Final Revised SBC Regulations Issued

IRS and the Departments of Labor and Health and Human Services have issued final revised regulations that identify the standards for the Summary of Benefits and Coverage ("SBC") requirement under the Patient Protection and Affordable Care Act ("ACA"). 

Under the ACA, 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.

Under the new regulations: 

  • The anti-duplication rules have been expanded. In particular, the regulations explain that a plan administrator may contract to require another entity to provide the SBC.
  • The requirements for electronic distribution of SBCs are clarified.
  • The SBC must state whether the plan offers minimum essential coverage and meets the minimum value requirement.
  • The requirements for the SBC when the terms of coverage are not yet finalized are explained. 

The new regulations are effective on the first day of the first plan year that begins on or after September 1, 2015. For disclosures to plans, the 2015 final regulations apply to health insurers beginning September 1, 2015.

Although the proposed regulations included a draft of a new SBC template, the agencies now say that the new SBC template and associated documents will not be finalized until January 2016, and will apply to coverage that would renew or begin on the first day of the first plan year (or, in the individual market, policy year) that begins on or after January 1, 2017 (including coverage beginning on or after January 1, 2017, for which open enrollment occurs in the fall of 2016). Until the new template is issued, both insurers and group health plans may rely on prior guidance. Therefore, among other things, the statement regarding the offer of minimum essential coverage and minimum value will not be required until the new templates are issued.