On June 16, 2015, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) published final regulations on the summary of benefits and coverage (SBC) and uniform glossary requirement under the Affordable Care Act (ACA). These regulations generally finalize the December 2014 proposed regulations, with the following minor changes, explained below in this article:
- Clarify when and how a plan or issuer must provide an SBC;
- Add to the rules to prevent unnecessary duplication in providing the SBC;
- Streamline the SBC template, but also add certain information that will be useful to consumers; and
- Make permanent some of the SBC enforcement safe harbors and transitions.
Additionally, for individual policies sold through the Marketplace, the final regulations also require that health insurance issuers must notify consumers at the time of enrollment if the abortion services available under the policy are the type for which public funding (i.e., subsidies) are prohibited.
For group health plans, the final regulations generally apply to coverage that begins on or after September 1, 2015. For individual policies the requirements apply to coverage that begins on or after January 1, 2016.
Providing the SBC
Health insurance issuers must provide online access to a copy of the group certificate of coverage or individual coverage policy for each plan. These documents must be made publicly available to all potential consumers (individuals and employers) prior to when they apply for individual or group coverage, so they are clearly informed about what a plan will and will not offer. The final regulations clarify how an issuer can satisfy the requirement to provide an SBC in the following situations:
- The issuer provides the SBC upon request before application for coverage—If an entity or individual requests a copy of the SBC before applying for coverage and the issuer provides the SBC at that time, the requirement to provide an SBC upon application is deemed satisfied, and the issuer is not required to automatically provide another SBC upon application to the same entity or individual, as long as there has been no change to the information required to be in the SBC. However, if there has been a change in the required information, a new SBC that includes the changed information must be provided upon application or as soon as practicable following receipt of the application, but in no event later than seven business days following receipt of the application.
- The terms of coverage are not finalized—For group coverage, if the plan sponsor has filed an application and is negotiating coverage terms, and the information required to be in the SBC changes during the negotiations, an updated SBC is not required to be provided to the plan or its sponsor (unless requested) until the first day of coverage. The updated SBC provided at that time must reflect the final coverage terms under the policy, certificate, or contract of insurance that was purchased.
The 2012 regulations provide three special rules to avoid unnecessary duplication when providing the SBC. For example, the 2012 regulations provide that if either the plan or the issuer provides the SBC to a participant or beneficiary in accordance with the timing and content requirements, both will have satisfied their SBC obligations. The final regulations retain these rules, and also add new rules to prevent unnecessary duplication where:
- A group health plan has a binding contractual arrangement where another party assumes responsibility to provide the SBC;
- A group health plan uses two or more insurance products provided by separate issuers to insure benefits with respect to a single group health plan; and
- The SBC for student health insurance coverage is provided by another party (such as an institution of higher education).
Formatting and Content Changes
The ACA limits the length of the SBC to four pages, but the 2012 regulations interpret this requirement to be four double-sided pages. The final regulations retain this interpretation, allowing the SBC to be four double-sided pages. However, some plans and issuers have expressed concern regarding the difficulty of including all of the required information in four pages (even double-sided pages). The final regulations provide that when the Departments finalize the new template and associated documents (separate from the final regulations), they will address specific issues related to fitting all the required information into the four-page template.
The final regulations also clarify that all plans and issuers must include the following on the SBC:
- Contact information for questions; and
- A Web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained.
The following content changes were addressed in proposed regulations but not in the June 12th final regulations.
The final regulations do not address the following content changes that were proposed in proposed regulations, but these will likely be addressed when the new SBC template, uniform glossary and associated documents are finalized. Many of these changes relate to the ACA’s insurance market reforms.
- References to annual limits for essential health benefits and pre-existing condition exclusions would be removed.
- Disclosures relating to continuation of coverage, minimum essential coverage and minimum value would be revised to provide more useful information to consumers, including those shopping in the individual market.