The Departments of Labor, Treasury and Health and Human Services issued guidance on the Summary of Benefits and Coverage (SBC) that must be issued by group health plans and health insurance issuers with respect to coverage beginning on or after January 1, 2014 and before January 1, 2015. The SBC is a new documentation requirement under health care reform to allow plan participants to better understand the coverage they have and give them the opportunity to compare their coverage against different plan options.
The new guidance takes the form of Frequently Asked Questions, along with a new template document.
The only change to the prior SBC template is the addition of a statement of whether the plan provides minimum essential coverage and whether the plan meets the minimum value requirements (the plan’s share of the total allowed costs of benefits is not less than 60 percent of such costs).
If a plan would find it unduly burdensome to use the new SBC template for the 2014 plan year, the government provides some relief and will not take enforcement action against the plan so long as the plan provides the SBC along with a cover letter or disclosure statement stating whether the plan does or does not provide minimum essential coverage and minimum value.
Distributing the SBC is an ongoing requirement, and failure to distribute the SBC can subject the plan to a penalty of up to $1,000 for each failure.