Summary of Benefits & Coverage FAQs
The Affordable Care Act (ACA) requires health plans and health insurance issuers to provide a summary of benefits and coverage (SBC) to applicants and enrollees. The SBC is intended to be a short, simple explanation about the health plan’s benefits and coverage than can help consumers more easily compare plan options.
On April 23, 2013, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued Frequently Asked Questions (FAQs Part XIV) on the SBC requirement for the second year of its applicability. This guidance has been provided in addition to the final regulations issued on February 14, 2012 and three prior sets of FAQs related to the SBC rules (FAQs Parts VIII, IX and X).
The new FAQs address issues related to providing SBCs in the second year of applicability, including:
- Changes made to the templates for the SBC and the uniform glossary;
- Transition relief with respect to the minimum essential coverage and minimum value disclosure requirements;
- Extension of certain existing SBC safe harbors and other enforcement relief applicable for first year SBCs; and
- An “anti-duplication” rule for student health insurance coverage.
This Legislative Brief contains the FAQs Part XIV. Please contact Custom Benefit Consultants, Inc. for more information on prior FAQs related to the SBC requirement.
SBC EFFECTIVE DATE
Plans and issuers must start providing the SBC as follows:
- Issuers must provide the SBC to health plans effective September 23, 2012.
- Plans and issuers must provide the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period beginning with the first day of the first open enrollment period that begins on or after September 23, 2012.
- For participants who enroll in coverage other than through an open enrollment period (for example, newly eligible individuals and special enrollees), plans and issuers must provide the SBC beginning on the first day of the first plan year that begins on or after September 23, 2012.
Overview of FAQs Part XIV
In conjunction with the final regulations issued on February 14, 2012, the Departments published a notice announcing the availability of templates, instructions and related materials for use in the first year of applicability (that is, for SBCs and the uniform glossary provided with respect to coverage beginning before January 1, 2014). However, these documents do not include language for the required statement in the SBC regarding:
- Whether a plan or coverage provides minimum essential coverage (MEC); and
- Whether the plan's or coverage's share of the total allowed costs of benefits provided under the plan or coverage meets applicable minimum value (MV) requirements.
When these documents were first released, the Departments stated that updated materials would be issued for later years. The FAQs Part XIV contain these updated materials that can be used in the second year of applicability. In the FAQs, the Departments explain the changes that have been made and how these documents can be used to comply with the SBC requirement.
What is the Summary of Benefits and Coverage?
The SBC is a concise document providing simple and consistent information about health plan benefits and coverage. It must be provided free of charge. Its purpose is to help you better understand the coverage you have and to make easy comparisons of different options when selecting new coverage.
When will I receive my summary of benefits and coverage?
You will receive an SBC upon application for health coverage, or, in some cases, by the first day of coverage.
You will also receive an SBC when your health care issuer renews or reissues your policy, such as after open enrollment.
You can also request an SBC at any time. SBCs that are provided upon application (by issuers) or upon request (by either plans or issuers) must be provided as soon as practicable, but no later than seven days after receipt of the application or request.
What is all included in the SBC?
The SBC must contain:
- Uniform definitions of standard insurance and medical terms
- A description of coverage, including cost-sharing for specified categories benefits
- Exceptions, reductions and limitations on coverage
- Cost-sharing provisions, including deductible, coinsurance and copayment obligations
- Renewability and continuation of coverage provisions
- Specified coverage examples that illustrate benefits provided under the plan or coverage for common benefits scenarios (including pregnancy and serious or chronic medical conditions)
- A statement that the outline is a summary of the policy and that the coverage document itself should be consulted for contractual provisions
- A contact number for consumers and a web address where a copy of the actual coverage policy or certificate of coverage can be reviewed and obtained
- For plans and issuers with one or more provider networks, an Internet address (or similar contact information) for obtaining a list of the network providers
- For plans and issuers with a prescription drug formulary, an Internet address (or similar contact information) for obtaining information about the prescription drug coverage
- An Internet address for obtaining the uniform glossary, a contact phone number to obtain a paper copy of the uniform glossary and a disclosure that paper copies are available
The SBC is not required to include premium or cost of coverage information.
Beginning in 2014, the SBC must include a statement of whether the plan provides minimum essential coverage and ensures that the plan’s share of total allowed costs meets applicable requirements.
What do I have to do?
As long as you are properly enrolled, it is the plan issuer’s responsibility to get you a copy of the SBC.
What are my rights?
If your employer offers you an electronic version of your SBC, you are legally entitled to request and be offered a paper copy.
Q: What templates should plans and issuers use for the SBCs and the uniform glossary required to be provided after the first year of applicability?
A: An updated SBC template (and sample completed SBC) are now available on the Center for Consumer Information & Insurance Oversight (CCIIO) website and the DOL website. These documents are authorized for use with respect to group health plans and group and individual health insurance coverage for SBCs provided with respect to coverage beginning on or after January 1, 2014, and before January 1, 2015 (referred to in this document as “the second year of applicability”).
The only change to the SBC template and sample completed SBC is the addition of statements of whether the plan or coverage provides MEC (as defined under section 5000A(f) of the Internal Revenue Code) and whether the plan or coverage meets the MV requirements (that is, the plan’s or coverage’s share of the total allowed costs of benefits provided under the plan or coverage is not less than 60 percent of such costs). On page 4 of the SBC template (and illustrated on page 6 of the sample completed SBC), a plan or issuer should indicate in the designated entry on the SBC template that the plan or coverage “does” or “does not” provide MEC and whether the plan or coverage “does” or “does not” meet applicable MV requirements.
There are no changes to the uniform glossary, the Instructions for Completing the SBC (for either group or individual health coverage), “Why This Matters” language for the SBC or the coverage examples.
Q: Our plan is already working on the process of preparing SBCs for issuance in the second year of applicability and it would be an administrative burden to add the new data element to the template at this point in the process. Is any relief available to provide information about MEC and MV without changing the SBC template?
A: Yes. To the extent a plan or issuer is unable to modify the SBC template for disclosures required to be provided with respect to the second year of applicability, the Departments will not take any enforcement action against a plan or issuer for using the template authorized for the first year of applicability, provided that the SBC is furnished with a cover letter or similar disclosure stating whether the plan or coverage does or does not provide MEC and whether the plan’s or coverage’s share of the total allowed costs of benefits provided under the plan or coverage does or does not meet the MV requirement under the ACA. The language for these statements is as follows:
- Does this Coverage Provide Minimum Essential Coverage?
The Affordable Care Act requires most people to have health care coverage that qualifies as “minimum essential coverage.” This plan or policy [does/does not] provide minimum essential coverage.
- Does this Coverage Meet the Minimum Value Standard?
The Affordable Care Act establishes a minimum value standard of benefits of a health plan. The minimum value standard is 60% (actuarial value). This health coverage [does/does not] meet the minimum value standard for the benefits it provides.
