The U.S. Departments of Labor, Health and Human Services, and the Treasury have proposed new rules that establish standards for group health plans to provide, without charge, a summary of benefits and coverage (SBC), as well as a uniform glossary of terms commonly used in health insurance coverage, as required under the Affordable Care Act. The Departments also issued a proposed template for the SBC (with proposed instructions and sample language for completing the template) and a proposed uniform glossary. The new requirements would be applicable beginning March 23, 2012.
Summary of Benefits and Coverage (SBC)
Under the proposed rules, a group health plan (including its administrator), and a health insurance issuer offering group health insurance coverage, must provide an SBC to a participant or beneficiary with respect to each benefit package offered by the plan or issuer for which the participant or beneficiary is eligible.
- The SBC must be provided as part of any written application materials that are distributed by the plan or issuer for enrollment. If the plan does not distribute written application materials for enrollment, the SBC must be distributed no later than the first date the participant is eligible to enroll in coverage for the participant or any beneficiaries.
- A plan or issuer also must provide the SBC to participants or beneficiaries upon request, as soon as practicable, but in no event later than 7 days following the request.
- Additionally, if a group health plan or health insurance issuer offering group health insurance coverage makes any material modification in any of the terms of the plan or coverage that would affect the content of the SBC (that is not reflected in the most recently provided SBC), and that occurs other than in connection with a renewal or reissuance of coverage, the plan or issuer must provide notice of the modification to enrollees not later than 60 days prior to the date on which such modification will become effective.
The proposed rules specify that the SBC must be provided as a stand-alone document in the form authorized by the Departments. The SBC must be presented in a uniform format, use terminology understandable by the average plan enrollee, not exceed 4 double-sided pages in length, and not include print smaller than 12-point font. According to the proposed rules, the SBC must include the following information:
- Uniform definitions of standard insurance terms and medical terms;
- A description of the coverage, including cost-sharing, for each category of benefits identified by the Departments in guidance;
- The exceptions, reductions, and limitations of the coverage;
- The cost-sharing provisions of the coverage, including deductible, coinsurance, and copayment obligations;
- The renewability and continuation of coverage provisions;
- Coverage examples that illustrate benefits provided under the plan or coverage for common benefits scenarios (including pregnancy and serious or chronic medical conditions), as identified by the Departments;
- With respect to coverage beginning on or after January 1, 2014, a statement about whether the plan or coverage provides "minimum essential coverage" and whether the plan's or coverage's share of the total allowed costs of benefits provided under the plan or coverage meets applicable requirements;
- A statement that the SBC is only a summary and that the plan document, policy, or certificate of insurance should be consulted to determine the governing contractual provisions of the coverage;
- Contact information for questions and obtaining a copy of the plan document or the insurance policy, certificate, or contract of insurance;
- For plans and issuers that maintain one or more networks of providers, an Internet address (or similar contact information) for obtaining a list of network providers;
- For plans and issuers that use a formulary in providing prescription drug coverage, an Internet address (or similar contact information) for obtaining information on prescription drug coverage;
- An Internet address for obtaining the uniform glossary; and
- Premiums (or in the case of a self-insured group health plan, cost of coverage).
The SBC may be provided in paper form, or electronically if certain requirements are met.
The proposed rules also require that a group health plan, and a health insurance issuer offering group health insurance coverage, make available to participants and beneficiaries a uniform glossary which provides specified uniform definitions of certain health-coverage-related terms and medical terms, such as "deductible" and "co-pay."
- The glossary must be provided in accordance with certain appearance and format requirements and must utilize terminology understandable by the average plan enrollee.
- A plan or issuer must make the uniform glossary available upon request, in either paper or electronic form (as requested), within 7 days of the request.
Templates, Instructions, and Related Information
Along with the proposed rules, the Departments issued a proposed SBC template (with instructions, samples, and a guide for coverage examples calculations to be used in completing the SBC template), and a uniform glossary, that may be used by plans to comply with the disclosure requirements under the Affordable Care Act. To review these materials, please click here.
For More Information
To read more about the Affordable Care Act, please visit the HR360 section on Health Care Reform. The links below contain additional information relating to the summary of benefits and coverage and uniform glossary requirements.