The SBC (Summary of Benefits and Coverage) is a document required under the Affordable Care Act. The purpose of an SBC is to give people straightforward information about the health plan in order to help them more easily compare plans and make appropriate enrollment and coverage decisions. An SBC is currently a four-page, double-sided document that uses plain language and a consistent format to summarize information about the plan sponsor’s available health plans. The document contains a description of the benefits and coverage under a plan including cost-sharing requirements and any information regarding exceptions, reductions or limitations. Two common cost-sharing examples are also provided: having a baby and managing Type 2 diabetes. These examples are just that, examples and are not specific to the Plan. The SBC must also reference a glossary that provides definitions of health coverage and medical terminology used in the SBC. The glossary must be provided upon request. (Note: A link to the glossary is included in all SBCs that Meritain produces.)
SBC Changes as of April 1, 2017
The final SBC template and associated documents, including changes to the uniform glossary, have been released. Health plans and issuers which have an annual open enrollment period will be required to use the new SBC template and associated documents beginning on the first day of the first open enrollment period that begins on or after April 1, 2017. If an annual open enrollment period is not utilized, the new SBC requirements are applicable as of the first day of the first plan year that begins on or after April 1, 2017.
The key changes to the SBC document are:
- A third coverage example related to a simple foot fracture with an emergency room visit has been added, and;
- The overall look of the template will be more streamlined, removing information that has been deemed to be not useful and;
- The document is shortened from four double-sided pages (8 pages total) to only two and one-half double-sided pages (5 pages total). The five pages may be extended to no more than four double-sided pages if the client voluntary discloses premium costs, additional “coverage examples” and/or additional descriptions of core limitations.
The uniform glossary is also changing which includes removing references to pre-existing conditions and annual limits on essential health benefits. In addition definitions were added for “claim”, “individual responsibility requirement”, “minimum value” and “cost-sharing reductions”. The glossary has increased from 4 to 6 pages.
Previous Requirements for SBCs in Use Prior to March 31, 2017
Below is a high-level overview of the standards that must be met in order for a health plan to be considered in compliance with the SBC rules:
o Must be presented in a "uniform format"
o May not exceed four double-sided pages in length
o May not include print smaller than 12-point font
o Must use terminology understandable by the average plan enrollee
o Must be presented in a culturally and linguistically appropriate manner
o Must disclose availability of language assistance in certain non-English languages where at least 10% of the population (based on county level census data) is literate in the same non-English
language and support language assistance requests in such languages, (translated SBCs are available on HHS website)
• Currently, the languages that the SBC may need to be translated in include (1) Spanish, (2) Chinese, (3) Tagalog and (4) Navajo. HHS has agreed to provide written translations of the SBC
template to comply with this requirement and have posted the samples on their website.
o Paper or electronic (if certain conditions are met)
o Provided as a stand-alone document or in combination with other summary materials, such as the Summary Plan Description (SPD) provided the SBC is a part of the SPD and prominently
displayed at the beginning of the document (i.e., immediately after the Table of Contents)
- Content: At a minimum, ACA requires the following to be included;
o Uniform definitions of standard insurance and medical terms
o A description of the coverage, including cost sharing; exceptions, reductions, and limitations on coverage; the cost sharing provisions; renewability and continuation of coverage provisions
and coverage examples.
o A statement of whether the plan provides minimum essential coverage and minimum value
o A statement that the outline is a summary and that the coverage document itself should be consulted to determine the controlling contractual provisions
o A contact number for questions and obtaining a copy of the plan document or policy
o As applicable, contact information for obtaining a list of network providers and information on prescription drug coverage as well as an internet address and contact number for obtaining
the uniform glossary and a disclosure that paper copies are available
Under a special rule, to the extent a plan's terms that are required to be included in the SBC cannot be reasonably described consistent with the template and the instructions, the plan is required to accurately describe the plan's terms while using its best efforts in a manner that is still consistent with the instructions and template.
Group health plans have the option of either providing the document as a stand-alone document or in combination with other summary materials, such as their Summary Plan Description (SPD). If a group chooses to provide the SBC with their SPD, the SBC must be a part of the SPD and prominently displayed at the beginning of the document. The regulations recommend providing it immediately after the Table of Contents.
Timing of Distribution
SBCs must be distributed at the following times:
- Upon application to the Plan
- By the first day of coverage (if there are changes)
- Upon renewal
- During enrollment periods
- During special enrollment periods
- Upon request Upon a material modification (during plan year, as defined under ERISA)
o 60-Days Advance Notice Required on Material Modifications - If, at any time, a plan sponsor makes any material modification to the terms of the plan or coverage involved (whether it is
an enhancement or reduction in benefits) that is not reflected in the most recently provided SBC, the plan must provide notice of the modification to enrollees at least 60 days in advance.
The requirement for the Notice of Material Modification is not triggered upon renewal. The Notice of Material Modification may be satisfied by providing an updated SBC or a separate notice.
There is a fee for the production of the SBC for our clients.
Penalty for noncompliance
In addition to existing penalties related to insurance market reform requirements, Section 2715 of the Public Health Services Act (PHSA) allows for the imposition of a $1,105 fine for each willful failure to comply with the section. Each enrollee is considered an independent failure. For the first two years of applicability, the Departments had issued a safe harbor period for non-enforcement to the extent the plan was working diligently and in good faith to comply with the SBC requirements. That safe harbor has since expired.
This content is being provided as an informational tool. It is believed to be accurate at the time of posting and is subject to change. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this information, Meritain Health is not exercising discretionary authority or assuming a plan fiduciary role, nor is Meritain Health providing legal advice.