SUMMARY OF BENEFITS AND COVERAGE (SBC) - PROPOSED REGULATIONS, REVISED TEMPLATE, AND OTHER GUIDANCE
December 31, 2014
The proposed regulations clarify when and how a plan administrator or insurer must provide an SBC, shorten the SBC template, add a third cost example and revise the uniform glossary. The proposed regulations provide new information and also incorporate several FAQs that have been issued since the final SBC regulations were issued in 2012. The proposed changes are effective for plan years and open enrollment periods beginning on or after September 1, 2015. Comments on the proposed regulations will be accepted until March 2, 2015.
The preamble to the proposed regulations notes that shortening the SBC template would allow plans more flexibility to add information, such as describing the effect of a health FSA or HRA, or reflecting cost-sharing differences based on participation in a wellness program (so long as the total length of the SBC does not exceed the statutory limit of four double-sided pages).
The new SBC template, a sample completed SBC, and additional information is available at the following links:
The regulations confirm that SBCs are not required for expatriate health plans, Medicare Advantage plans or plans that qualify as excepted benefits. Excepted benefits include:
Employee Assistance Plans (EAPs) that meet the requirements to be excepted benefits
Health Savings Accounts (HSAs)
Dental and vision coverage that meet the requirements to be excepted benefits
SBCs are required for:
Health Reimbursement Arrangements (HRAs), because they are considered group health plans
Health Flexible Spending Accounts (FSAs) if they do not qualify as excepted benefits
The proposed SBC template eliminates a significant amount of information characterized as not being required by law and/or as having been identified through consumer testing as less useful for choosing coverage.
The sample template is reduced from four double-sided pages to two-and-a-half double-sided pages.
An additional coverage example is proposed, detailing a foot fracture involving an emergency room visit. (The existing maternity and diabetes scenarios would still be included.)
The coverage example calculator would remain available and updated claims and pricing data for the two existing examples and the third new example would be provided.
References to annual limits for essential health benefits (EHBs) and preexisting condition exclusions would be removed since plans may no longer impose such limits.
Information regarding minimum essential coverage (MEC) and minimum value (MV) would be required to be included on the SBC. For plans providing MEC, the language would explain that enrolling in the plan would satisfy health care reform’s individual mandate (referred to as the “individual responsibility requirement”). If a plan does not satisfy MV, additional language would be required explaining that this may create eligibility for financial assistance (subsidies) to purchase Marketplace coverage.
An issuer website would be required where the individual policy or group certificate of coverage could be reviewed.
Some definitions would be changed and new medical terms such as claim, screening, referral and specialty drugs would be added. Additional terms related to health care reform such as individual responsibility requirement, minimum value and cost-sharing reductions would also be added.
Paper vs. Electronic Distribution
SBCs could be provided electronically to participants in connection with their online enrollment or online renewal of coverage. SBCs could also be provided electronically to participants who request an SBC online. These individuals must also have the option to receive a paper copy upon request.
SBCs for self-insured non-federal government plans could continue to be provided electronically if the plan conforms to either the electronic distribution requirements that apply to ERISA plans or the rules that apply to individual health insurance coverage.