This is from Steven Witt at Fisher & Phillips:
... ERISA requires employers to provide a Summary Plan Description (SPD) to plan participants and newly eligible employees. Among other things, SPDs are required to describe plan eligibility provisions and enrollment requirements. Accordingly, if you are modifying your eligibility rules for purposes of the Employer Mandate, you should first update any existing documents (SPDs, employee handbooks, open enrollment handouts, etc.) that contain eligibility language which now explicitly conflicts with the changes.
Even if old SPDs or other documents do not have conflicting language, you still should clearly lay out any new eligibility provisions in writing. In addition to complying with ERISA, clearly laying out these new eligibility provisions should help you reduce potential conflicts with employees and risks of litigation, both from employees and the IRS, over who was offered coverage, and who was not.
For example, employers with fully-insured health plans may have relied in the past solely on documentation received from their insurance carriers or third-party plan administrators and may not have created a separate SPD with clearly defined eligibility provisions. But such plan documents often do not contain specific eligibility language beyond, perhaps, a minimum hours-per-month threshold.
Leaving existing plan documents and other materials (e.g., employee handbooks) to define health insurance eligibility with something vague like “full-time employees are those employees who regularly work 30 or more hours per week,” is only inviting trouble. You will no doubt have employees (with attorneys) who could make plausible arguments that they “regularly” work 30 or more hours a week and can point to your existing written documents as evidence they should have been offered health insurance. Without clearly setting out new eligibility rules, it will be a more difficult battle to defend your eligibility determinations.
On the other hand, if such employees attempt to claim that they were unfairly denied health insurance benefits, you will be on much stronger footing to defend your classifications if you can point to written documentation outlining details such as a) date ranges used for measurement periods, administrative periods, and stability periods; b) waiting periods for new employees and newly-eligible employees; and c) how to treat employees in special circumstances, such as those who are promoted from a part-time position to a full-time position, those on a leave of absence, or those who are rehired after an earlier termination. ...