The Affordable Care Act created a new disclosure requirement for employers- the Summary of Benefits and Coverage (SBC). The SBC is an easy-to-read summary of a health plan, and it must follow a particular format. The SBC is intended to allow individuals to easily compare costs and coverage between health plans. It describes important plan features, such as copayments, deductibles, co-insurance and covered services. The SBC must file a specific format and contain certain examples.
The SBC distribution requirement applied to the first open enrollment occurring on or after September 23, 2012. Health insurers and self-insured group health plans must provide an SBC when individuals first enroll for coverage, at the beginning of each new plan year, and within 7 days upon request.
In 2016, the Department of Labor issued new requirements for the SBC, including a new template. The new SBC must be used for open enrollments occurring on or after April 1, 2017. For calendar year plans, the upcoming open enrollment is the first one that must use the new SBC template. An employer who does not distribute an SBC or whose SBC does not meet the DOL’s requirements may be subject to a penalty of $1,087 per failure.
A few of the changes to the SBC template are
- The addition of definitions to the Uniform Glossary
- A description of what an SBC is and where individuals can find more information
- The change in the term “person” to “individual”
- A statement that copays may not be included in out-of-pocked limits
- The removal of the definitions of copyaments and coinsurance
- A discussion of how family members must meet their own individual deductibles before the family deductible is met
- Changes to the important information section.
A copy of the new SBC template can be found by clicking here. Employers should review the SBC provided by insurers or providers for the upcoming open enrollment to make sure it meets the new SBC requirements.
