The Affordable Care Act requires group health plans and health insurers to provide a Uniform Summary of Benefits and Coverage (SBC) to plan participants, beneficiaries and certain individuals who inquire about plan coverage. The SBC is intended to help individuals easily compare health plans, better understand their health coverage options, and be ready for the health care exchange marketplace.
Format
The SBC does not replace the plan's summary plan description. It is a supplement to the SPD, as the SBC is much shorter than a typical SPD. According to the Affordable Care Act, the SBC must be limited to 4 pages, front and back, plus a separate uniform glossary of important health care terms.
It is intended that the SBC will be the same stylistically across insurers and plans. Health care reform guidance provides a format for the SBC, with specific content, examples, order and layout. There is very little flexibility for customization, other than specific plan design features. Specifically, the SBC includes:
- 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
- Premium information
Linguistics
If the plan is in a county of the United States where at least 10% of the population is not literate in English, but is literate in a particular non-English language, the SBC has to notify individuals of language assistance services.
Plan Changes
If the plan changes and the change is not reflected in the SBC, notice of the change must be provided to individuals at least 60 days before the change takes effect.
Distribution
The SBC distribution requirement applies to plan years and enrollment periods beginning on and after September 23, 2012. The SBC must be distributed with the first open enrollment period beginning on or after September 23, 2012 and with each open enrollment period thereafter. For new enrollees, the SBC must be distributed by the first plan year beginning on or after September 23, 2012.
Who is responsible for distributing the SBC depends on the type of plan (insured or self funded) and the arrangement the plan implements with the provider.
In the individual market, the health insurer provides the SBC to the individual. For insured group health plans, the insurer is responsible for providing the SBC to the plan, but the plan is responsible for distributing the SBC to the individual participants. For a self-funded plan, the plan has the ultimate responsibility to prepare and distribute the SBC.
The plan must provide the SBC at various times throughout the year. An SBC must be issued
- On initial enrollment;
- On plan renewal or re-enrollment; and
- Upon request.
At initial enrollment, an SBC for each plan option must be provided to each eligible individual. The SBC may be provided as part of the initial enrollment materials, or as a stand-alone document. Special enrollees who do not enroll when first eligible must receive the SBC within 90 days of enrollment.
Upon renewal/annual enrollment, the SBC must be distributed with or before the annual enrollment materials, or if there are no materials, at least 30 days before the beginning of the plan year. At this time, an individual only has to be provided with the SBC for the plan in which the individual is currently enrolled.
If an individual requests an SBC, it must be provided as soon as practicable, but within 7 business days of the request. An individual may request an SBC for any of the available plan options.
The SBC may be provided electronically, in accordance with the Department of Labor's summary plan description electronic distribution rules. This basically means that the SBC may be distributed electronically if a computer is used as an integral part of the employee's job. If the electronic media is not an integral part of the employee's job, the SBC may still be distributed electronically if the recipient gives consent and if certain other requirements are met. There are also various requirements for distributing the initial SBC electronically. In any case, a free paper copy must be made available upon request.
Penalties
Failure to distribute the SBC as required 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.
For more information or to learn about BAS' SBC distribution services, please contact PR@BASusa.com.
