Employer Guidance on SBC Requirements

SUMMARY OF BENEFITS AND COVERAGE AND UNIFORM GLOSSARY  (SBC)

On February 14, 2012, the Department of Treasury, Internal Revenue Service, Department of Labor, Employee Benefits Security Administration and the Department of Health & Human Services issued the Final Guidance  & Rules regarding The Summary of Benefits and Coverage and Uniform Glossary (SBC). The SBC requirements state that group health plans must ‘accurately describe the benefits and coverage under the applicable plan or coverage’ and calls for the ‘development of standards for the definitions of terms used in health insurance coverage.’  These requirements go into effect the first day of the group plan year that begins on or after September 23, 2012. 

An SBC should be provided to applicants, enrollees, and policyholders or certificate holders. The responsibility to provide an SBC is on the health insurance issuer (including a group health plan that is not a self-insured plan) offering health insurance coverage within the US; or in the case of a self-insured group health plan, the plan sponsor or designated administrator of the plan (as such terms are defined in section 3(16) of ERISA). In addition, the final regulations hold the plan administrator of a group health plan responsible for providing an SBC.

 Under the final regulations, the SBC must be provided in writing and free of charge:

1)      by a group health insurance issuer to a group health plan
2)      by a group health insurance issuer and a group health plan to participants and beneficiaries, and
3)      by a health insurance issuer to individuals and beneficiaries in the individual market

An SBC is not required for plans, policies or benefit packages that constitute excepted benefits such as standalone dental or vision plans.  Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) generally do not fall under the requirements for an SBC but coverage for such can be denoted in the appropriate spaces on the SBC for deductibles, copayments, coinsurance and benefits otherwise not covered by group health coverage.  An SBC with a high deductible plan associated with an HSA should mention the effects of employer contributions. A Health Reimbursement Arrangement (HRA) is a group health plan and requires an SBC; however, coverage can be denoted in the appropriate spaces on the SBC for deductibles, copayments, coinsurance and benefits otherwise not covered by the other group health coverage.

More information on SBC will be provided in the coming months.

To view the final regulations: http://webapps.dol.gov/FederalRegister/HtmlDisplay.aspx?DocId=25818&AgencyId=8&DocumentType=2 

For the published version of Guidance for Compliance: http://webapps.dol.gov/FederalRegister/HtmlDisplay.aspx?DocId=25819&AgencyId=8&DocumentType=2