News + Events
Summaries of Benefits and Coverage: Additional Guidance and Coverage Examples Calculator
June 26, 2012
Evelyn Small Traub
Jeanne E. Floyd
The Departments of Labor, Health and Human Services and Treasury (collectively, “the Departments”) have jointly issued 14 new Frequently Asked Questions about Affordable Care Act Implementation (Part IX) relating to the implementation of the Summary of Benefits and Coverage (SBC) requirements under PPACA (FAQs). The SBC is intended to provide consumers with consistent and comparable information regarding health plan benefits and coverage. The Departments also issued corrected versions of the official model SBC and completed sample SBC for use in compliance with the SBC final regulations.
The FAQs provide a new additional safe harbor for the electronic delivery of SBCs to health plan participants and beneficiaries. As explained in the FAQs, under the safe harbor, SBCs may be provided electronically to participants and beneficiaries in connection with their online enrollment or online renewal of coverage under the plan. SBCs also may be provided electronically to participants and beneficiaries who request an SBC online. In either case, the individual must have the option to receive a paper copy upon request. This new safe harbor provides significant relief to plan sponsors who wish to provide SBCs electronically as part of their on-line enrollment processes.
The new FAQ guidance provides additional clarifications:
- FAQ No. 8 affirms that during this first year of applicability, the Departments will not impose penalties on plans and issuers that are working diligently and in good faith to comply with the SBC requirements.
- FAQ No. 9 states that the Departments are developing a calculator that plans and issuers can use as a safe harbor for the first year of applicability to complete the required SBC coverage examples.
- On June 5, 2012, the Center for Consumer Information and Insurance Oversight (CCIIO) released the coverage example calculator that plans and issuers can use to complete the required coverage examples. The calculator allows plans and issuers to input a discrete number of elements about the benefit package, which will be taken from data fields used to populate the front portion of the SBC template. The Departments note that the coverage example calculator is not appropriate for plans with annual limits that have obtained a temporary waiver to maintain an annual limit until 2014 when such limits are banned under PPACA. The coverage example calculator is posted on the CCIIO Resources page.
- FAQ No. 10 addresses the utilization and coordination of “carve-out arrangements,” under which a plan or issuer contracts with a service provider to combine or manage certain benefits under the plan or policy. The FAQ clarifies that, unless it contracts otherwise, an issuer has no obligation to provide coverage information for benefits that it does not insure. However, group health plan administrators are responsible for providing complete SBCs with respect to a plan. A plan administrator that uses two or more insurance products provided by separate issuers with respect to a single group health plan may synthesize the information into a single SBC, or may contract with one of its issuers (or other service providers) to perform that function.
Additionally, FAQ No. 10 indicates that “during the first year of applicability, for enforcement purposes, with respect to a group health plan that uses two or more issuers, the Departments will consider the provision of multiple partial SBCs that, together, provide all the relevant information to meet the SBC content requirements,” as long as this is indicated to participants and beneficiaries along with contact information for additional assistance.
- FAQ No. 13 addresses the special treatment of expatriate plans, which the Departments acknowledge “face special circumstances and considerations in complying with the SBC requirements.” The FAQ provides that “the Departments will not take any enforcement action against a group health plan or group health insurance issuer for failing to provide an SBC with respect to expatriate coverage during the first year of applicability.”
With respect to participants and beneficiaries who enroll or re-enroll through at open enrollment period, the SBC requirements apply beginning on the first day of the first plan year that begins on or after September 23, 2012. For disclosures to plans, and to individuals and dependents in the individual market, these SBC requirements are applicable to health insurance issuers beginning on September 23, 2012.
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