Standardized Summary of Benefits required next year

Note from Reeve-  Note the 60 day in advance requirement, which is impossible, since of course the insurance carriers generally don’t give you the renewal until 45 days at the earliest.  I have no idea how clients can possible be expected to comply with this Health Care Reform requirement.  Perhaps the insurance companies will be required to give us the renewal at 90 days?  Was that laughter I hear?

The Affordable Care Act requires group health plans to provide a standardized 4-page summary of benefits beginning in 2012, and to provide updates to that summary no later than 60 days prior to the effective date of any changes made. By requiring coverage information in a standardized format, the reform allows consumers and plan participants to make direct comparisons between the coverage available under different policies or coverage options.

Proposed regulations were recently issued regarding the Summary of Benefits and Coverage (SBC), and guidance was also issued regarding a Uniform Glossary of Insurance Terms. The guidance addresses when, how and to whom the SBC must be distributed and provides templates, instructions and related materials to assist with the SBC and Uniform Glossary. Several gaps were left in the guidance, and comments on the regulations are requested by October 21, 2011; thus, we can expect further guidance to be issued.

Who Must Provide the SBC?

In general, for both grandfathered and non-grandfathered plans, the insurance carrier must provide the SBC for a fully insured group health plan and the plan administrator must provide it for a self-insured plan. In the fully insured context, the regulations discuss that the carrier would likely provide the SBC to the plan, which would then provide it to participants and beneficiaries. The SBC requirement applies jointly to plans and carriers, but the regulations provide that the requirement will be satisfied if either party provides a timely and otherwise compliant SBC.

Content of SBC

The regulations describe specific requirements for content, all of which are contained in the sample SBCs which can be found at www.dol.gov/ebsa/pdf/SBCtemplate.pdf and www.dol. gov/ebsa/pdf/SBCSampleCompleted.pdf. Uniform definitions, a description of the coverage, exceptions, renewability and coverage examples are some of the items that must be included. Note that, although the Affordable Care Act requires plans and insurers to include a statement in the SBC as to whether the plan or coverage provides minimum essential coverage, this statement will not be required in SBCs prior to January 1, 2014 since the individual mandate and related rules are not effective until such time. The SBC must be presented in a uniform format with print no smaller than 12-point font and must be no longer than four double-sided pages. It must also be provided in a “culturally and linguistically appropriate manner.” In general, this means that it must be provided in a non-English language upon request if 10% or more of the population residing in the county is literate only in the same non-English language.