SECOND OPINIONS: New Summary of Benefits Rule – Part II
We previously wrote about one of PPACA's new requirements – that group health plans provide eligible individuals with a "summary of benefits and coverage (SBC).
The SBC template can be found at www.dol.gov/ebsa. Plans must provide the SBC at enrollment, by the first day of coverage if information has changed, upon renewal, and within 7 business days upon request. The requirement applies to open enrollments that begin on or after September 23, 2012 (and no later than January 1, 2013 for other types of delivery).
Below we continue to answer some of the most frequently asked questions we have received.
Which plans must provide an SBC?
The SBC requirements apply to "group health plans" as defined under the HIPAA portability rules. The SBC rules generally would apply to insured and self-funded (group and individual) medical plan options, including HMO coverage. The rules also would apply to EAPs, wellness programs, and health reimbursement arrangements (HRAs) unless these benefits are integrated into the medical plan.
The SBC rules would not apply to HIPAA excepted benefits, such as stand-alone dental and vision plans, flexible spending accounts (FSAs) that only include employee contributions, and on-site clinics. The SBC rules also would not apply to Health Savings Accounts (HSAs), but would apply to the underlying high deductible health plan option.
How many different SBCs must a plan provide?
This depends on how many plan options the plan offers. Plans likely will need a separate SBC for each option. For example, if a plan has a high deductible health plan option (that pairs with an HSA), a lower deductible PPO option, and HMO option, the plan likely will need three different SBCs. Some plans have different HMO options in different states, which all will probably need their own SBCs. Add to that any stand-alone EAP, HRA, or wellness programs. Plans will need to take inventory of all of their plan options to determine how many different SBCs to provide.
Plans also may need separate SBCs for each coverage tier – such as individual, spouse, and family coverage. Sometimes plan options can differ significantly based on this type of coverage tier (e.g., different deductibles, maximums, or other limits based on single or family coverage). Agency FAQs indicate that separate SBCs are not required for each coverage tier as long as the information for the various tiers can be combined and the SBC is still "understandable." For example, the plan may combine individual and family coverage tiers into a single SBC by adding to the fill-in-the-blank box for deductible information: "Individual - $500, Family - $1,000." However, if there are too many differences, it may be difficult to combine all of this information in the space provided in the template (and plans are required to use 12-point font). Plans will need to experiment with sample language to determine how many SBC actually will be needed for their particular plan options and coverage tiers.