Changes Proposed to Summary of Benefits and Coverage (Benefit Minute)
The Affordable Care Act (ACA) requires health insurance issuers or plan sponsors to provide a Summary of Benefits and Coverage (SBC) for plan years beginning on or after September 23, 2012. The SBC uses a standard format to communicate specified information about the health coverage, and is intended to make it easier for individuals to compare various health coverage options. It includes a description of covered benefits, limitations and exclusions, and coverage examples.
The Departments of Labor, Treasury, and Health and Human Services have proposed certain changes to the content of the SBC that would apply to plan years beginning on or after September 1, 2015 (generally the fourth year of applicability). The intent of the proposed changes is to improve consumers’ access to important plan information and to provide clarifications that will assist health insurance issuers and plan sponsors in complying with the SBC requirements.
The proposed regulation removes content that no longer applies, including information about annual dollar limits on essential health benefits and pre-existing condition exclusions. In addition, certain definitions currently included in the body of the SBC have been removed and are now included in the separate uniform glossary. Information about the right to continuation coverage has been revised to include information about the Health Insurance Marketplace.
Finally, model language has been provided to answer whether the coverage satisfies the individual responsibility requirement. If the coverage also provides minimum value, the response is: “Yes. This coverage constitutes minimum essential coverage under the Affordable Care Act, so enrolling in this coverage satisfies your obligations under the individual responsibility requirement. In addition, this coverage provides a level of benefits specified in the Affordable Care Act as minimum value.”
If the coverage does not provide minimum value, the second sentence of the model language is deleted and the following is added in response to the question about minimum value: “No. This coverage does not provide the level of benefits specified in the Affordable Care Act as minimum value. As a result, you may be eligible for financial assistance to help you afford coverage purchased through a Marketplace if you decide not to enroll in this plan.”
The proposed regulation clarifies that statements regarding minimum essential coverage and minimum value must be included in the SBC (not as a separate disclosure document).
ACA required that the SBC not exceed 4 pages, which the Departments interpreted to be 4 pages, double-sided. The proposed SBC format has been shortened to 2½ pages, double-sided (5 pages total instead of 8). The Departments have indicated that shortening the length of the SBC template will allow plans flexibility to add more information about other provisions (e.g. wellness programs) or arrangements (e.g. the effect of a health care flexible spending account) without exceeding the statutory maximum of 4 double-sided pages.
Changes to Distribution and Timing
An SBC must be provided with any written materials for enrollment but no later than the first day an individual is eligible to enroll in coverage. If multiple plan options are available, an SBC must be provided for each plan option. At open enrollment, an SBC must be provided with open enrollment materials.
The proposed rule clarifies that the SBC may be provided to current participants electronically in the following circumstances:
- In accordance with the DOL rule for electronic distribution;
- In connection with online enrollment; or
- In response to a request for an electronic SBC.
For newly eligible employees, the SBC may be provided electronically if the format is readily accessible, and the eligible employee is notified that the SBC is available on the internet and that a paper copy is available free of charge upon request.
Changes to Coverage Examples
The SBC currently includes 2 specific coverage examples (having a baby and managing type 2 diabetes) to illustrate how the plan might cover medical care in given situations. The proposed regulation adds a third example for a simple foot fracture with emergency room visit. In addition, the underlying pricing data used for the examples has been updated to more accurately reflect the allowed charges for the costs included in the coverage examples. The separate page with questions and answers about the coverage examples has been eliminated.
Changes to Glossary of Terms
A separate uniform glossary of commonly-used health insurance terms must be made available upon request, either in paper form or via an internet address. The proposed regulation adds several new terms to the uniform glossary, including several that were previously included in the body of the SBC. The uniform glossary must be provided in the appearance authorized by the Departments and may not be modified.