Summary of Benefits and Coverage

What is the Summary of Benefits and Coverage?

Under the Affordable Care Act, insurance companies and group health plans will provide consumers with a concise document detailing information about their health plan benefits and coverage. As you prepare for your next open enrollment efforts, we would like to remind you that the Summary of Benefits and Coverage (or SBC) is a requirement.


What is the effective date for the SBC and who should get one?

The document must be provided to group health plan participants and beneficiaries at open enrollment, starting on or after September 23, 2012. For group health plans that do not have an open enrollment period, the requirements take effect on the first day of the first plan year that begins on or after September 23, 2012.


What is the purpose of the SBC?

The SBC is intended to describe the benefits and coverage under a health plan, in plain simple language. It must include information regarding the benefits and coverage options provided by the plan, coverage options’ cost sharing provisions, exceptions and limitations on coverage, and other information regarding the plan. In the efforts to make it more user friendly, the SBC must also provide illustrative examples for common benefits scenarios.


How can employers obtain the document?

The Departments – of Labor, Health and Human Services and Treasury – have collectively regulated the appearance of the SBC and released a template to help group health insurance issuers and employers meet the content and format requirements. We have received communication from your carrier, as they are working assiduously on this implementation. Upon the completion of this task, carriers will notify employers and brokers of how to access the SBC.


How should it be distributed?

The SBC may be provided as a stand-alone document or as part of other materials (it must be displayed at the beginning of the materials), or provided electronically (in html, MS Word, or pdf format). A glossary of the terms commonly used in health insurance has also been created, however it’s not required to be provided. The SBC must contain the web address where the glossary can be accessed, a phone number to obtain a paper copy and a disclosure that the paper copy is available upon request.


Where can I get additional information?

Penalties for not implementing this requirement will not be imposed during the first year of applicability – as long as the plan or issuer is working diligently to comply with the final regulations. A FAQ page is available at the DOL web site for further reference.

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