One of the new requirements under the Patient Protection and Affordable Care Act is that group health plan participants must receive a Summary of Benefits and Coverage (SBC). The SBC is a concise summary (limited to four pages) of the key benefits and coverages provided through the health plan, the costs to the participant, lists of excluded services, and other significant conditions or limitations.
On February 14, 2012, final rules regarding the SBC requirement were published in the Federal Register. Under the final rules, the SBC must be provided beginning on the first day of the first open enrollment period that begins on or after September 23, 2012. For plans that do not have an open enrollment period, the SBC must be provided beginning on the first day of the first plan year that begins on or after September 23, 2012.
In an effort to clarify ambiguities in the final rule, on March 19, 2012, the Departments of Labor, Health and Human Services, and the Treasury (the “Departments”), released 24 new Frequently Asked Questions regarding the SBC requirement. The FAQs provide valuable information for insurers and plan sponsors relating to the SBC requirement, including:
- During the first year of applicability, the Departments will not impose penalties on plans and issuers that are working diligently and in good faith to provide the required SBC content in an appearance that is consistent with the final regulations.
- When information relating to multiple coverage tiers is provided in one SBC, the coverage examples should be completed using the cost sharing (e.g. deductible and out-of-pocket limits) for the self-only coverage tier.
- If a group health plan contracts with a third party to distribute the SBC to participants, the plan will not be subject to any enforcement action by the Departments, even if the third-party fails to provide a timely or complete SBC, provided the plan monitors performance under the contract and takes corrective actions upon knowledge of a violation.
- An SBC may be provided electronically to both eligible individuals that are not yet enrolled, as well as to participants covered under the plan.
Takeaway: Group health plan insurers and plan sponsors should review the newly released FAQs as they begin to prepare for the new SBC requirements.