[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR2520.104b-3]

[Page 418-420]
 
                             TITLE 29--LABOR
 
CHAPTER XXV--PENSION AND WELFARE BENEFITS ADMINISTRATION, DEPARTMENT OF 
                                  LABOR
 
PART 2520--RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE--Table of Contents
 
                   Subpart F--Disclosure Requirements
 
Sec. 2520.104b-3  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 an 
amendment 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

[[Page 419]]

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rescinded or otherwise does not take effect.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 Secs. 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 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) Alternative requirements for plans subject to the alternative 
ERISA Notice requirements. See Sec. 2520.104a-3;

[[Page 420]]

Sec. 2520.104b-2 and Sec. 2520.104-5 or 2520.104-6.
    (g) Filing objection for all other plans which previously filed and 
disclosed the summary plan description. See Sec. 2520.104a-3.

(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]