FAQs Make Few Changes to Summaries, Extend ACA Safe Harbors Through 2014

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By Kristen Ricaurte Knebel

The departments of Labor, Treasury, and Health and Human Services April 23 jointly issued new frequently asked questions and answers on the second-year presentation of the summary of benefits and coverage (SBC) required of group health plans and individual coverage by the Affordable Care Act.

The FAQs Part XIV, posted to the website of DOL's Employee Benefits Security Administration, include guidance for plans after Jan. 1, 2014, and before Jan. 1, 2015, on disclosing whether a plan or individual coverage “provides minimum essential coverage (MEC) and whether the plan's or coverage's share of the total allowed costs of benefits provided under the plan or coverage meets applicable minimum value (MV) requirements.”

Sample templates and examples of completed templates also are available on the DOL website.

Alden J. Bianchi, an attorney in the Boston office of Mintz Levin Cohn Ferris Glovsky & Popeo, told BNA April 24 that health plan insurers and group health plans providing a standardized summary of benefits and coverage for participants and beneficiaries will not need to implement significant changes in their second year of disclosures.

The guidance “is significant for what it does not do: It does not make any major changes to the summaries of benefits and coverage requirements for 2014. … No changes were made to the glossary, the Instructions for Completing the SBC, the 'Why This Matters' language, or the coverage examples,” he said. “The only change of any note is the addition of statements concerning whether the employer's plan provides minimum essential coverage and/or minimum value.”

The answer to Question 2 allows plans unable to modify their SBC templates for the second year of disclosures to use the template that DOL, Treasury, and HHS jointly authorized for the first year of SBCs and states that the agencies will not take enforcement action against those plans.

Plans unable to modify their SBC templates must provide a cover letter stating whether the plan provides minimum essential coverage and whether “the plan's or coverage's share of the total allowed costs of benefits provided under the plan or coverage does or does not meet the [minimum value] requirement” under the ACA, the FAQs said.

Helen H. Morrison, a principal in the national tax department at Ernst & Young in Washington, D.C., told BNA April 24: “Employers should be relieved that the FAQs extend the safe harbors and enforcement relief that was provided in prior FAQs.”

“In addition, employers should be particularly comforted that they will not be required to add a new data element to the SBC beginning in 2014 and instead can state in a cover letter or other disclosure whether they offer minimum essential coverage and whether the employer-sponsored coverage meets the minimum value standard.”

No Added Coverage Examples

Kathryn Wilber, senior counsel for health policy at the American Benefits Council in Washington, D.C., told BNA April 24 that the FAQs contained helpful guidance, specifically the provision not requiring plans to provide more coverage examples to employees for the 2014 plan year.

“They're generally welcome updates, particularly with respect to additional coverage examples not being required for 2014, which would have meant some significant administrative work. That's welcome, as well as the recognition that where additional information is being required on the SBCs that plans may have already moved ahead in their processes and there provided some relief,” Wilber said.

According to the Question 4 answer, DOL, HHS, and Treasury “believe it is prudent to maintain the current coverage examples … to help transition to new market changes in 2014.”

Because of this, “additional coverage examples are not required as part of the SBC at this time. As with the SBC authorized for the first year of applicability, the documents authorized for the second year of applicability continue to require the same two coverage examples authorized for the first year of applicability--having a baby (normal delivery) and managing type 2 diabetes (routine maintenance of a well-controlled condition),” the FAQs said.

The FAQs extend many safe harbors and other relief related to providing an SBC, the guidance said.

By Kristen Ricaurte Knebel  


Text of ACA XIV is available at http://www.dol.gov/ebsa/faqs/faq-aca14.html. The sample templates are available at http://op.bna.com/dlrcases.nsf/r?Open=kpin-974tk6. The examples of completed templates are available at http://op.bna.com/dlrcases.nsf/r?Open=kpin-974tkp.