As a reminder, starting with plan years and open enrollment periods beginning on or after September 23, 2012, employees must be provided a standard summary of benefits and coverage (SBC) notice explaining what the plan covers and what it costs. Below are three key areas of importance that employers should know about related to SBCs.
1. Who is responsible for providing the SBC?
An insured group health plan satisfies the requirement to provide an SBC if the issuer provides a timely and complete SBC to the plan participant or beneficiary. However, the rules ultimately hold both the group health plan and the issuer responsible, so an employer (as the plan administrator or sponsor) should make arrangements with the issuer to ensure compliance.
2. When should the SBC be distributed?
The SBC generally must be provided to plan participants and beneficiaries, without charge, as follows:
- Prior to initial enrollment in the plan;
- Within 90 days of special enrollment;
- Upon renewal of plan coverage; and
- Within 7 business days following receipt of a request.
In addition, if any material modification is made in any of the terms of the plan or coverage that would affect the content of the SBC (and that occurs other than in connection with renewal), the plan or issuer generally must provide notice of the modification not later than 60 days prior to the date on which such change would become effective.
3. What information is required to be included in the SBC?
The SBC must contain specific information summarizing key features of the plan and coverage, including:
- A description of the coverage and any cost sharing requirements (such as deductibles);
- Information regarding any coverage limitations or exceptions;
- Uniform standard definitions of medical and health coverage terms; and
- Coverage examples which illustrate sample medical situations and describe how much coverage the plan would provide in an event such as having a baby or managing Type II diabetes.
Both the SBC and the uniform glossary must comply with certain appearance and format requirements and must use terminology understandable by the average plan enrollee. Templates, instructions and related materials are available from the Center for Consumer Information & Insurance Oversight.
Information on other notices required to be provided under Health Care Reform, as well as model notices, may be found in our Benefits Notices Calendar.
And don't forget to download our FREE Health Care Reform Toolkit, featuring the most current guidance on key provisions affecting employers and group health plans.