirees who moved?
Keep addresses current and use multiple channels.
Ready? Send us your renewal, or talk it through with someone first. No cost, no obligation.
General information about retiree health benefits, not legal or tax advice. Rights depend on specific documents and facts, so involve counsel before acting.
Related Reading: Retiree Health Benefits: Consistent Treatment of Retiree Groups.
Related guides.
Retiree Health Benefits Guide
/retiree-health-benefits-promises-vesting-changes-employer-guide/
Employee Notices
/employee-notices/
Confirming the Right to Change
/retiree-health-benefits-confirming-right-to-change-guide/
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
Laws and rules referenced
42 U.S.C. § 1395y(b)(1) and 42 C.F.R. § 411.172 — Medicare pays second to a group health plan for working aged employees of employers with 20 or more employees.
42 U.S.C. § 1395w-132 — The retiree drug subsidy for employers that offer qualifying drug coverage to Medicare-eligible retirees.
29 U.S.C. § 1163 — COBRA qualifying events, such as termination, reduced hours, death, divorce or Medicare entitlement.
This page is general information, not legal or tax advice. Rules change and facts matter, so confirm your situation with counsel or a qualified advisor.
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