Delay of SBC Effective Date: Welcome news for group health plans and insurers

The three government agencies responsible for the implementation of health care reform (HHS, DOL and Treasury) jointly issued FAQs Thursday addressing the ACA-required Summary of Benefits and Coverage Explanation (SBC). Under the ACA, insurers and group health plans are required to provide an SBC, in easy to understand language, to plan participants, beneficiaries, and other individuals who ask about plan coverage. A plan (or its administrator) that willfully fails to provide an SBC may be fined up to $1,000 for each failure. Proposed guidance issued in August provided a template for plans to use to create an SBC, along with a terms glossary, and set a March 23, 2012 effective date for compliance.

Yesterday's guidance pushes off the effective date for distributing an SBC. The guidance provides welcome news for plan sponsors and health insurers by confirming that they will not be required to provide an SBC until after final regulations are issued. While no specific time frame for the final regulations was given, the guidance states that plans and insurers will be offered "sufficient time to comply" with the to-be-provided final rules. The FAQs (which also provide guidance on mental health parity requirements) can be found at http://www.dol.gov/ebsa/faqs/faq-aca7.html.

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