Agencies Release FAQs on Updated 2021 Summary of Benefits and Coverage Template

HHS, DOL and IRS (collectively, the "Agencies") have released FAQs discussing the recently updated version of the Summary of Benefits and Coverage ("SBC") template and related materials (i.e., instructions, coverage examples guides and narratives, and the optional SBC Coverage Examples Calculator) to be used by group health plans and health insurers beginning in 2021.

Background.  The Affordable Care Act ("ACA") requires group health plans and issuers to provide participants and beneficiaries with a brief summary, or SBC, describing plan coverage and cost-sharing responsibilities. The SBC must follow a uniform format and contain specified information.

The Agencies have created a revised template SBC for group health plan sponsors and issuers to use to satisfy the ACA's SBC requirements. The Agencies confirmed that the 2021 versions of the SBC materials have "minor edits" to correct several documents, including the template.

Agencies' FAQs.  The FAQs contain the following information on the updated SBC template:

Applicability Date. The FAQs confirm that the 2021 version of the SBC template and related materials must be used beginning with the first day of the first open enrollment period for any plan year beginning on or after January 1, 2021, with respect to coverage beginning on or after that date.

SBC Coverage Examples Calculator. The FAQs explain that the Agencies have released an updated version of the SBC Coverage Examples Calculator.

NOTE: The Calculator was originally developed as a tool to assist group health plans and health insurers in generating estimated out-of-pocket costs that would be paid for three hypothetical medical scenarios: maternity care, type II diabetes, and a simple foot fracture.

The FAQs confirm that group health plans and health insurers are not required to use the updated Calculator, and that they may create their own calculators or modify the Calculator to more accurately reflect a plan's specific design.

The FAQs acknowledge that absent further guidance to the contrary, plans and insurers may continue to use the Calculator as a safe harbor even in instances where it would be possible for a plan or insurer to develop a more accurate method of completing coverage examples.

The FAQs are accessible at: https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-41.pdf