Health Care Guidance Part One
March 28 , 2012
New Guidance Issues on
Health Care Reform
Summary of Benefits and Coverage
By: Stephanie Hicks
Recently, the Departments of Labor, Health and Human Services, and Treasury (the Departments) have issued additional guidance on the implementation of certain provisions of the Patient Protection and Affordable Care Act (PPACA).
Summary of Benefits and Coverage
PPACA created a new disclosure requirement for group health plans and issuers called a "summary of benefits and coverage" (SBC). On Feb. 14, 2012, the Departments published final regulations setting forth the required content, timing and appearance of the SBC. The final regulations also contain an SBC template and uniform glossary. In early March 2012, the Departments published corresponding FAQs that further explain the final regulations.
For participants and beneficiaries who enroll or re-enroll in group health coverage during open enrollment, the final regulations require that group health plans must provide an SBC, notice of modification and uniform glossary beginning the first day of the first open enrollment period that begins on or after Sept. 23, 2012. For participants and beneficiaries who enroll in group health plan coverage other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees), these final regulations apply beginning on the first day of the first plan year that begins on or after Sept. 23, 2012.
The final regulations reflect numerous small changes from the 2011 proposed regulations but retain the same basic structure and format. Changes include:
- SBC Template . The SBC template and uniform glossary included in the final regulations are approved only for coverage beginning before 2014 . Updated materials are expected to be prepared for later years to reflect whether the coverage provides "minimum essential coverage" and meets the "minimum value" requirements - concepts for which regulations are still being finalized.
- Coverage Examples . The coverage examples in the SBC (showing the amounts that would be paid by the group health plan and the patient in hypothetical situations) were revised. The coverage examples now only include having a baby by normal delivery and managing type-2 diabetes. The breast cancer example was deleted. The specific information necessary for group health plan issuers or plan administrators to simulate the group health plan's coverage for the examples (including relevant medical items and services, billing codes, allowed charges, etc.) will be posted on the Department of Health and Human Services (DHHS) and the Department of Labor (DOL) websites.
- Stand-Alone Document Unnecessary . The final regulations allow the SBC to be provided as either a stand-alone document or in combination with other summary materials (such as a summary plan description), provided that the SBC information is intact and prominently displayed at the beginning of the materials, and the timing requirements for distributing the SBC are met.
- Full SBC Template Must Be Used . The full SBC template must be used, even where group health plan terms cannot be described in a manner consistent with the template. In that case, the group health plan issuer or plan administrator is required to use best efforts to accurately describe the plan terms consistent with the template format.
- Non-English Language . The SBC and uniform glossary must be provided in a "culturally and linguistically appropriate manner." This generally means that participants living in counties where 10 percent or more of the population are literate only in the same non-English language are entitled to an SBC written in that non-English language. The DHHS and DOL plan to make available on their websites translations of the SBC template, sample language and uniform glossary in Spanish and various languages.
- Excepted Benefits . An SBC need not be provided for excepted benefits (e.g., stand-alone dental or vision plans or health flexible spending accounts if they constitute excepted benefits).
The final regulations can be found at:
The FAQs regarding the final regulations can be found at:
If you have any questions about health care reform and how it impacts your business, please contact Ed Hammond at