DOL, HHS and IRS have jointly proposed a revised Summary of Benefits and Coverage (“SBC”) template and related materials. The revised SBC will likely become effective for plan years beginning with the second quarter of 2017.
Background. Under the Affordable Care Act, both insured and self-funded group health plans (including grandfathered plans) must provide a uniform explanation of benefits and coverage to plan participants and beneficiaries, and other individuals eligible to enroll in the plan.
An SBC is also required for individual insurance contracts. Insurers who provide coverage to group health plans are also required to provide SBCs to the plan itself. However, individuals need only receive one SBC, from either the insurer or the group health plan.
SBCs must contain standardized information in a uniform format to help individuals understand the key features of a plan and make more informed decisions when selecting coverage.
Revised SBC Template. The proposed SBC template, which consists of 2½ double-sided pages of prescribed content, is shorter than the current SBC template. Revisions made in the proposed SBC template include:
- Revised “Important Questions” Section. The proposed SBC template adds new questions about deductibles, out-of-pocket limits and network providers, and eliminates certain questions regarding annual limits (which are no longer permitted) and non-covered services (which are addressed elsewhere in the SBC template).
- Revised Disclosures. The proposed SBC template includes the following new disclosures: whether the plan provides minimum essential coverage; if the plan meets minimum value requirements; an explanation of exemptions and premium tax credits; and required specific language to address potential tax consequences (i.e., the individual mandate penalty). Disclosures about continuation coverage and grievance and appeal rights have been revised, with additional language being based on certain factors such as whether the plan is covered by ERISA.
- New Coverage Examples. The proposed SBC adds a third coverage example (involving a simple fracture), provides clearer information about the plan’s deductibles and coinsurance, and eliminates hypothetical costs for specific services (e.g., lab tests and prescriptions) under each scenario.
- New Instructions. The instructions for completing the SBC include new information on addressing coverage or exclusion of abortion services, and incorporate previously-issued guidance on combining information for different cost-sharing options and explaining the effect of a health FSA, HRA, HSA or wellness program.
- Uniform Glossary. Proposed revisions include the requirement that SBCs underline terms defined in the glossary and, in electronic SBCs, hyperlink directly to the definition.
Takeaway for Employers. While the proposed revised SBC is a marked improvement over the current SBC, employees will likely have to wait until the 2018 open enrollment period for these changes to take effect.
The proposed SBC is available at: http://www.dol.gov/ebsa/pdf/sbc-template-proposed-new.pdf