In April 2013, new guidance was issued on the Summary of Benefits and Coverage (SBC) and Glossary in the form of seven answers to Frequently Asked Questions (FAQs), a new template, and a new sample completed SBC. The new guidance made few changes to prior guidance on SBCs. The only change to the new template is the addition of a statement whether or not the coverage provides Minimum Essential Coverage and whether or not the coverage meets Minimum Value (i.e., that the plan pays at least 60% of the total allowed cost of benefits under the plan).
The SBC is a new standardized four-page document required under PPACA (actually eight pages, since each page is two-sided). The SBC is intended to provide plan participants and potential enrollees with clear, consistent and comparable information about health benefits and coverage under different plans and policies to help them compare different coverage options.
All plans are required to comply with the SBC provisions of health care reform including:
- grandfathered and non-grandfathered plans
- large and small plans
- insured and self-funded plans
- for profit and not-for-profit plans
The effective date for SBCs began with plan years on or after September 23, 2012. Health insurers and group health plans (employers) are required to provide participants with the SBC and Uniform Glossary at several key times:
- as part of initial application materials for enrollment (and again by the first day of coverage, if there are changes to the information in the SBC between application and enrollment);
- as part of annual enrollment materials (or, if no annual enrollment is held, the SBC must be provided at least 30 days prior to the new plan or policy year, with some flexibility for an insured plan in the event of a late insurance policy issuance or renewal);
- to special enrollees, within 90 days of their special enrollment;
- at any time upon request, within seven business days of the request; and
- at least 60 days prior to the effective date of any mid-year material change to the benefits/coverage described in the SBC
Carriers are preparing the SBC for insured plans, although most require the plan sponsors to actually distribute the SBCs to plan participants. Self funded plans must prepare the SBC but many Third Party Administrators are preparing them for their self funded clients for a fee.
Most of the prior guidance remains unchanged, with a few exceptions.
- The new template is to be used for coverage beginning on or after January 1, 2014 and before January 1, 2015.
- The only change to the new template is the addition of a statement whether or not the coverage provides Minimum Essential Coverage and whether or not the coverage meets Minimum Value (i.e., that the plan pays at least 60% of the total allowed cost of benefits under the plan).
- For plans that have already started to prepare the 2014 SBC and did not include the new changes, the prior template may be used as long as the plan includes a cover letter stating whether or not the coverage provides Minimum Essential Coverage and whether or not the coverage meets Minimum Value (plan pays at least 60% of the total allowed cost of benefits under the plan).
- Enforcement relief for the first year is restated: Our approach to implementation is, and will continue to be, marked by an emphasis on assisting (rather than imposing penalties on) plans, issuers and others that are working diligently and in good faith to understand and come into compliance with the new law.
- Notably absent from template changes are:
- No statement that there are no annual limits allowed on all Essential Health Benefits
- No additional coverage examples