The U.S. Departments of Labor, Health and Human Services and the Treasury have issued a set of frequently asked questions (FAQs) regarding the implementation of the Patient Protection and Affordable Care Act. This recent guidance, the ninth 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 is a summary of some of the issues addressed by the recent guidance.
New electronic disclosure safe harbor for SBCs. Under previous guidance, the agencies outlined several situations where an SBC may be provided electronically (see our April 2012 newsletter). Under this new guidance, the agencies further stipulated that an SBC may be distributed electronically to participants and beneficiaries in connection with their online enrollment or online renewal of coverage under the plan. SBCs may also be provided electronically to participants and beneficiaries who request an SBC online. In either case, the individual must have the option to receive a paper copy upon request.
The agencies will develop a calculator for assistance with coverage examples. The regulations require SBCs to include certain coverage examples to illustrate the costs associated with common coverage scenarios. The agencies are developing an online calculator that plans can use to complete the coverage examples. Plans will be able to input certain information, which the calculator will use to create a coverage example that can be used in the SBC. Once developed, the calculator will be posted on the resources page of the Center for Consumer Information & Insurance Oversight website.
Group health plans responsible for providing SBC information for carve-out arrangements. To provide a complete SBC, a plan administrator that uses two or more insurance products provided by separate insurers with respect to a single group health plan must synthesize the information into a single SBC. The plan administrator may contract with one of the insurers or other service providers to perform that function. However, unless it contracts otherwise, an insurer has no obligation to provide coverage information for benefits that it does not insure.
In recognition of the administrative challenge of synthesizing this information, for enforcement purposes, the agencies will allow plans that utilize multiple insurers to provide multiple partial SBCs that together provide all the relevant information to meet the SBC content requirements. In such circumstances, plan administrators should include a cover letter to indicate that the plan provides coverage using different insurers, and that individuals who would like assistance understanding how these products work together may contact the plan administrator for more information.
All of the FAQs on the new health care law can be found by clicking on the "FAQs" tab on the left side of the U.S. Department of Labor Employee Benefit Security Administration website, or may be accessed directly here