About Summary of Benefits and Coverage documents
Beginning September 23, 2012, health insurers and group health plans will be required to provide a standard Summary of Benefits and Coverage (SBC) to people enrolling or re-enrolling in medical coverage through an open enrollment period. SBCs may be provided in either paper or electronic format.
How does this affect employers when they choose medical plans?
If an employer is introducing a new medical plan or renewing a plan, and distributing plan materials during the open enrollment period, they must distribute the SBC with other plan materials to employees.
If they do not distribute materials, employees still must receive an SBC no later than 30 days prior to the first day of the new policy year.
Who is responsible for providing the information?
For our fully insured plans, FCHP and the employer are responsible for producing and distributing the summaries. For self-insured plans, the responsibility falls upon the employer, however, FCHP will produce SBCs for our self-insured customers and assist with distribution to help meet the requirement.
What information is included in an SBC?
The SBC includes:
- a four page benefit summary
- information about cost sharing and exclusions
- coverage examples that estimate customer cost for two medical scenarios – having a baby and managing type 2 diabetes (the coverage examples are based on the employer’s specific plan design).
The SBC template has been supplied by the federal government to ensure all plans are using the same format for consumer comparison.
What is the timing for when SBCs need to be received?
Subscribers must receive their SBC:
- When shopping for coverage during an initial application
- When enrolling in coverage through an open enrollment period
- Upon the issuance of the policy at each new plan year
- Within seven business days of requesting a copy from their health insurer or group health plan
- If benefit changes are made before the coverage becomes effective, updated information must be provided.
Is the employer required to provide an SBC to all dependents over the age of 18?
If the employee and dependents all reside at one address, only one SBC must be provided for that address. However if the last known address of a dependent differs from the subscriber, then a separate SBC must be provided to the dependent.
What is the penalty for non-compliance with the SBC requirement?
The penalty for willful non-compliance is up to $1,000 per enrollee for each failure to comply.
Does information on Health Reimbursement Accounts (HRAs) need to be provided?
Yes. If you offer your employees an HRA, Summary of Benefits and Coverage documents must be supplied for that coverage. FCHP will issue the medical SBC and HRA vendors will issue the SBC for the health reimbursement account separately.