With open enrollment for most employers just around the corner, sponsors of insured and self-insured group health plans should already be planning for how they will comply with the Affordable Care Act’s new summary of benefits and coverage (SBC) requirement. The SBC is a four page summary of the benefits and coverage available under the group health plan. It must describe the coverage and cost sharing provisions, services not covered by the plan, limitations on coverage, renewability and continuation coverage provisions, and uniform definitions of standard insurance and medical terms.
Compliance with the new SBC rules is required beginning with any open enrollment period that begins on or after September 23, 2012. For most calendar-year plans, this means that SBCs will be required during open enrollment in 2012. For individuals enrolling other than through open enrollment (e.g., newly eligible or special enrollees), SBC’s must be provided starting on the first day of the first plan year that begins on or after September 23, 2012. Therefore, some non-calendar year plans may have to start providing SBC’s to newly eligible individuals and special enrollees before the next open enrollment period.
Generally speaking, in a self-insured plan it is the employer’s duty to provide the SBC to participants and beneficiaries before they enroll or re-enroll. For a fully insured plan, the employer and the insurer are jointly responsible for providing the SBC. If two or more insurers provide benefits under a plan, as may be the case with separate major medical and prescription drug coverage, the employer is responsible for coordination and ensuring that complete SBCs are provided. SBCs are not required for stand-alone vision or dental plans and health FSAs.
Plan sponsors should work with their insurers, third-party administrators and attorneys to ensure the SBC contains accurate and understandable information, complies with the standard formatting requirements, and is timely distributed to plan participants and beneficiaries.