The Department of Labor (DOL), Department of Health and Human Services (HHS), and Internal Revenue Service (IRS) have issued the final revised template and related materials for the Summary of Benefits and Coverage (SBC). Use of the new materials will be required starting on the first day of the first open enrollment period that begins on or after April 1, 2017 with respect to coverage for plan years beginning on or after that date. Here is a summary of the SBC along with what employers need to know to remain compliant.
What is the Summary of Benefits and Coverage (SBC)?
Under the Affordable Care Act (ACA), health inurance insurers and group health plans are required to provide a written Summary of Benefits and Coverage (SBC) to plan participants during the enrollment process and upon request. The SBC summarizes the key features of the health plan, such as cost sharing provisions, covered benefits, and coverage limitations and exceptions in layman's terms.
The purpose of the SBC is for beneficiaries to compare insurance coverage at a glance, simplifying the process and allowing for an "apples-to-apples" comparison.
When is compliance required?
For calendar-year plans, the revised SBC template would not apply until the 2017 open enrollment period relating to coverage beginning on or after January 1, 2018. For plans and insurers that do not use an annual open enrollment period, the revised materials would be required beginning on the first day of the first plan year that begins on or after April 1, 2017.
This extension should provide plan administrators and insurers sufficient time to implement the changes. The HHS separately issued additional SBC-related FAQs directed at insurers, affecting coverage in the individual market and in the federal Exchange.
What are some of the major changes?
Changes to the content of the SBC include:
Readability has been greatly improved for consumers. This updated version includes more information regarding cost sharing, including enhanced language to explain deductibles and a requirement that plans address individual and overall out-of-pocket limits in the SBC.
- Shortens the SBC template.
- Streamlines the questions on page one.
- Condenses and revises the explanation of rights and adds questions regarding minimum essential coverage and minimum value standards.
Changes to the Uniform Glossary include:
- Expands the size of the glossary.
- Adds over a dozen terms; revises the definitions for nearly two dozen terms; and renames or consolidates some other terms with revisions.
All of the relevant DOL SBC documents, templates, FAQs and, other discussions can be found at: http://www.dol.gov/ebsa/healthreform/regulations/summaryofbenefits.html
A copy of the final template can be found at: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/SBC-Template.pdf