A Summary of Benefits and Coverage (SBC) is an easy-to-read summary of health coverage that allows an individual to compare costs and coverages among health plans in order to make an informed decision about benefits. The SBC describes a health plan’s costs, benefits, coverage, services and other features such as cost-sharing and exclusions from coverage. All health plans are required to use the same format for the SBC to ensure consumers can compare like information
The Centers for Medicare & Medicaid Services sets the standards for what the SBC must include. If your plan is in an open enrollment period, consider including SBCs as part of the information provided to employees.
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Applicable Large Employers (ALE) with 50 or more full-time employees must provide affordable, minimum value coverage to full-time employees and their dependents or be subject to a tax penalty. Some employers may consider themselves “small employers,” but may actually be ALEs because they are part of a controlled group.
The Affordable Care Act requires virtually all Americans to have health insurance coverage or pay a tax penalty. The requirement to have health insurance is referred to as the “individual mandate” and the tax penalty is referred to as the “shared responsibility payment.” Starting with the 2019 plan year, the shared responsibility payment was reduced to $0, thereby effectively eliminating the individual mandate.
Under the Affordable Care Act, an applicable large employer must offer its full-time employees affordable minimum essential health coverage or pay a penalty. A full-time employee is someone who works an average of 30 hours a week (130 hours a month).
The U.S. Departments of Labor, Health and Human Services and Treasury jointly issued Frequently Asked Questions about the Summary of Benefits and Coverage (SBC) required under the Affordable Care Act (ACA). The ACA requires group health plans and health insurance issuers to provide an SBC document that accurately describes the benefits and coverage under the applicable plan or coverage.
The Affordable Care Act required all states to create a marketplace through which their residents could purchase health coverage. Some states elected to offer coverage through the federal-facilitated Marketplace, known as Healthcare.gov. Other states created their own state-based marketplaces giving residents the opportunity to purchase coverage.
The Internal Revenue Service released a Chief Counsel Memorandum advising that the Affordable Care Act’s Employer Shared Responsibility Payment (ESRP) does not have a statute of limitations. This guidance means the IRS may assess an ESRP penalty on an employer at any time and for any tax year. This is not welcome news for employers.
The Patient Protection and Affordable Care Act (ACA) established a rule that starting January 1, 2011, distributions from health care flexible spending account plans and health reimbursement accounts could reimburse the cost of over-the-counter medicines or drugs only if the items were purchased with a prescription. The Coronavirus Aid, Relief and Economic Security Act (CARES Act) signed into law last week removes the prescription requirement for OTC reimbursements and makes additional items eligible for reimbursement.
Even in the midst of the COVID-19 pandemic, employers must remember their Affordable Care Act (ACA) obligations. Form 1094-B/C must be transmitted to the IRS by March 31, 2020.
Employers are facing difficult decisions as COVID-19 impacts business operations. Some employers are considering the possibility of office closings, workforce reductions, temporary layoffs or furloughs. Employers may also be considering reducing the work hours of employees. When decisions are being made, employers must remember to take into account health coverage requirements under the Affordable Care Act (ACA).
