Just what is this “Summary of Benefits & Coverage” that I am required to submit to my employees come September?

The Affordable Care Act (ACA) requires all group health plans, including grandfathered plans and self-insured plans, to provide participants and beneficiaries a summary of benefits and coverage (SBC). The effective date for compliance with the SBC requirements under the ACA was delayed pending further guidance (proposed regulations had been issued in August 2011). The Departments of Labor, Treasury and Health and Human Services (the Departments) issued final rules regarding these provisions which will take effect beginning in September 2012.

Who Must Provide an SBC?

For fully-insured plans, both the carrier and the plan administrator (typically the employer) are responsible for providing the SBC to participants and beneficiaries. The final regulations provide that as long as either one of them provides a complete SBC in a timely manner, the requirement will be deemed satisfied for the other party. Employers should reach out to their carriers to discuss who will take on this responsibility. For self-insured plans, the plan administrator is responsible to provide the SBC and employers should contact their third-party administrator for assistance. The final regulations clarify that a single SBC may be provided to a participant and any beneficiaries at the participant’s last known address. If a beneficiary’s last known address is different than the participant’s, a separate SBC must be furnished to such address.

What is Required to be in the SBC?

• The following information must be included in the SBC:
• Uniform definition of standard insurance terms and medical terms;
• Description of the coverage, including cost sharing for each category of benefits;
• Exceptions, reductions and limitations of coverage;
• Cost sharing provisions including deductibles, coinsurance and copay obligations;
• Renewability and continuation of coverage provisions;
• Coverage examples;
• Statement that the SBC is only a summary and that the plan document, policy or certificate of insurance should be consulted;
• Contact information for questions and to obtain the plan document, policy or certificate of insurance;
• Internet address to obtain a list of network providers;
• If the plan has a prescription drug formulary, an internet address to obtain information on prescription drug coverage; and
• Internet address to review the uniform glossary, and a statement that paper copies are available, as well as contact information for how to get them.

Helpful Links

Compliance Guide: www.dol.gov/ebsa/pdf/SBCguidance.pdf

Summary of Benefits and Coverage Template: www.dol.gov/ebsa/pdf/SBCtemplate.pdf

Instructions for Completing the SBC – Group Plans: www.dol.gov/ebsa/pdf/SBCInstructionsGroup.pdf

Uniform Glossary of Coverage and Medical Terms: www.dol.gov/ebsa/pdf/SBCUniformGlossary.pdf