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Summary of Benefits and Coverage – Delayed

September 1, 2010

As we have previously reported, in mid-August the Departments of Health and Human Services (HHS), Labor and Treasury issued new proposed rules that set requirements for health insurers and plans to provide a Summary of Benefits and Coverage (SBC) and a uniform glossary of terms that are commonly used in the health insurance industry.

According to the Affordable Care Act, HHS was required to provide this guidance and a template for compliance by March 23, 2011, with employers required to provide these new SBCs to their participants beginning March 23, 2012.  As with other components of the Affordable Care Act there are many issues and unanswered questions.  Including:

  • Issue one surrounding this new requirement is that the guidance and template came out roughly 5 months late from HHS.
  • The template was 8 pages long versus the 4 pages contemplated in the Affordable Care Act.  
  • HHS asked for public comments on the template and guidance – and they got many comments.

HHS intends to issue, final regulations that take into account these comments and other feedback.  It is anticipated that the Departments’ final regulations, once issued, will include a date that gives group health plans and health insures sufficient time to comply. As a result, health insurers and plans will not have to meet the original compliance date of March 23, 2012.

As a reminder, the Summary of Benefits and Coverages is intended to help consumers understand and evaluate their health insurance choices by providing a concise document detailing, in plain language, simple and consistent information about health plan benefits and coverage. When completed, the SBC is to summarize the key features of a health insurance plan, including:

  • covered benefits,
  • cost-sharing provisions,
  •     coverage limitations and exceptions.

The SBC will include coverage examples illustrating benefits provided under the plan for three common scenarios.  The scenarios include having a baby, treating breast cancer, and managing diabetes. The examples should help subscribers understand and compare their share of the costs for a particular plan. The uniform glossary will help subscribers understand some of the more common wording (deductibles, co-insurance, co-payment, etc) used by health insurers and plans.

By law, the SBC is to be provided health insurers to group health plans and directly to individual policyholders in the individual market. Additionally, the SBC must be provided by insurers and group health plans to all participants and beneficiaries including subscribers and their dependents during the initial enrollment and upon renewal.  Additionally, the proposed rules require that group health plans and issuers provide 60-day advance notice of a material modification to the plan as reflected in the SBC. The 60-day advance notice does not apply to renewals. This notice may be sent as a separate notice describing the material modification or by providing an updated SBC reflecting the modification.

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