The Employee Benefits Security Administration issued additional guidance on the new Summary of Benefits and Coverage (SBC) that must be distributed beginning September 2012 in accordance with the Affordable Care Act. The SBC is intended to enable consumers to easily understand their health coverage and determine the best health insurance options for themselves and their families. All health plans will provide a Summary of Benefits and Coverage, along with a uniform glossary of terms, to enrollees upon request and before they buy coverage. The SBC must meet specific format requirements, and the Department of Labor released a format SBC as a template for use. Please refer to our prior blog article for a general discussion of the SBC.
The new guidance released last week provides that SBCs may be distributed electronically to participants and beneficiaries in connection with their online enrollment or online renewal of coverage under the plan. SBCs also may be provided electronically to participants and beneficiaries who request an SBC online. In either case, the individual must have the option to receive a paper copy upon request.
The rules require that an SBC be distributed "upon application" and on the "first day of coverage." New guidance provides that for this purpose, a plan must provide the SBC as soon as practicable, but no later than 7 business days after receiving a substantially complete application for health insurance. If a plan sponsor is negotiating coverage terms after an application has been filed and the information in the SBC changes as a result, an updated SBC is not required to be distributed, unless requested, until the first day of coverage.
The SBC must include certain examples of coverage under the plan. New guidance confirms that the government is developing a calculator that plans and issuers can use as a safe harbor for the first year to complete the coverage examples in a streamlined fashion.
Comments to the SBC rules questioned how an SBC would be produced when an employer's plan included multiple coverages across multiple providers. Specifically, issuers wanted to know their obligations to provide an SBC with respect to benefits they do not insure. The guidance states that unless it contracts otherwise, an issuer has no obligation to provide coverage information for benefits that it does not insure. However, health plan administrators are responsible for providing complete SBCs for their plans. The administrator has the option of combining information from various insurers into one SBC. During the first year of applicability, multiple SBCs will be permitted. The plan administrator should take steps to indicate that the plan provides coverage using multiple different insurers and provide contact information.
Revised SBC examples were also released to correct errors in previously issued documents.
BAS can provide assistance coordinating SBCs from multiple insurers and distributing SBCs electronically. For more information, please contact sales@BASusa.com.
