September 19, 2011
The Departments of Health and Human Services, Labor, and Treasury (the Departments) jointly issued proposed regulations with guidelines and templates for group health plans to create the Summary of Benefits and Coverage (SBC) mandated by the Health Care Reform Act. A few highlights of the proposed regulations include guidance on:
- The Content of the SBC. The proposed regulations would require that an SBC contain:
- Uniform definitions of standard insurance and medical terms (Uniform Glossary);
- A description of coverage for each category of benefits;
- Limitations on coverage;
- Cost-sharing provisions of coverage (such as deductibles and copayments);
- Renewability of coverage;
- “Coverage examples” illustrating common benefits scenarios (such as the coverage of expenses in the event of pregnancy);
- Whether the plan provides minimum essential coverage (delayed until 2014);
- A statement that an SBC is a summary, not to be consulted for contractual provisions of coverage;
- A contact number and Internet address at which participants can obtain or review plan documents, coverage policies, or group certificates of coverage; and
- An Internet address at which participants can obtain or review:
- The network of providers;
- Prescription drug coverage;
- The Uniform Glossary; and
- Premiums or cost of coverage.
- The Format of the SBC. The proposed regulations would require that plans provide an SBC in writing (twelve-point or larger font) and limit the SBC to four double-sided pages or less. Plans can provide the SBC in paper or electronic format. In counties in which 10% or more of the population residing in the county is literate only in the same non-English language, the plan must:
- Provide interpretive services (for example, a telephone customer assistance hotline);
- Provide written translations of the SBC upon request; and
- Disclose the availability of language services in English versions of the SBC.
- Templates. To help plans comply with the proposed regulations, the Departments have provided the following proposed templates for the SBC and the Uniform Glossary:
- When to Provide the SBC. The proposed regulations would require the group health plans to provide an SBC free of charge to all eligible employees:
- Anytime participants and beneficiaries are first eligible to enroll in coverage;
- When a plan or individual is comparing health coverage options (for example, at open enrollment);
- Within 7 days of an individual’s request; and
- When information in the SBC changes.
- Material Modifications to the SBC. The proposed regulations would require plans to provide a new SBC upon a material modification that affects the content of the SBC 60 days before the date the material modification takes effect.
Next Steps. The Departments will consider comments on the proposed regulations received by October 21, 2011. The regulations are proposed to be effective on March 23, 2012. In the meantime, self-administered plans should determine whether the plan sponsor or third-party administrator will prepare the SBC. Plan sponsors of fully insured plans may wish to confirm that their insurance carriers are taking action to prepare the SBC.
Please click here for a PDF of this newsletter.