Note: Effective for plan years beginning on or after September 23, 2012; applies to both grandfathered and non-grandfathered plans.
The ACA mandates the use of a disclosure tool call the Summary of Benefits and Coverage (SBC). The SBC is meant to help consumers better understand and compare coverage options available to them in both the individual and group health insurance markets. A uniform glossary has also been developed by the Departments to accompany the SBC.
The SBC is required for the following plans:
Individual medical policies
Insured group medical plans
Self-funded group medical plans
Most health reimbursement arrangements (HRA)
The SBC isnotrequired for the following plans:
Stand-alone dental or vision plans
Health reimbursement arrangements (HRA) that are excepted from HIPAA.
Other plans that are considered “excepted benefits” under HIPAA.
The Departments have created templates that must be used in the creation of the SBC. Instructions accompanying the template are very specific to how the SBC must be laid-out, the content required, what verbiage can be used, what is/is not allowed to be modified and what color the font must be. The template and instructions can be found at:http://www.dol.gov/ebsa/healthreform/regulations/summaryofbenefits.html
In addition, the Departments have also outlined who must provide the SBC and Uniform Glossary, who is entitled to receive an SBC and Uniform Glossary, when the SBC and Uniform Glossary must be provided, and the form and manner of how the SBC and Uniform Glossary must be provided.
Lastly, the SBC and Uniform Glossary must be provided in a culturally and linguistically appropriate manner. The rules for determining whether a language other than English must be made available are the same as the rules for Internal Claims and Appeals and External Review.
Currently the Departments are re-writing the SBC template, the Uniform Glossary and instructions. Written comments will be accepted until March 28, 2016.The new template will be effective for plan yearsbeginning on or after January 1, 2017.This means that for those plans beginning January 1, 2017, the new templates need to be created and ready to distribute during their open enrollment at the end of 2016.
There are a number of situations that prompt the distribution of the SBC, those are:
At Initial Enrollment:The SBC for each plan option offered for which the participant or beneficiary is eligible must be provided as part of any written application materials that are distributed by the plan for enrollment.
For this purpose, written application materials include any forms or requests for information, in paper form or through a website or email that must be completed for enrollment. If your plan does not distribute written application materials for enrollment, the SBC must be distributed no later than the first date the participant is eligible to enroll in coverage for the participant and any beneficiaries.
In the event that there is any change to the information required to be in the SBC before the first day of coverage (e.g. prior to the end of the plan’s waiting period), the plan must update and provide a current SBC to a participant or beneficiary as soon as practicable following the first day of coverage but in no event later than seven business days following the first day of coverage.
At Open Enrollment/Renewal:The SBC must be included with open enrollment materials. The regulations state that if participants or beneficiaries are required to re-enroll every year for coverage, the new SBC must be provided no later than the date the open enrollment materials are handed out. If the enrollment is automatic (evergreen election), the SBC must be provided no later than 30 days prior to the first day of the new plan year (e.g. renewal).
With respect to a group health plan that offers multiple beneﬁt packages, the plan is required to provide a new SBC automatically upon renewal only with respect to the beneﬁt package in which a participant or beneﬁciary is enrolled. If the participant or beneficiary request the SBC on the other benefit packages, the SBC must be provided within seven business days following the receipt of the request.
At Special Enrollment:The SBC must be provided to special enrollees (employees and dependents with the right to enroll in coverage midyear upon specified circumstances) within 90 days after enrollment pursuant to a special enrollment right.
Upon Request:SBCs are required to be provided to participants and beneﬁciaries upon request, as soon as practicable, but no later than seven business days following the receipt of a request.
Availability of Summary Health Information
As an employee, the health benefits available to you represent a significant component of your compensation package. They also provide important protection for you and your family in the case of illness or injury.
Your plan offers a series of health coverage options. Choosing a health coverage option is an important decision. To help you make an informed choice, your plan makes available a Summary of Benefits and Coverage (SBC), which summarizes important information about any health coverage option in a standard format, to help you compare across options.
The SBC is available on the web at:www.website.com/SBC. A paper copy is also available, free of charge, by calling 1-XXX-XXX-XXXX (a toll-free number).
The ﬁnal rule requires group health plans to make the Uniform Glossary available upon request within seven business days. This requirement may be satisﬁed by providing an internet address where an individual may review and obtain the Uniform Glossary.