A Summary of Benefits and Coverage (SBC) is required for all group health plans, including Health Reimbursement Accounts (HRAs). The existing rules published February 2012, were amended with proposed rules published December 30, 20141 and final regulations published June 16, 2015.2
Background
The SBC requirement requires group health plans and health issuers to compile and provide an SBC that “accurately describes the benefits and coverage under the applicable plan and coverage.” The requirement applies to insured and self-funded ERISA group health plans, including grandfathered plans, as well as to non-ERISA group health plans and individual health insurance coverage.3
Keep in mind that the new template and associated documents (instructions, uniform glossary, and supplementary information) will be finalized by January 2016 and will apply to coverage that would renew or begin on the first day of the first plan or policy year that begins on or after January 1, 2017. This includes the open enrollment period occurring in the fall of 2016.
This Alert provides key components of the changes as it relates to a group health plan, however, you may view all changes at: http://www.dol.gov/ebsa/healthreform/regulations/summaryofbenefits.html
Summary of Proposed Changes Impacting Group Health Plans and Plan Sponsors Include:
- Providing SBC at Application or Enrollment
The SBC must be provided within specified timeframes when a participant enrolls for coverage. The proposed regulations clarify that, if an SBC was provided prior to the enrollment event, no new SBC is required to be provided upon enrollment unless information changed in the SBC.
- Modified Content Requirements– Delayed until fall of 2016
The SBC will be required to include statements regarding minimum value (MV) in addition to minimum essential coverage (MEC). The Agencies also propose to require a Qualified Health Plan (QHP) to disclose whether abortion services are covered or excluded and whether coverage is limited to services for which federal funding is allowed. The draft instruction guide for individual health insurance indicates that coverage of abortion services must be described in the “services your plan does not cover” or “other covered services” section. Plans and insurers will continue to be required to provide contact information for questions, but insurers would be required to include an Internet address for obtaining a copy of the policy or group certificate. It appears that the SBC for a self-insured group health plan would not be required to provide an Internet address for obtaining a copy of the plan. Of course, ERISA group health plans must provide a copy of the plan document upon written request by a plan participant or beneficiary under ERISA section 104(b). We assume that future regulations will address this issue.
The Agencies also propose to add a Coverage Example for a foot fracture with an emergency room visit. The Agencies are publishing updated claims and pricing data, underlying the two existing coverage examples, and propose to add a narrative description and claims pricing data for the third proposed coverage example. Perhaps most importantly for group health plan sponsors, the Agencies propose that the coverage example calculator be authorized for continued use.
- Reduce Unnecessary Duplication of SBC Disbursement
For a group health plan that uses two or more insurance products provided by separate issuers, the group health plan administrator is responsible for providing complete SBCs with respect to the plan.
The group health plan administrator may contract with one of its issuers (or other service provider) to provide SBCs. If plan administrators do so, they must monitor the other party’s performance and correct any noncompliance determined to have occurred. If the plan administrator does not have information necessary to correct the noncompliance, it must communicate with participants about the noncompliance and take steps as soon as practicable to avoid future violations.
Currently there is a an enforcement safe harbor for a group health plan that uses two or more insurance products provided by separate issuers with respect to a single group health plan. Under this enforcement safe harbor, the group health plan administrator may synthesize the information into a single SBC or provide multiple partial SBCs that, together, provide all the relevant information to meet the SBC content requirements. In such circumstances, the plan administrator should take steps (such as a cover letter or a notation on the SBCs themselves) to indicate that the plan provides coverage using multiple insurance products and that individuals may contact the plan administrator for more information (and provide the contact information).
- SBC Format–Delayed until fall of 2016
Under the proposed rule the SBC would be shortened to two-and-a-half double-sided pages. This is primarily due to the elimination of the last page (which is currently Q&As about the Coverage Examples), moving many definitions to the uniform glossary, as well as eliminating some of the required information. Specific font types are encouraged (Arial and Garamond) as the result of consumer focus group feedback. Finally, the Agencies propose to retain the requirement that SBCs provided in connection with group health plan coverage be provided either as a standalone document or in combination with other summary materials (for example, an SPD). The SBC information is to remain intact and prominently displayed at the beginning of the materials and in accordance with the timing requirements for providing an SBC.
- On Line Access
Issuers must include an internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained. The final regulations require these documents to be easily available to individuals, plan sponsors, and participants and beneficiaries shopping for coverage prior to submitting an application for coverage.
For group coverage, the actual certificate of coverage must be made available after it is executed.
1 The Departments of Health and Human Services, Labor and Treasury jointly published the Proposed Rule. See 79 Fed. Reg. 78578.
2 Summary of Benefits and Coverage and Uniform Glossary, 26 CFR Part 54, 29 CFR Part 2590, 45 CFR Part 147, 80 Fed. Reg. 34292, 34293 (June 16, 2015).
3 On August 22, 2011, the Agencies issued proposed regulations. See 76 Fed. Reg. 52442 and 76 Fed. Reg. 52475. The final regulations were published in the Federal Register on February 14, 2012 and were effective on April 16, 2012.
