The three agencies responsible for the implementation of health care reform- the Departments of Labor, Health and Human Services (HHS), and the Treasury (the Departments)- issued a set of frequently asked questions about the new Summary of Benefits and Coverage (SBC) requirements. The FAQs are intended to enhance understanding of the rules. Please refer to our earlier blog post for general background on the SBC.
The new FAQs clarify some aspects of the final SBC regulations. Specifically,
- The SBC must be provided beginning on the first day of the open enrollment period that begins on or after September 23, 2012. If there is no open enrollment period, the SBC must be provided beginning on the first day of the first plan year that begins on or after September 23, 2012.
- During the first year the SBC is required, the Departments will not penalize plans or issuers that are working diligently and in good faith to provide the SBC consistent with the final rules.
- Information for different coverage tiers and/or coverage selections may be combined in one SBC, provided the information is understandable. If self-only coverage is combined with other tiers, coverage examples should use the self-only tier and explain that it applies to self-only coverage.
- A plan or insurer may contract-out the obligation to prepare and distribute the SBC.
- An SBC has to be given to qualified beneficiaries receiving COBRA continuation coverage.
- For a group health plan, the SBC has to be provided upon application (by the first day of the enrollment opportunity); by the first day of coverage if there are changes to coverage; to special enrollees within 90 days of enrollment; within 30 days of the start of a new plan year if an employee does not need to make an affirmative election each open enrollment period; and within 7 days of a request.
- The SBC must provide information about language assistance services in certain counties.
- When the SBC has to be "provided" within 7 days of request, it has to be sent, not received, within that 7 day period.
- A group health plan may distribute an SBC electronically to participants and beneficiaries who are eligible but not enrolled for coverage if:
- The format is readily accessible (such as in an html, MS Word, or pdf format);
- The SBC is provided in paper form free of charge upon request; and
- If the SBC is provided via an Internet posting (including on the HHS web portal), the plan timely advises that the SBC is available on the Internet and provides the Internet address. Plans and issuers may make this disclosure (sometimes referred to as the "e-card" or "postcard" requirement) by email.
- A group health plan may distribute an SBC electronically to participants and beneficiaries who are enrolled for coverage if DOL regulations are followed and if the individual has the opportunity to opt out of the electronic distribution.
The FAQs also give employers some leeway on technical formatting issues for the SBC.
The SBC requirement is intended to help employees better understand their health plan benefits and options. Employees will become accustomed to evaluating coverage based on the SBC. BAS can work with your plan and insurer to meet the SBC distribution requirements. For more information, please contact sales@BASusa.com.
