Labor Department Releases Set of FAQs On Summary of Benefits and Coverage

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By Kristen Ricaurte Knebel

Group health plan sponsors and issuers working in good faith to provide the standardized summary of benefits and coverage (SBC) required under the 2010 federal health care law will not face penalties during the first year of the requirements, according to guidance posted to the Labor Department's website March 19.

DOL's Employee Benefits Security Administration posted a set of 24 questions and answers on the summary of benefits and coverage, the eighth set of FAQs regarding implementation of the Patient Protection and Affordable Care Act. The guidance was prepared jointly with the departments of Treasury and Health and Human Services.

According to the guidance, plans and issuers are not required to generate separate summaries for each level of coverage within a benefit package. This allows plans to combine information for the different levels of coverage, such as self-only and family coverage, into one summary, as long as the appearance is easy to understand, the FAQs said.

Plans also do not need to provide a separate summary for every possible combination of benefits that an employee may choose, as long as the appearance of the SBC is understandable, the FAQs said.

On Feb. 9, DOL, HHS, and Treasury released a final rule stating that health plan insurers and group health plans must 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, 2012 (30 HRR 153, 2/13/12).

Electronic Summaries.

According to DOL, for group health plans, an SBC can be provided electronically by an issuer to a plan, or by a plan or issuer to participants and beneficiaries who are eligible but not enrolled for coverage. The SBC must be in a format that is easily accessible, and a paper copy of the SBC must be provided free of charge if requested, the FAQs said.

For a plan beneficiary or participant already enrolled in coverage, the SBC can be provided electronically under a safe harbor allowing for such disclosure to participants who are able to access electronic documents at any location where they are expected to perform the duties of their job.

Other issues regarding the SBC that the departments covered include:

• the SBC must be sent within seven business days of certain triggers, but does not need to be received within those seven days;

• plans and issuers must provide an SBC to Consolidated Omnibus Budget Reconciliation Act-qualified beneficiaries;

• plans can add premium information to the SBC if they so desire;

• the SBC can reflect the coverage period for the entire group plan;

• issuers and plans are permitted to make minor adjustments to the format of the SBC;

• bar codes and control numbers can be added to the SBC; and

• the SBC is not required to state whether the plan has grandfather status.

Benefits Council 'Disappointed.'

American Benefits Council President James A. Klein in a March 19 statement said he is disappointed that the FAQs did not provide employers with more time to comply with the SBC regulations.

“Disclosure and communications regarding health benefits are an important component of benefit plan administration and design,” he said. “But while the federal government gave itself the extra time needed to craft the rules, employers and their administrative partners must now work double-time to perform the more difficult job of implementing these standards in the next six months.”

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