Summary of Benefit Coverage Final Rule Released
February 22, 2012
Just this past week, after almost a year of delays, the Final Rules for the Summary of Benefit Coverage were released. As you may recall, the Patient Protection and Affordable Care Act’s (PPACA) required that the SBC be ready on March 23, 2012, but the law also required that the final rule be in place by March 23, 2011. As a result of this delay, the new requirements will begin on the first day of the first open enrollment period that begins on or after September 23, 2012.
The SBC requirements apply to all health plans and insurers, not just fully insured plans. Generally, PPACA requires that a Summary of Benefits Coverage (SBC) be provided to all “applicants and enrollees.” The regulations interpret this to mean that an SBC must be provided to all participants and beneficiaries. Further the regulations require that if a participant and beneficiaries reside at the same address, a plan administrator may send a single SBC to that address. The final rule does remove a requirement that the benefit summaries include premium information, which was a change made in response to concerns voiced by many employer and insurer groups, including the Small Business Association of Michigan and our Washington affiliate, National Small Business Association, that it would be very difficult for insurers to put a single figure on a coverage package that might be offered in the small-group and individual market, for example, or not reflect employer premium contributions in the group market. It also reduces the number of coverage examples that must be provided in each SBC from three to two. Under the final rule, insurers will have to illustrate what the plan would cover, and what the patient would pay, under two scenarios—having a baby and managing diabetes.
The rule also specifies that it is only providing guidance on what the SBC must contain for the first year and that; additional guidance will be provided before January 1, 2014 about how to communicate whether the plan provides minimum essential coverage.
The regulations require that group health plans and health insurance issuers are required to provide an SBC to participants and beneficiaries without charge at the following times:
Initial Enrollment. An SBC for each benefit package option for which the participant is eligible must be included with any distribution of enrollment materials. If written enrollment materials are not distributed, the SBC must be furnished no later than the first date the individual is eligible to enroll in coverage.
Open Enrollment. An SBC for the benefit package option in which the participant is enrolled must be included with other open enrollment materials. If reenrollment is automatic, the SBC must be provided no later than 30 days before the beginning of the next plan year.
HIPAA Special Enrollment. An SBC must be provided within 7 days of a request for special enrollment.
Upon Request. An SBC must be provided as soon as practical (but no more than 7 days) after a request.
Over the last year of debate, there were some changes made. The SBC no longer has to be a standalone document, and it may be provided in color or grayscale. The new materials also create a special rule for cases in which a plan’s terms “cannot reasonably be described in a manner consistent with the template and instructions.” In those cases, plans must make an effort to describe coverage in a consistent manner.
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