New Summary of Benefits Rule: The Devil is in the Details – Part I

 One of PPACA's new requirements is that a group health plan provides any eligible individuals with a summary of benefits and coverage (SBC).   

The federal agencies in charge of this requirement (HHS, DOL, and IRS) issued proposed regulations last fall, but there was much uncertainty about exactly when the new requirement would apply, among other things.  The agencies issued a final rule in February that answered some of these questions (although there still are a number of open issues).  77 Fed. Reg. 8668 (Feb. 14, 2012).  Below we answer some of the most frequently asked questions we have received.  

When must the SBC be provided?  

Generally, group health plans must provide SBCs at enrollment or application for coverage (including HIPAA special enrollees), by the first day of coverage if information has changed, upon renewal, and within 7 business days upon request.  Plans also must provide notice of any changes to the SBC at least 60 days in advance.  For current enrollees, plans only are required to provide the SBC at renewal for the option in which the individual is enrolled (although they can request other SBCs).    

The requirement begins as of January 1, 2013.  However, plans whose open enrollment starts on or after September 23, 2012 also must provide SBCs at this year’s open enrollment.  

What type of document must be provided?  

The SBC is a 4-page (double sided) summary of benefits under the plan.  Plans must use the template adopted by the agencies, which includes fill-in-the-blank boxes about types of benefits covered, deductibles, and other cost sharing.  The template and instructions, along with a sample completed SBC, can be found at  

Do plans have to include information about eligibility and premium amounts in the SBC?  

No – the SBC only requires information about benefits that are covered, including whether specific benefits are covered under the plan, exclusions, cost sharing, and annual limits.  There is no requirement to list (nor are there blank spaces for) premium amounts or eligibility information.  So, if a plan makes changes to eligibility or premium amounts mid-year, this would not impact the SBC. 

What is a Coverage Example?  

The SBC also includes two coverage examples – for diabetes and maternity care.  The agencies have provided fairly complex sample patient and claims information for someone with these types of claims, including diagnosis codes, dates, provider type, and allowed amounts.  Plans must "run these numbers" through their own claims systems to fill in the tables in the SBC template that explain what charges would be paid for this sample patient and his or her claims.  The idea is that individuals would be able to compare different plan options with respect to two specific claims (although the usefulness of this comparison is somewhat debatable since so many factors could go into why and how a claim is paid that is difficult to sum up in a single example).  Links to the sample claims information can be found at  Plans likely will need their insurer or TPA to help them complete the coverage example information (so the insurer/TPA can run the claim through its systems).  

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Plans should note when their first SBCs will be due (generally, depending on when their open enrollment starts, but no later than January 1, 2013).  Plans also should begin talking to their insurer or TPA now to make sure they have the necessary information to complete their SBCs.  


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You can find a handy list of Key Provisions of the Patient Protection and Affordable Care Act and their effective dates at     


Christy Tinnes is a Principal in the Health & Welfare Group of Groom Law Group in Washington, D.C.  She is involved in all aspects of health and welfare plans, including ERISA, HIPAA portability, HIPAA privacy, COBRA, and Medicare.  She represents employers designing health plans as well as insurers designing new products.  Most recently, she has been extensively involved in the insurance market reform and employer mandate provisions of the health-care reform legislation.  

Brigen Winters is a Principal at Groom Law Group, Chartered, where he co-chairs the firm's Policy and Legislation group. He counsels plan sponsors, insurers, and other financial institutions regarding health and welfare, executive compensation, and tax-qualified arrangements, and advises clients on legislative and regulatory matters, with a particular focus on the recently enacted health-reform legislation.  

PLEASE NOTE:  This feature is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.