As open enrollment approaches, employers should remember the new Summary of Benefits and Coverage (SBC) requirement under health care reform. Group health plans must provide information to participants through an SBC to allow them to better understand the plan coverage they have, and to give them the opportunity to compare their coverage against different plan options.
The SBC is in addition to, and not in place of, the plan's summary plan description (SPD). Both the SBC and the SPD must be distributed to plan participants.
While SPDs can be long and robust, the SBC is limited to 4 pages, front and back, plus a separate uniform glossary of important health care terms. The SBC must follow a specific format to ensure that it is consistent across all insurers and health plans. There is very little flexibility for stylistic customization. The SBC serves as a supplement to the SPD.
The SBC must include:
- Uniform definitions of standard insurance and medical terms;
- A description of coverage;
- Exceptions, reductions, and limitations on coverage;
- Cost-sharing provisions, including deductibles, coinsurance, and copayments;
- Renewability and continuation of coverage provisions;
- Coverage examples explaining common benefit scenarios with hypothetical situations;
- Beginning January 1, 2014, a statement as to whether the plan provides affordable minimum essential coverage;
- A statement that the SBC is only a summary and the plan documents should be consulted;
- Contact information, including a Web site;
- Directions for obtaining a list of network providers, if applicable;
- Directions for obtaining information about the prescription drug formulary, if applicable;
- An Internet address for accessing the uniform glossary; and
- Premium information, among other things.
Failure to distribute the SBC can subject the plan to a penalty of up to $1,000 for each failure. An employer will not be penalized in the first year compliance is required if the employer works diligently and in good faith to satisfy the SBC requirements.
BAS can assist employers with distribution of the SBC as part of the open enrollment package. For more information, please contact PR@BASusa.com.