On April 23, 2013, the Departments of Labor, Health and Human Services, and the Treasury (the "Departments") issued the latest in a series of FAQs providing guidance on the Patient Protection and Affordable Care Act ("PPACA"). FAQs Part XIV provides an updated Summaries of Benefits and Coverage ("SBC") template and sample completed SBC with respect to the second year of applicability (coverage beginning on or after January 1, 2014, and before January 1, 2015).
New SBC Content Addresses Minimum Essential Coverage and Minimum Value
The only change to the updated SBC template is a requirement to include whether the plan meets the PPACA standards for "minimum essential coverage" and "minimum value" (see page 4 of the SBC template and page 6 of the sample completed SBC). Generally, any employer-sponsored group health plan that is not a HIPAA excepted benefit will be considered to provide minimum essential coverage. A plan provides minimum value if its share of the total allowed costs of benefits provided under the plan is not less than 60 percent of such costs.
Enforcement Relief Extended
The FAQs clarify that the Departments will not take any enforcement action against a plan that uses the prior template as long as a cover letter or similar disclosure is included with the template stating whether the plan provides minimum essential coverage and minimum value.
The FAQs further clarify that the Departments have made no changes to the SBC template for 2014 relating to PPACA’s requirement to eliminate all annual limits on the dollar value of essential health benefits. Additionally, the Departments have not added any required coverage examples for 2014.
The Departments have also extended numerous other safe harbors and enforcement relief relating to the SBC for the second year of applicability.
These recently issued FAQs make clear that the only change to the SBC template in the second year of applicability is that the SBC must now state whether the plan or coverage provides minimum essential coverage and whether it meets applicable minimum value requirements. This change is required for all SBCs issued for coverage beginning on or after January 1, 2014. Therefore, calendar-year plans will need to implement this change with the open enrollment period later this year for 2014 coverage.