May 18, 2012

Agencies Issue Additional FAQs on PPACA’s Summary of Benefits and Coverage Requirements

On Friday, May 11, the Departments of Labor, Treasury, and Health and Human Services (the “Agencies”) issued additional FAQs addressing the new summary of benefits and coverage (“SBC”) requirements under the Patient Protection and Affordable Care Act (“PPACA”). As stated in a previous SGR Client Alert, under PPACA, group health plans and insurers are required to provide plan participants and beneficiaries with a summary document that “accurately describes the benefits and coverage under the applicable plan or coverage.”

In February, the Agencies issued final regulations implementing the SBC requirements. Additionally, as summarized in a previous SGR Client Alert, in March, the Agencies issued the first set of FAQs addressing the SBC requirements.

Agencies Reiterate Good Faith Compliance Standard

The FAQs reiterate that during the first year of applicability, penalties will not be imposed on group health plans and insurers that are working diligently and in good faith to comply with the SBC requirements.

Highlights of the Additional SBC FAQs

Some highlights of the FAQs providing additional guidance on the SBC requirements include the following:

  • SBCs may be provided electronically to participants and beneficiaries in connection with their online enrollment or online renewal of coverage under the plan. In addition, SBCs may be provided electronically to participants and beneficiaries who request the SBC online (e.g., via e-mail).
  • Certain electronic features (e.g., scrolling and expanding columns) are permitted when displaying the SBC electronically. However, the deletion of columns or rows is not permitted when displaying a complete SBC.
  • It is permissible to combine SBCs or SBC elements to provide a side-by-side comparison of different benefit package options. However, such a comparison would not satisfy the requirements under PPACA to provide the SBC — the full SBC for each of the benefit packages included in the comparison must be made available in accordance with the SBC requirements.
  • For the first year of applicability, the Agencies are developing a calculator that plans and issuers can use as a safe harbor to complete the coverage examples to be included in the SBC. The calculator will be posted here in the near future.
  • Written translations of the SBC template in Spanish, Chinese, and Tagalog are now available on the CMS website. Navajo translations will be available shortly.

The FAQs also include additional guidance on the SBC requirements as they apply to health insurance issuers.

Updated SBC Templates Are Now Available

The Agencies have also posted updated versions of the SBC template, the sample completed SBC, and the guide for coverage example calculations for the diabetes scenario. These updated documents can be accessed on the Department of Labor website.

For more information, please contact your SGR Executive Compensation and Employee Benefits counsel.

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