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Final Rule Issued on Summary of Benefits and Coverage

Originally posted by Stephen Miller on June 16, 2015 on shrm.org.

The departments of Health and Human Services, Labor, and the Treasury issued a final rule regarding the health care Summary of Benefits and Coverage (SBC) and uniform glossary that must be provided to employees under the Affordable Care Act (ACA). The new rule was published in the Federal Register on June 16, 2015.

However, revisions to the SBC template and the uniform glossary included with the SBC, along with new coverage examples, are not anticipated to be finalized until January 2016, after the departments complete consumer testing and receive additional input from the public, including the National Association of Insurance Commissioners. The revisions will apply to SBCs for coverage beginning on or after Jan. 1, 2017.

The final regulation make few changes to the rule proposed in December 2014, which itself was a revision to an earlier final rule published in February 2012. However the new rule does include streamlined processes to help health insurance issuers and group health plans provide the required information to employees. For instance, it allows for avoiding unnecessary duplication when a group health plan uses a binding contractual arrangement in which another party assumes responsibility to provide the SBC. The rule also adopts the safe harbor for electronic delivery set forth in earlier FAQs.

“These clarifications will also make it easier for issuers and group health plans to provide the most accurate health coverage information to consumers,” according to a statement from the federal Centers for Medicare and Medicaid Studies, which also posted a fact sheet about the final rule.

SBC Requirements

In commentary on the final rule posted on the Health Affairs blog, Timothy Jost, a professor at the Washington and Lee University School of Law in Lexington, Va., noted that:

• A group health plan or group health insurer must offer participants and beneficiaries an SBC for each benefit package offered by the plan or insurer for which the participant or beneficiary is eligible.

• If the plan or insurer distributes application materials for plan enrollment, the SBC must be provided with the application materials.

• If the plan or insurer does not distribute application materials, the SBC must be provided no later than the first date on which a participant or beneficiary is eligible to enroll.

Under the new rule, health insurance issuers must also provide online access to a copy of the individual coverage policy for each plan or group certificate of coverage. And these documents must be made publicly available to all potential enrollees so that these individuals are clearly informed about what a plan will and will not offer.

“The SBC must include 12 elements under the statute and the 2012 rule,” Jost said. “The final rule does not address most of these elements, although the proposed template did and the final template is likely to do so.”

Also, the ACA requires that SBCs be presented in a uniform format not exceeding four pages in length, with a font size not smaller than 12 points. The federal departments interpreted the four-page requirement to mean four double-sided pages, or eight pages. “The departments indicated they will address the page length issue upon the publication of the final template,” Jost noted.