Final SBC Guidance—The Sequel to the Sequel

Wow! That was fast! Less than a month ago, on March 28, 2016, to be exact, federal agencies closed the comment period for the proposed revision of the Summary of Benefits and Coverage (SBC) template and its related documents. On April 6, the government released the final version of the template.

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Based on the quick turnaround, it is not surprising to note that the final version of the template is very similar to the proposed version. Here are highlights of the changes:

  • In the coverage examples on the template, the cost-sharing language is more specific when copayments and coinsurance are applied to coverage.
  • The description of an embedded deductible has been clarified.
  • Each of the terms in the uniform glossary of terms has an independent web link so the key terms in electronic versions of the SBC can be linked directly to their definitions.
  • Coverage example calculators and their instructions have been updated.

Background

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.

[Related: Learn the fundamentals of health care plans and how to help consumers make the best choices for their unique situation by earning your Certificate in Health Plan Navigation.]

The current version of the SBC template was released in 2013 and has been in use since that time. SBC final regulations were released in June 2015, but various stakeholders recommended the template be subjected to further discussion and consumer testing before being finalized. This resulted in the release of the proposed new template on February 26, 2016.

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 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?”

[Related: Access a full library of ACA-focused webcasts, videos, articles, surveys and sample documents in ACA University—a free member service.]

As required by the final regulations, the final SBC template 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 final template 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 final SBC template include new information about how to explain cost-sharing options, individual health accounts (FSAs, HRAs and 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 new guidelines add 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 in the uniform glossary for that term.

When to Use the New Template

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, it will have until the new SBC template must be distributed on the first day of the enrollment period before the beginning of the 2018 plan year.

Is this the finale for the SBC template? It appears to be so for now. Rest assured if this production goes back to the editing room, we’ll keep you informed of any new releases.

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Kelli Kolsrud, CEBS
Kelli Kolsrud, CEBS
Director, Information Services and Publications at the International Foundation

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