Remember last summer when the weather was warm and sunny and you thought the SBC guidance was finalized? Surprise! Now there’s a sequel! In February 2016, federal agencies proposed a revised version of the Summary of Benefits and Coverage (SBC) template and its related documents. These revisions reflect changes announced in the final regulations released in June 2015 and recommended by stakeholders after further discussion and consumer testing.
The Affordable Care Act (ACA) requires all health plan issuers and sponsors (insured and self-funded) to provide an SBC to all individuals eligible for health coverage. For employers, this is typically done during open enrollment and shortly after a new hire. The SBC is a written document describing the benefits and coverage available under a health plan. It is intended to help individuals make apples-to-apples comparisons among health plan options and better understand and use their own coverage.
What Has Changed?
Many employees do not understand many of the common concepts that are a part of their health plans, such as deductibles, copayments and coinsurance. Therefore the new SBC template has added the following:
- Disclosure of which services are covered before the deductible applies
- Explanation of whether family coverage includes embedded deductibles or out-of-pocket (OOP) limits (where each family member must only meet a smaller individual deductible or OOP limit if the overall family deductible or OOP limit amount has not yet been met)
- Disclosure of information about tiered networks by responding to the question “Will you pay less if you use a network provider?”
As required by the final regulations, the proposed SBC revision includes information about whether the plan meets the ACA requirements for minimum essential coverage and minimum value, plus more explanation of what that means to an individual’s taxes. The proposed revision also adds a third coverage example for a simple fracture (the other two examples are focused on having a baby and managing type 2 diabetes) and provides clearer information on how cost sharing would apply to all three examples.
The instructions related to the proposed SBC template include new information about how to explain cost-sharing options, individual health accounts (FSAs, HRAs, HSAs), wellness programs and abortion coverage. The uniform glossary has been expanded in length by two pages and includes additional terms and revisions of several existing terms. Also, the proposal adds a requirement to underline terms used in the SBC that are defined in the uniform glossary. Plans and issuers providing an electronic SBC may hyperlink defined terms directly to the uniform glossary, ideally directly to the definition for that term in the uniform glossary.
The proposed SBC template revision is open for public comment until March 28, 2016. After that date, the federal agencies will review the comments and finalize the template and its related documents. According to recent guidance, plan sponsors and issuers will be expected to use the new template for the first open enrollment period on or after April 1, 2017. As a result, if an employer’s plan year starts at the beginning of January, the new SBC template must be distributed on the first day of the enrollment period before the beginning of the 2018 plan year.
Stay tuned! The sequel (final SBC template, instructions and glossary) to this sequel will be coming in the months ahead. We’ll let you know when it’s released.
Kelli Kolsrud, CEBS
Director, Information Services and Publications at the International Foundation