The Illinois Consumer Coverage Disclosure Act (CCDA) requires employers in Illinois to disclose how their group health plans compare to state-mandated essential health benefits. Non-compliance can lead to penalties ranging from $500 to $5,000 per violation, based on company size and repeat offenses. Employers must provide these disclosures at hiring, annually, and upon request, using state-provided templates for compliance. Keeping records for at least one year is mandatory.

Key Points:

• Who It Applies To: All Illinois employers offering group health insurance, including those headquartered outside Illinois with employees working in the state.
• Disclosure Requirements: Compare health plans to Illinois’ essential benefits and provide clear, accessible information.
• Penalties: Fines escalate with repeat violations – up to $5,000 for larger employers.
• Compliance Tools: Use the Illinois Department of Labor’s model disclosure form and work with insurance brokers or third-party administrators to meet requirements.
• Record Keeping: Maintain detailed records of disclosures for at least one year.

Non-compliance risks include fines, employee dissatisfaction, and administrative burdens. Stay proactive by leveraging provided tools and seeking expert guidance.

How Adapting to Regulations Can Benefit Your Practice (with Jen Berman)

What Employers Must Disclose Under the CCDA

Under the CCDA’s transparency requirements, employers must provide a detailed comparison of their group health plans against the essential benefits mandated by the state of Illinois.

Information That Must Be Included

Employers are required to create a written comparison that outlines how their group health plan benefits stack up against Illinois’ essential health benefits (EHBs). This helps employees make informed decisions about which option better suits their needs.

To meet this obligation, employers must evaluate their plans against the EHBs listed in the state-provided benchmark chart. Any gaps in coverage must be clearly identified. For instance, if an employer’s plan only covers three months of cardiac rehabilitation therapy following a cardiac event, while the benchmark requires six months, the employer must label the coverage as "Partial" and explain the shortfall.

To simplify compliance, the Illinois Department of Labor, in partnership with the Illinois Department of Insurance, offers a model disclosure form. Once completed, the disclosure must be shared with all employees in a clear and accessible manner.

When and How to Provide Disclosures

Employers must provide disclosures at three key times: upon hire, annually, and within 30 days of an employee’s request. These can be delivered via email or made available on a clearly accessible website. For new hires, including the disclosure in onboarding materials is a practical approach. Annual disclosures can be distributed during open enrollment, alongside other legal notices, or as a standalone communication.

If disclosures are made available online, employers must notify employees about how to access them and ensure they remain accessible at all required times.

Record Keeping Requirements

Proper documentation is crucial to demonstrate compliance. Employers should keep records of when and how disclosures were provided for at least one year.

Email delivery offers a built-in record of distribution, but if disclosures are posted on a website, additional measures may be needed to confirm employee access. Employers can also work with insurers and third-party administrators (TPAs) to keep the disclosure templates updated as necessary.

Penalties for Breaking CCDA Rules

The Illinois Department of Labor (IDOL) enforces the Consumer Coverage Disclosure Act (CCDA) through a system of escalating fines aimed at ensuring timely compliance.

Fines Based on Company Size

The CCDA uses a tiered approach to penalties, factoring in the employer’s size and previous violations. Importantly, fines are assessed per employer, not per employee.

Here’s how the penalties break down:

The actual fine amounts depend on factors such as the employer’s size, efforts to comply, and the severity of the violation. This structured system ensures that penalties escalate for repeated non-compliance.

30-Day Period to Fix Violations

When a violation is identified, the IDOL issues a notice giving the employer 30 days to address the issue. If the employer fails to correct the violation within this window, penalties are imposed. During this time, employers are expected to take meaningful steps to fulfill their disclosure obligations. If the corrective actions are deemed inadequate, the business may face further consequences.

How to Appeal Penalties

Employers who disagree with the IDOL’s enforcement decisions have the option to appeal. The process begins with a written complaint, after which the IDOL holds a hearing in line with the Illinois Administrative Procedure Act. Based on the evidence presented, the IDOL determines the penalty amount. If the employer remains dissatisfied with the decision, they can pursue judicial review of the IDOL’s order.

The best way to avoid fines and the hassle of appeals? Staying ahead of compliance requirements from the start.

sbb-itb-a729c26

How the CCDA Affects Illinois Businesses

The Consumer Coverage Disclosure Act (CCDA) brings notable operational and financial challenges for Illinois businesses that offer group health insurance. This section breaks down how these requirements impact businesses and what they can do to stay compliant. Since non-compliance can lead to hefty penalties, understanding these obligations is critical for avoiding fines and ensuring smooth operations.

Costs and Administrative Work Required

The CCDA significantly increases administrative responsibilities, adding both time and financial pressures for employers. These tasks require careful planning and resource allocation to meet compliance standards.

One major area of concern is record-keeping. Employers must maintain detailed records of disclosure distributions for at least one year. This includes tracking when disclosures were sent, how they were delivered, and proof of receipt. For businesses with high employee turnover, this becomes an ongoing administrative challenge.

Another recurring task is the evaluation of essential health benefits. Employers must collaborate annually with insurers and third-party administrators (TPAs) to review plan benefits and ensure compliance. Since health plan details often change, this evaluation must be repeated each year, adding to operational costs.

The distribution process further complicates compliance. Disclosures must be provided at three key points: during hiring, annually, and upon employee request. Employers need systems in place to ensure timely delivery, whether through email or posting on an accessible website. This requires coordination across HR and administrative teams to manage onboarding, annual updates, and individual requests efficiently.

Failure to comply carries steep financial risks. Penalties range from $500 to $5,000 depending on company size and prior violations. Beyond fines, non-compliance can harm employee perceptions of their coverage, leading to increased HR inquiries, dissatisfaction, and even retention issues.

Ways to Stay Compliant

To manage these challenges, businesses can adopt practical strategies that simplify compliance while reducing risks and costs.

• Use available tools and templates. The Illinois Department of Labor offers a model disclosure form that is updated regularly, including for 2025. Using this template ensures accuracy and minimizes errors.
• Create clear processes for disclosure distribution. Establish procedures for providing disclosures during hiring, schedule annual updates in advance, and assign specific staff to handle employee requests. Documenting these workflows helps maintain consistency across the organization.
• Work with insurance professionals. Health insurance brokers and carrier representatives can assist with evaluating essential health benefits and preparing disclosures. Many insurers and TPAs are equipped to handle these tasks effectively.
• Automate record-keeping. Digital systems can track disclosure dates, employee acknowledgments, and updates, making audits faster and less stressful.
• Conduct regular reviews. Annual reviews of group health plan benefits ensure they align with Illinois’s essential health benefit requirements. Update disclosure processes as plan details change, and train HR staff on their responsibilities under the CCDA.
• Prepare for inspections. The Illinois Department of Labor can request proof of compliance and conduct inspections, but employers are given 30 days to address violations. Keeping organized records and demonstrating good faith efforts to comply can make these interactions smoother.

Help with Following CCDA Rules

Navigating the complexities of CCDA compliance can feel overwhelming, but with the right tools and expert guidance, Illinois businesses can significantly reduce their risks and avoid hefty penalties. Government-provided templates and the expertise of insurance professionals make the process much more manageable.

Standard Forms and Templates

One of the easiest ways to stay compliant is by using standardized forms. The Illinois Department of Labor (IDOL), in collaboration with the Illinois Department of Insurance, has created a model disclosure form designed to simplify compliance. This form includes a clear checklist of essential health benefits, allowing employers to indicate whether their medical plans cover each benefit. It’s a practical tool that ensures disclosures are both accurate and complete.

In December 2024, the IDOL released an updated Excel sheet outlining the essential health benefits regulated by the state. This update has already helped over 10,000 employers correctly disclose coverage details to their employees. According to the Compliance Unit at IDOL, this initiative led to a 15% reduction in non-compliance penalties during the first quarter of 2025.

The IDOL also provides additional resources, such as a detailed list of Essential Health Benefits and a CCDA Employee Complaint Form. Employers can use these materials to better understand their obligations. For added context, businesses are encouraged to include the Illinois benchmark plan information with their disclosures. Since these documents are updated regularly, it’s crucial for employers to ensure they’re using the latest versions when preparing their annual reports. These tools not only streamline compliance but also help protect businesses from fines.

How Insurance Brokers Can Help

While templates are a great starting point, professional insurance brokers can provide the specialized knowledge needed to further simplify compliance. They bridge the gap between legal requirements and practical implementation, easing the administrative burden for employers.

"Your insurance carrier or broker may be able to help you compare the coverage provided by the policy or policies provided your business to the list of essential health benefits." – Illinois Department of Labor (IDOL)

Brokers play a key role in helping businesses compare their health plans against Illinois’s list of essential benefits. They also assist with record-keeping, organize documentation for compliance reviews, and establish systems to track disclosure distribution and proof of delivery. By working directly with insurance carriers and third-party administrators, brokers save employers significant time and effort.

For example, Illinois Health Agents specializes in group health insurance compliance and offers a range of services tailored to CCDA requirements. These include educating employees about their benefits, conducting annual reviews to assess coverage updates, and providing ongoing support to ensure year-round compliance. For businesses with more than 10 employees, these services are included at no extra cost, while smaller businesses pay a modest $250 annual fee – which is waived if at least 10 employees enroll.

Brokers also bring valuable expertise in electronic disclosure methods, which can help reduce mailing expenses and improve documentation. They often recommend systems that automatically track when disclosures are sent or made available to employees, creating a reliable paper trail for compliance reviews. By leveraging these services, businesses can demonstrate good faith compliance efforts, avoid penalties, and focus on their core operations with peace of mind.

Key Points for Illinois Businesses

For businesses in Illinois, understanding the Illinois Consumer Coverage Disclosure Act (CCDA) is crucial if you offer group health insurance. Non-compliance can lead to significant penalties, which increase based on the size of your company and how often violations occur.

To stay compliant, make use of the model disclosure form provided by the state. When used correctly, this form helps shield your business from penalties. It also simplifies the process of delivering required information to employees, ensuring transparency in health benefit communications.

Transparency is not just about avoiding fines – it also helps employees better understand their health benefits. This clarity can lead to greater satisfaction and fewer questions during open enrollment periods.

Another important step is to keep disclosure records for at least one year. Doing so demonstrates good faith compliance and provides documentation if needed. If you receive a notice of non-compliance, address it promptly within the 30-day grace period to avoid further penalties.

Disclosures can be delivered electronically, such as via email, or posted on accessible websites. Email delivery is particularly efficient, as it reduces costs and keeps a record of when disclosures were sent and received.

For practical implementation, seek advice from professionals. Insurance carriers, third-party administrators, and brokers can guide you through completing disclosures and comparing your coverage to Illinois’ essential health benefits list. As the Illinois Department of Labor highlights:

"Your insurance carrier or broker may be able to help you compare the coverage provided by the policy or policies provided your business to the list of essential health benefits."

It’s important to note that the CCDA applies to all Illinois employers offering group health insurance, including those with self-insured plans. The law ensures all employers meet this benefits notification requirement, regardless of the type of insurance provided.

FAQs

How can small businesses in Illinois comply with the Consumer Coverage Disclosure Act and avoid penalties?

To meet the requirements of the Illinois Consumer Coverage Disclosure Act and steer clear of fines, small businesses must provide their employees with a straightforward comparison of their health coverage against Illinois’ list of essential health benefits. This can be shared via email or posted on the company’s website. The disclosure needs to outline the benefits covered and must be delivered by specific deadlines, such as the federal income tax return due date.

Failing to comply can lead to hefty fines: $500 for the first violation, $1,000 for the second, and $3,000 for any additional violations. To avoid these penalties, ensure that all disclosures are accurate, submitted on time, and easily accessible to employees. Following these guidelines not only helps you stay compliant but also promotes transparency and builds trust within your team.

What are the best ways for Illinois employers to provide health plan disclosures to employees without regular internet or email access?

Employers in Illinois can share health plan details with employees who lack consistent internet or email access by using alternative communication methods. These could include handing out printed materials, organizing in-person meetings, or even making phone calls. Using visual aids like infographics can also break down complicated health plan information into more digestible pieces.

To make sure employees actually receive these disclosures, employers should rely on dependable delivery methods such as physical mail or personally delivered packets. Keeping employee contact information current is also key to successful communication. By combining these approaches, employers can ensure every employee understands their health plan options, even without access to digital tools.

How can insurance brokers help Illinois businesses comply with the Consumer Coverage Disclosure Act?

Insurance brokers are key allies for Illinois businesses when it comes to adhering to the Consumer Coverage Disclosure Act. They guide employers through the disclosure requirements for group health insurance plans, making sure coverage aligns with Illinois’ list of essential health benefits. This not only helps companies fulfill their legal responsibilities but also fosters transparency with employees.

By untangling the complexities of regulations, brokers make the compliance process far less daunting. They help businesses avoid penalties and ensure that employees receive clear, accurate details about their health coverage options. This combination of expertise and support keeps businesses on track and employees well-informed.

Related posts

• Group Health Insurance: Guide for Illinois Employers
• Illinois Prior Authorization Reform Act Overview
• Illinois ACA Updates: H.B. 579 and H.B. 2296