The U.S. Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury have issued a set of frequently asked questions (FAQs) regarding the implementation of the Patient Protection and Affordable Care Act. This guidance, the eighth in a series of FAQs that the agencies have published, focuses on the Summary of Benefits and Coverage (SBC). The SBC is a new document that group health plans and insurance issuers will be required to provide to plan participants regarding their benefits. Below are some of the issues addressed by this recent guidance.
Plans must provide SBCs during the first open enrollment period on or after September 23, 2012.
Group health plans must provide an SBC to participants and beneficiaries who enroll or re-enroll through an open enrollment period, beginning on the first day of the first open enrollment period that begins on or after September 23, 2012. For participants and beneficiaries who enroll outside the open enrollment period (e.g., special enrollees or newly eligible individuals), the SBC must be provided beginning on the first day of the first plan year that begins on or after September 23, 2012.
No penalties during first year for plans working in good faith to comply.
The guidance reiterates the agencies’ position of emphasizing compliance assistance rather than the imposition of penalties. Consistent with this approach, the guidance provide that during the first year of applicability, the agencies will not impose penalties on plans that are working diligently and in good faith to provide the required SBC content in a manner consistent with the regulations.
No separate SBC for each tier of coverage.
If a group health plan offers different coverage tiers (e.g., employee-only, employee-plus-one, and family coverage), the plan may combine the information in a single SBC. In such circumstances, the coverage examples in the SBC should be completed using cost sharing for the employee-only tier, and the coverage examples should note this assumption.
Under certain circumstances, the SBC may be provided electronically.
For participants and beneficiaries who are eligible but not enrolled for coverage, an SBC may be provided electronically, if:
- The format is readily accessible (i.e., html, MS Word, or pdf format);
- Upon request, the SBC is provided in paper form free of charge; and
- If the SBC is provided through the Internet, the plan or issuer must provide the Internet address and, in a timely manner, must advise participants and beneficiaries that the SBC is available. Plans and issuers may make this disclosure by mail. The guidance provides sample language for this disclosure (referred to as an e-card or postcard).
For participants and beneficiaries who are covered under a plan, an SBC may be provided electronically, so long as the disclosure complies with DOL regulations. The DOL regulations contain a safe harbor for electronic disclosures for participants who have the ability to effectively access documents furnished in electronic form at any location where the participant is reasonably expected to perform duties as an employee and, with respect to whom, access to the employer’s electronic information system is an integral part of those duties. Other individuals may also opt into electronic delivery under the safe harbor.