On April 24, 2013, the Department of Labor ("DOL") posted its 14th set of frequently asked questions ("FAQs") addressing implementation of the Patient Protection and Affordable Care Act, as amended ("Affordable Care Act"). The new FAQs discuss and provide an updated Summary of Benefits and Coverage ("SBC") template to be used by group health plans and insurers to describe the coverage in effect for plan and policy years beginning on and after January 1, 2014.
The new SBC template, available here, now includes statements describing whether the plan or policy (i) provides "minimum essential coverage" and (ii) meets the "minimum value" standard. These terms are relevant for the purpose of determining whether and to what extent an employer shared responsibility (or "play or pay") penalty might apply, among other purposes (including, for example, the applicability of the individual shared responsibility penalty and the availability of subsidized exchange coverage for an individual). Specifically, the new entries on the SBC are:
Does this Coverage Provide Minimum Essential Coverage?
The Affordable Care Act requires most people to have health care coverage that qualifies as "minimum essential coverage." This plan or policy [does/does not] provide minimum essential coverage.
Does this Coverage Meet the Minimum Value Standard?
The Affordable Care Act establishes a minimum value standard of benefits of a health plan. The minimum value standard is 60% (actuarial value). This health coverage [does/does not] meet the minimum value standard for the benefits it provides.
Otherwise, the SBC template and the corresponding uniform glossary, available here, are unchanged.
As a reminder, the SBC is required to be distributed to participants and beneficiaries:
- as part of initial application materials for enrollment (and again by the first day of coverage, if there are changes to the information in the SBC between application and enrollment);
- as part of annual enrollment materials (or, if no annual enrollment is held, the SBC must be provided at least 30 days prior to the new plan or policy year, with some flexibility for an insured plan in the event of a late insurance policy issuance or renewal);
- to special enrollees, within 90 days of their special enrollment;
- at any time upon request, within seven business days of the request; and
- at least 60 days prior to the effective date of any mid-year material change to the benefits/coverage described in the SBC.
The SBCs may be distributed electronically if certain requirements are met—see Q1 in FAQs Part IX.
Be sure to include this SBC update in your ongoing Affordable Care Act implementation plans (for example, a calendar year group health plan will need to incorporate the update in the enrollment materials it prepares for distribution later in 2013, for coverage effective January 1, 2014).