Guidance on SBC Requirements Provides Compliance Exceptions During First Year

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Three federal agencies said in guidance issued May 11 that they will not take enforcement action against health plan issuers and group health plans in a number of circumstances for failure to fully comply with requirements that they provide a standardized summary of benefits and coverage during the first year of applicability of the new rules.

The departments of Labor, Health and Human Services, and Treasury issued a set of 14 frequently-asked-questions and answers on implementation of the requirements under the 2010 federal health care reform law. In the FAQs, the agencies acknowledged the administrative difficulties for issuers and plans in some circumstances to provide such summaries.

In discussing a question about health plans that use two or more issuers to provide various types of coverage, the departments said issuers have no obligation to provide coverage information for benefits that it does not insure, but that group health plans “are responsible for providing complete SBCs with respect to a plan.”

However, the departments said, “due to the administrative challenges of combining benefit package information from multiple issuers,” during the first year of applicability of the new requirements, they would consider group health plans that use two or more issuers to have met the SBC content requirements if they provide “multiple partial SBCs that, together, provide all of the relevant information.”

The departments issued a final rule Feb. 9 under the Patient Protection and Affordable Care Act (Pub. L. No. 111-148) that requires health plan insurers and group health plans to provide a standardized, easy-to-understand summary of benefits and coverage for plans, as well as a uniform glossary of coverage terms for plan years beginning on or after Sept. 23 (63 BTM 50, 2/14/12).

The applicability date for disclosures to participants and beneficiaries who enroll or re-enroll in group health coverage through an open enrollment period is the first day of the first open enrollment period that begins on or after Sept. 23, according to the final rule.

The applicability date for disclosures to participants and beneficiaries who enroll in group health plan coverage other than through an open enrollment period is the first day of the first plan year that begins on or after Sept. 23, the final rule said.

For disclosures to plans, and to individuals and dependents in the individual market, the applicability date is Sept. 23.

Other Circumstances

The departments in the FAQs also acknowledged the difficulty plans or issuers with expatriate coverage face in complying with the requirements, saying that they will not take any enforcement action “against a group health plan or group health insurance issuer for failing to provide an SBC with respect to expatriate coverage during the first year of applicability.”

Another question asked whether health insurance issuers are required to provide summaries for insurance products that are no longer being offered for purchase.

The departments noted the “administrative complexities” of providing SBCs in such a circumstance, saying they will not take any enforcement action against a plan or issuer for failing to provide a summary before Sept. 23, 2013, for an insured product that is no longer being actively marketed, provided that an SBC is provided no later than that date.

More generally, the departments reiterated guidance from previous FAQs stating that any plans or issuers “that are working diligently and in good faith to comply” with the summary of benefits requirements will not face penalties during the first year of applicability.

Corrected Documents

The departments also said in the last of its answers that some earlier documents posted that relate to the SBC requirements reflected errors with regard to diabetes coverage.

The FAQs said that the departments were posting updated versions of a summary of benefits and coverage template, of the sample completed SBC, and of the diabetes treatment scenario to reflect the correction.


The FAQs are available at http://www.dol.gov/ebsa/faqs/faq-aca9.html. The corrected SBC template is available at http://www.dol.gov/ebsa/pdf/correctedsbctemplate.pdf. The sample completed SBC is at http://www.dol.gov/ebsa/pdf/CorrectedSampleCompletedSBC.pdf.