The Department of Labor, Health and Human Services and the Treasury collectively published new FAQs regarding the requirement to provide a summary of benefits and coverage (SBC) under the Affordable Care Act (ACA) (http://www.dol.gov/ebsa/faqs/faq-aca14.html#footnotes).
The FAQs include an updated SBC template and an updated sample completed SBC (available at cciio.cms.gov and www.dol.gov/ebsa/healthreform). It is noteworthy that the only change to the sample SBC is the addition of statements regarding whether the plan provides minimum essential coverage (MEC) (as defined in Section 5000A(f) of the Internal Revenue Code) and whether the plan meets the applicable minimum value (MV) requirements (i.e., the plan’s share of total allowed costs of benefits provided under the plan is not less than 60% of such costs).
The FAQs provide that no changes are being made to the uniform glossary or instructions to completing the SBC.
Takeaway: Plan sponsors should not need to spend time “reworking” their SBCs in connection with this new guidance if they were diligent in preparing their SBCs in the first year of applicability.
The FAQs also indicate that if a plan sponsor is already in the process of preparing its SBC for next year and it does not include the MEC and MV information in the SBC, it may provide information regarding whether the plan provides MEC and meets the applicable MV requirements in a cover letter.
Finally, the FAQs confirm that the agencies’ approach to compliance with ACA implementation is to work with employers to encourage compliance rather than to penalize employers who are working in good faith to comply with the ACA. In connection with that approach, some of the enforcement relief published in earlier FAQs is being extended for an additional year. This includes enforcement relief in connection with the electronic distribution of SBCs, the imposition of penalties for failing to provide SBCs, the provision of coverage examples, an issuer’s obligation to provide an SBC with respect to benefits it does not insure and enforcement regarding expatriate plans.