Employee Benefits Compliance, Laws, Regulations & FAQs, Summary of Benefits and Coverage

Departments Issue FAQs Part VIII on implementation of the Summary of Benefits and Coverage (SBC) Provisions of the ACA

On March 19, 2012, HHS, DOL and Treasury (the Departments) issued FAQs Part VIII on implementation of the Summary of Benefits and Coverage (SBC) provisions of the ACA.   The 24 Q&As in FAQs Part VIII answer some of the questions that have been raised to date, and the Departments intend to issue additional FAQs as needed.  The highlights of these FAQs are:
  • The generally applicable September 23 effective date remains firm.  No extension is provided.
  • Plans and issuers are not required to provide a separate SBC for each coverage tier. Information for different coverage tiers under one benefit option may be combined in one SBC, provided the appearance is understandable.
  • A plan or issuer with a carve-out arrangement with a PBM or other organization can delegate to the organization the duty to provide the SBC, but the plan or issuer remains responsible if the plan or issuer knows the SBC hasn’t been completed or provided properly.
  • The SBC for the health plan can also inclulde information on benefit add-on programs such as a health FSA, HSA, HRA, wellness program or similar benefit programs. 
  • COBRA qualified beneficiaries are entitled to an SBC on the same terms and conditions as similarly-situated non-COBRA plan participants.  The COBRA qualifying event does not itself trigger the obligation to provide an SBC, but at the next open enrollment an SBC would be required.
  • The FAQs reiterate the electronic distribution standard in the SBC final rule:  electronic distribution of the SBC by issuers or plans to plan participants must meet the safe harbor in the DOL’s electronic distribution rules.  That is, SBCs can be provided electronically to those plan participants who can access the employer’s Intranet as an integral part of their duties.  Other participants can affirmatively elect to receive the SBC electronically.
  • Model language is provided for postcards or emails about evergreen website postings of the SBC.  Plans and issuers can tailor this model language.  The model language advises recipients of the availability of the SBC that describes their health coverage, gives the website where the SBC can be accessed, and also gives the toll-free phone number where a paper copy of the SBC can be requested free of charge.
  • The SBC cannot simply cross-reference to a Summary Plan Description or other document for content elements in the SBC.
  • The SBC is not required to include a statement as to the health plan’s grandfathered status, but can, if desired.  If so, it should be at the end of the SBC.
  • Written translations of the SBC template and Uniform Glossary in Spanish, Chinese, Tagalog and Navajo will be available at http://cciio.cms.gov/programs/consumer/summaryandglossary/index.html
  • A plan or issuer can voluntarily add premium information to the SBC, although it is not required.  If it is added, it should be at the end of the SBC form.
  • The Departments do not anticipate making significant changes in the SBC in 2014.  As noted in the final regulations, the changes that will be made in 2014 include adding a minimum value statement and a minimum essential coverage statement, and the Departments intend to add additional coverage examples.