What is this Summary of Benefits & Coverage (SBC)?

Video: The ABC’s of SBC’s

Starting September 23rd, the Summary of Benefits & Coverage (SBC) provision within the Patient Protection & Affordable Care Act (PPACA) requires that insurance carriers, employers and brokers provide standardized benefits disclosures to clients.

Given the significant penalties for noncompliance with this mandate, it is imperative that you understand the timelines and responsibilities that you are facing.
What is a Summary of Benefits & Coverage (SBC)?
A Summary of Benefits & Coverage (SBC) is a document specified in PPACA that standardizes and summarizes the benefits provided by an individual or employer group health plan.  The document must meet several standards for readability, accessibility to specified non-English language populations, and must use plain language and examples to provide recipients information they need to comprehend and compare their benefits.
It is accompanied by a glossary of terms called the Uniform Glossary.
Who is responsible for creating and distributing the SBC?
Creating the SBC document is generally the responsibility of the Insurer (carrier) for fully-insured group and individual health plans and the Insurer/Third Party Administrator (TPA) for self-insured health plans.  Distributing the SBC is generally the responsibility of the Insurer for individual plans, the Insurer and Employer for fully-insured group plans, and the Insurer and TPA for self-insured health plans.
To whom, and when does the SBC have to be provided?
The SBC requirement applies to all individual & employer group health plans, regardless of Grandfathered status under PPACA.  Each medical or health insurance plan offered must have its own SBC, with the notable exception of stand-alone dental or vision plans not integrated with a comprehensive medical or health plan and some integrated FSA, HRA, and HSA financial components.
The SBC must be provided to all plan participants, beneficiaries (dependents), special enrollees and prospective enrollees upon request or upon certain enrollment events and anniversaries.  If participants and beneficiaries/dependents reside at a single address, a single SBC may be distributed.
For Individual and Family Insurance Plans:
  * Applies to all applications/requests submitted after September 23rd, 2012.
  * Provided by the insurance carrier to the individual and beneficiaries directly.
  * Must be provided within 7 business days of a request or the application date.
 For Employer Group Insurance Plans:
  * Applies to all plans with a Plan Year beginning on or after 9/23/2012.
SBCs must be provided to all participants and beneficiaries who enroll or re-enroll through an open enrollment period (including re-enrollees and late enrollees) that begins on or after September 23rd, 2012.
SBCs must also be provided to participants and beneficiaries who enroll in coverage other than through an open enrollment period (including newly-eligible and special enrollees) on or after September 23rd, 2012.
  * Provided by the insurance carrier to the employer and/or broker (TPA for self-insured).
  * Must be provided within 7 business days of a request or the application date.
  * Must be provided to currently eligible employees with open enrollment materials (as applicable above) and 30 days prior to the policy year anniversary for auto-renewals.
  * Must be provided to new employees at enrollment (w/enrollment materials) as above.
  * Must be provided to special enrollees within 60 days of enrollment (due to event).
  * Other deadlines apply for mid-year changes and renewals with material changes.
Some examples of this requirement in application:

ABC Company, Inc.
Plan Year 9/1/2012 – 8/31/2013    No SBC required for existing/new EEs until 9/1/2013
 
ABC Company, Inc.
Plan Year 10/1/2012 – 9/31/2013  Plan year requirement met.
Open Enrollment held 9/22/2012  No SBCs required for Open Enrollments before 9/23
New Employee Hired 9/24/2012    SBC required for New Employee hired after 9/23
EE/Dep requests SBC 9/22/2012   No SBCs required for requests prior to 9/23
EE/Dep requests SBC 9/24/2012   SBCs required (7 days) for requests on/after 9/23 
 
ABC Company, Inc.
Plan Year 10/1/2012 – 9/31/2013  Plan year requirement met.
Open Enrollment held 9/24/2012  SBCs required for Open Enrollments on/after 9/23
New Employee Hired 9/24/2012    SBC required for New Employee hired after 9/23More information is available at www.healthcare.gov.If you have any questions about this legislation and its requirements, please contact your insurance broker.

We appreciate your business, and look forward to serving you!
Please be advised that this information is provided for informational use only, and does not constitute, nor should it be construed, as legal or tax advice.  The summaries and examples provided are for illustrative use only.  Please refer to the full text versions of 26 CFR § 54.9815-2715 and P.L. 111-148 § 2715 for further information.
SOURCE:  Black Gould & Associates

					
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