The HR guide to Summary of Benefits and Coverage


Enrollment season this year will bring an added compliance requirement for employers, which is intended to help plan enrollees know exactly what they’re getting out of their policy.

Beginning on Sept. 23, 180 million Americans with private health insurance will need to be provided with two pieces of information. One is a Summary of Benefits and Coverage, or SBC, that clearly explains their health plan and allows them to compare different coverage options.

The other document will be a uniform glossary of terms commonly used in health insurance coverage.

“The [SBC] rules put special obligations on health insurance issuers and group health plans with respect to the presentation of these summaries and the glossary of terms that was required under the [Patient Protection and Affordable Care Act]. And these are intended to help plans and individuals better understand not only their health insurance coverage but also other coverage options that they might have available to them,” said James McElligott, a Richmond, Va., partner with law firm McGuireWoods, at a recent informational webinar assembled by Bloomberg BNA.

Experts agree the SBC mandate is unlikely to be struck down when the Supreme Court reaches a final decision on health reform in June. Unless, of course, the entire law is repealed.

Non-compliance with regulations could result in a civil penalty of up to $100 per day per affected individual; an excise tax of $100 per day per affected individual; and fines of up to $1,000 per affected individual for willful violations.

Luckily, notes McElligott, the law is not hard to understand.  “I found in working with the PPACA regulations that it’s often easiest just to use the electronic Code of Federal Regulations, which you can get online,” he said. “The actual regulations on the SBCs are not very long and they constitute about four pages, so they’re fairly readable.”

Still, as with any new regulation, there are certain details employers should review in order to ensure full compliance. The next few pages will guide you through the new SBC requirements, as well as provide additional details on the laws >

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