Proposed Changes for the Summary of Benefits and Coverage (SBC)

This is from CIGNA:

On December 22, 2014, the Departments of Health and Human Services (HHS), Labor and Treasury issued proposed regulations for changes to the Summary of Benefits and Coverage (SBC).

The proposed regulations clarify when and how a plan administrator or insurer must provide an SBC, shorten the SBC template, add a third cost example and revise the uniform glossary. The proposed regulations provide new information and also incorporate several FAQs that have been issued since the final SBC regulations were issued in 2012.

These proposed changes are effective for plan years and open enrollment periods beginning on or after September 1, 2015. Comments on the proposed regulations will be accepted until March 2, 2015, and are encouraged on many of the provisions.

New SBC Template

The new SBC template eliminates a significant amount of information that the Departments characterized as not being required by law and/or as having been identified through consumer testing as less useful for choosing coverage.

The sample completed SBC template for a standard group health plan has been reduced from four double-sided pages to two-and-a-half double-sided pages. Some of the other changes include:

·         An additional cost example for a simple foot fracture treated in an emergency room, which will be added to the two current examples. This new example is proposed as a health problem that any individual could experience, while the two current examples – having a baby and managing type 2 diabetes – affect only certain individuals.

·         The coverage example calculator will be authorized for continued use and updated claims and pricing data for the two existing examples and the third new example will be provided.

·         References to annual limits for essential health benefits (EHBs) and preexisting condition exclusions will be removed.

·         Information regarding minimum essential coverage (MEC) and minimum value (MV) has been revised and must be included in the SBC. This effectively ends a temporary enforcement safe harbor that previously permitted statements about MEC and MV to be included in a cover letter rather than in the SBC.

·         Premium information may be included in an SBC, but it is not required.

·         All SBCs must include an issuer website where the individual policy or group certificate of coverage can be reviewed and obtained. Plan administrators are not required to include a website separate from the issuer website.

·         SBCs for individual policies will be required to disclose whether abortion services are covered or excluded and whether coverage is limited to services for which federal funding is allowed.

Glossary Revisions

Revisions to the uniform glossary have also been proposed.  The glossary must be available to plan participants upon request. Some definitions have been changed and new medical terms such as claim, screening, referral and specialty drug have been added. Additional terms related to health care reform such as individual responsibility requirement, minimum value and cost-sharing reductions have also been added.

Paper vs. Electronic Distribution

SBCs may continue to be provided electronically to group plan participants in connection with their online enrollment or online renewal of coverage. SBCs may also be provided electronically to participants who request an SBC online. These individuals must also have the option to receive a paper copy upon request.

SBCs for self-insured non-federal government plans may continue to be provided electronically if the plan conforms to either the electronic distribution requirements that apply to ERISA plans or the rules that apply to individual health insurance coverage.

Types of Plans to Which SBCs Apply

The regulations confirm that SBCs are not required for expatriate health plans, Medicare Advantage plans or plans that qualify as excepted benefits. Excepted benefits include:

·         Employee Assistance Plans (EAPs) that meet the requirements to be excepted benefits

·         Health Savings Accounts (HSAs), because they are not group health plans

·         Dental and vision coverage that meet the requirements to be excepted benefits

SBCs are required for:

·         Health Reimbursement Arrangements (HRAs), because they are considered group health plans

·         Health Flexible Spending Accounts (FSAs) if they do not qualify as excepted benefits

Timing Requirements for Group Plans

·         If a plan sponsor is negotiating coverage terms after an application has been filed and the information in the SBC changes, the insurer is required to provide an updated SBC by the date the coverage becomes effective.

·         If a group health plan includes two or more insurance products provided by separate insurers, the group health plan administrator is responsible for providing one complete SBC. The administrator may contract with one of the insurers to provide the SBC.  Otherwise, an insurer is not obligated to provide an SBC for benefits it does not insure.

Timing Requirements for Individual Policies

·         If an individual has received an SBC before applying for coverage and there is a change to the information in the SBC, the insurer must provide a current SBC no later than seven business days after receipt of the application.

·         If an insurer automatically re-enrolls participants in a different plan, a new SBC is required to be provided consistent with the timing requirements that apply when a policy is renewed or reissued.

The new SBC template, a sample completed SBC, and additional information is available at the following links:



More complete information regarding timing and specific impacts to existing SBCs and processes will be provided after the final comment period and once final regulations are issued.  In the meantime, we will continue to evaluate and plan according to these proposed rules.