The COBRA Blog

SBCs 101: Final Regulations for Summary of Benefits and Coverage (SBCs)

Posted by Robert Meyers on Tue, Jun 23, 2015 @ 10:06 AM

summary-of-benefits-and-coverageOn June 12, 2015, the Departments of Labor, Treasury and Health and Human Services finalized regulations explaining the requirement to provide a Summary of Benefits and Coverage (SBC).  The Affordable Care Act (ACA) created the SBC requirement to provide individuals with health plan information in an easily understandable format with the hope that these individuals could better compare health insurance options.

The final regulations come at a time when plan sponsors are inundated with ACA reporting complexities.  Rather than throw your hands up in defeat, take a deep breath and add SBC updates to your to-do-list.

The ACA requires that SBCs be provided in a uniform format not exceeding 8 pages.  The law requires every SBC to cover the same 12 elements relating to the cost of coverage, benefits provided and other various information including contact information.

In 2012, the Departments published the original final SBC rule and then a series of FAQs.  In December 2014 the Departments modified the original SBC rule with a new proposed rule and SBC template.  The 2014 proposed rule included changes to the content of the SBC and information on distributing the SBC.  Three months after issuing the proposed rule, the Departments announced that final rules would come in two stages: (1) Provision of the SBCs, and (2) content of the SBCs.  Confused yet? 

The final regulations published this month relate only to provision of the SBCs.  These final regulations apply for the first plan or policy year beginning on or after September 1, 2015.  The Departments expects to issue an SBC template finalizing changes to the SBC content in January 2016.

Who Must Provide an SBC?
There are three general groups responsible for providing an SBC: (1) a group health insurer to a group health plan; (2) a group health insurer or self-insured group health plan to participants and beneficiaries; and (3) a health insurer to individuals in the individual insurance market. 

The final regulations contain specific SBC distribution time frames, responsibilities and methods specific to each of these three groups.  While a discussion of the many distribution rules and scenarios contained in the final regulations is beyond the scope of this blog post, we hope that this post reminds you to add Summary of Benefits and Coverage updates to your ACA reporting to-do-list.

To learn more about ACA compliance, COBRA administration and other employee benefit topics, subscribe to the COBRAGuard blog in the upper right hand corner of this screen.

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