Employee Benefits Compliance, Summary of Benefits and Coverage

Proposed Rules Shorten SBCs (to 2-1/2 pages!) and Include a New Example

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final rule - insurance

WHAT: On December 22, 2014, the Departments of Health and Human Services, Labor, and the Treasury (collectively, the Departments) issued proposed regulations regarding the summary of benefits and coverage (SBC) and uniform glossary for group health plans and health insurance issuers (both group and individual policies).  The new rules would make the following changes:

  • Shorten the SBC (to 2-½  pages rather than four)
  • Add one new example to the SBC (broken foot and Emergency Room visit)
  • Add several new definitions to the Uniform Glossary
  • Reduce unnecessary duplication in the provision of the SBC

WHEN: The proposed changes (which amend the final regulations published on February 14, 2012) will affect SBCs and uniform glossaries for plan years that begin on or after September 1, 2015.

SBC Shortened from 4 Pages to 2-½

The sample completed template for a standard group health plan has been shortened from four double-sided pages (the maximum allowed by the law itself) to only two and a half pages.  (Still double-sided, so it’s five pages rather than eight.)  The proposed rule also would remove information that is not required by statute and that potential enrollees have said (in consumer testing) is not as useful to them when they are reading SBCs to decide which coverage to choose.

New SBC Coverage Example

The Departments are authorized to develop up to six coverage examples for the SBC .  So far they have included two:  1) “having a baby (normal delivery)” and 2) “managing diabetes type 2 (for a well-controlled condition).”  The proposed rules add a third example of a simple foot fracture with emergency room visit.  They also include proposed updates to the underlying pricing data so the examples would more accurately reflect the true prices and allowed charges in the real orld.

Content Changes to SBC and Uniform Glossary 

The proposed rules also would make a number of changes to the content of the SBC and uniform glossary to reflect the private insurance market reforms under the Affordable Care Act to provide more useful information to consumers.

  • SBC: Remove references to annual limits for essential health benefits and preexisting condition exclusions, since these no longer apply.
  • SBC: Require SBCs to state whether plans provide  minimum essential coverage and/or minimum value (cannot just include this information in a cover letter); and revise the disclosures relating to continuation of coverage.
  • Uniform Glossary: Revise a few of the existing definitions and add new definitions, such as “claim,” “screening,” “referral,” and “specialty drug.”
  • Uniform Glossary: Revise some key terms that are relevant under the ACA, such as “individual responsibility requirement,” “minimum value,” and “cost-sharing reductions.”
  • SBC for qualified health plans (QHPs) in the individual market:  Will be required to disclose information related to coverage of abortion.
  • Clarify that the SBC requirements do not apply to Medicare Advantage plans.

Neither the current nor proposed regulations require the SBC to state the premium amount, although plans can include this information at their discretion.

Provisions to Reduce Unnecessary Duplication The proposed regulations also clarify prior guidance, help prevent unnecessary duplication in three situations:

  • Where a group health plan has a binding contract with another party who agrees to assume responsibility to provide the SBC.
  • Where a group health plan uses two or more insurance products from different issuers to insure benefits under a single group health plan.
  • Where the SBC for student health insurance coverage is provided by another party (such as an institution of higher education).

Links to Guidance

 

Additional Documents on which Departments Request Public Comment

In addition to the links above (for those of you who have spare time and would like to spend some of it reading SBC-related documents), the Departments also request public comments on the following documents, which are available at http://cciio.cms.gov  and www.dol.gov/ebsa/healthreform.

  • SBC template.
  • Sample completed SBC. This document was completed using information for sample group health coverage and provides a general illustration of a completed SBC.
  • Instructions. For assistance in completing the SBC template, separate instructions are available for group health coverage and for individual health insurance coverage.
  • Why This Matters language. The SBC instructions include language that must be used when completing the “Why This Matters” column on the first page of the SBC template.
  • Coverage examples. The Federal Register Notice, together with information provided in Microsoft Excel format by HHS at http://cciio.cms.gov (and accessible via hyperlink from www.dol.gov/ebsa/healthreform), provides all the information necessary to perform the coverage example calculations.
  • Uniform glossary. This document contains consumer-friendly definitions reflecting important insurance or medical concepts and key terms that are relevant in the context of the Affordable Care Act.

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