Beginning January 1, 2021, plan sponsors should use the updated Summary of Benefits & Coverage (SBC), and related materials. The SBC is mandated under the Affordable Care Act (ACA) and is a four-page document template that all plans must provide to participants. In most cases, the insurance carrier or Third-Party Administrator (TPA) will create these on behalf of the plan sponsor. But for self-funded plans, including some Health Reimbursement Arrangements, plan sponsors themselves may be responsible. For these details, see the Leavitt Group articles on SBC.
Changes to the New Templates
Minimum Essential Coverage
- Revised to reflect the elimination of the individual mandate payment.
- Prior templates state that individuals without Minimum Essential Coverage (MEC) may have to make a tax payment. That section now indicates that individuals eligible for certain types of MEC may not be eligible for a premium tax credit.
- Now summarizes the types of coverage that may constitute MEC.
- Section indicating whether the plan provides Minimum Value now includes “not applicable” in addition to yes and no as an answer option.
- Now states that minimum value is not relevant for individual coverage.
- Instructions for completing the coverage examples now include guidance on the interaction between the cost-sharing amount and out-of-pocket maximum when applying permitted rounding rules.
- An HHS “crosswalk” document details the updates made to the coverage examples calculator and scenario descriptions.
- References to the individual mandate have been eliminated from the uniform glossary.
Plan sponsors obligated to complete and distribute the SBC themselves (self-funded and account based plans) should familiarize themselves with these changes. The latest versions of the SBC is released in final form. Any changes relate to the elimination of the individual mandate payment. Unfortunately, the new materials have not cleared up confusion for account-based plans or whether “good faith” compliance standards will be accepted as they were in the past.
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For complete details on the new SBC and its related materials, see:
The HHS webpage, at: https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/index.html
The DOL webpage, at: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/summary-of-benefits