Health Care Reform – UPDATE: Summary of Benefits and Coverage (SBC) Requirements

Summary of Benefits and Coverage (SBC) Requirements

Starting September 23, 2012 or soon after, health insurance issuers and group health plans will be required to provide an easy-to-understand summary about a health plan’s benefits and coverage. The new regulation is designed to help consumers better understand and evaluate their health insurance choices.

The new forms include:

A short, plain language Summary of Benefits and Coverage, or SBC

A uniform glossary of terms commonly used in health insurance coverage, such as "deductible" and "copayment"

An SBC must be provided:

Upon application. If a plan (including a self-insured group health plan) or an issuer distributes written application materials for enrollment, the SBC must be provided as part of those materials. For this purpose, written application materials include any forms or requests for information, in paper form or through a website or email, that must be completed for enrollment. If the plan or issuer does not distribute written application materials for enrollment (in either paper or electronic form), the SBC must be provided no later than the first date on which the participant is eligible to enroll in coverage.

By first day of coverage (if there are any changes). If there is any change in the information required to be in the SBC that was provided upon application and before the first day of coverage, the plan or issuer must update and provide a current SBC no later than the first day of coverage.

Special enrollees. The SBC must be provided to special enrollees no later than the date on which a summary plan description is required to be provided (90 days from enrollment).

Upon renewal. If a plan or issuer requires participants and beneficiaries to actively elect to maintain coverage during an open season, or provides them with the opportunity to change coverage options in an open season, the plan or issuer must provide the SBC at the same time it distributes open season materials. If there is no requirement to renew (sometimes referred to as an "evergreen" election), and no opportunity to change coverage options, renewal is considered to be automatic and the SBC must be provided no later than 30 days prior to the first day of the new plan or policy year.

Upon request. The SBC must be provided upon request for an SBC or summary information about the health coverage as soon as practicable but in no event later than seven business days following receipt of the request.

For more information go to:  www.dol.gov/ebsa/healthreform