On Dec. 30, 2014, the IRS, DOL, and HHS issued proposed regulations relating to the summary of benefits and coverage (SBC) requirement under health care reform. In addition to the proposed regulations, the agencies also released revisions to the SBC template, instructions and uniform glossary summary.
Parts of the proposed regulations formalize previous FAQ guidance which addressed items such as contractual responsibility of SBC compliance, excluding Medicare Advantage plans from the SBC requirement, ability to provide SBCs electronically in conjunction with online enrollment and permitting a group health plan with multiple benefit packages to provide either a single or multiple SBCs.
Clarifications were made instructing that if an SBC was provided before an applicable event that would normally require an SBC distribution, a new SBC would not be required unless there were any changes to the SBC in the meantime. Each agency also addressed consequences for failure to provide the SBCs.
In terms of content, in addition to the existing requirement to provide contact information on the SBC for questions about the SBC, insurers are now required to include an internet address for obtaining a copy of the individual coverage policy or group certificate. There is no similar requirement for SBCs prepared for self-insured plans.
The 2012 final regulations regarding SBCs required the agencies to develop standard definitions of certain insurance-related terms. For this purpose, the agencies drafted a uniform glossary as a separate document that is a companion to the SBC. The uniform glossary must be provided in the format authorized by the agencies. The guidance issued in December 2014 added new terms to the uniform glossary, including ”claim,” “cost- sharing reduction,” individual responsibility requirement,” ”marketplace,” “minimum essential coverage,” ”minimum value standard” and ”specialty drug.”
Finally, there were changes made to the SBC template. The most obvious change was from four double-sided pages to two double-sided pages plus half of another page. The revised template removed two questions in the “Important Questions” section: The first about annual limits and the second about what is not covered. The SBC is also now required to include information about whether the plan provides MEC or meets minimum value requirements and what the implications of that determination are for the individual. Previously, the employer could use a separate document to report whether the plan provided MEC or met minimum value requirements. Lastly, the explanations of co-payments, co-insurance and other terms are removed, as they are addressed in the Uniform Glossary.
If finalized, the templates would apply to coverage that begins on or after Sept. 1, 2015.
Templates, Instructions, and Related Materials