ACA Pathways: Final SBC Template Released for 2017
April 11, 2016
On April 6, 2016, the Departments of Labor (DOL) and Health and Human Services (HHS) issued the final revised template and related materials for use in preparing the summary of benefits and coverage (SBC) document. The SBC provides concise, simple and consistent information about health plan benefits and coverage. It is intended to help health plan consumers better understand the coverage they have and to help make easy comparisons of different options when shopping for new coverage.
Plans with annual open enrollment periods must start using the new template on the first day of the first open enrollment period that begins on or after April 1, 2017, with respect to coverage for plan or policy years beginning on or after that date. Plans without an annual open enrollment period must start using the new template on the first day of the first plan or policy year that begins on or after April 1, 2017.
The Affordable Care Act (ACA) requires both grandfathered and non-grandfathered health plans and health insurance issuers to provide an SBC to applicants and enrollees, free of charge. The final template is five pages (two and one-half double-sided pages) long, which is shorter than the current six-page version. The final template and instructions also differ from the current versions in the following ways:
- The revised SBC contains a new introductory paragraph, which provides information about the purpose and structure of the SBC. The introduction also links to the uniform glossary. In the introduction and throughout the SBC, terms defined in the uniform glossary are hyperlinked directly to the definitions in electronic versions of the SBC.
- The "Important Questions" section has been revised to include a question about services covered before the deductible is met. Questions about annual limits and services not covered have been deleted, although the SBC still includes information on services that are not covered in a separate section. Questions regarding out-of-pocket limits and network providers have been rephrased, with the goal of helping consumers better understand plan terms.
- The SBC contains information regarding continuation coverage and grievance and appeal rights. These disclosures have been revised in the updated template.
- The SBC also contains information on whether the plan provides minimum essential coverage (MEC) and minimum value (MV). This information must be provided as a "yes" or "no" answer, along with specific language regarding potential tax consequences for the individual.
- The SBC includes coverage examples that demonstrate the cost-sharing amounts an individual might be responsible for in three common medical situations. In addition to the current coverage examples that address diabetes care and childbirth, the updated template has a new coverage example that addresses coverage for a foot fracture, to provide information about what a plan covers in an emergency scenario. The page regarding assumptions and other information about the examples has been eliminated.
- The instructions provide additional information regarding permissible font types and margin adjustments, and note that the SBC must not exceed four double-sided pages. They retain the special rule that, to the extent that a plan's terms cannot reasonably be described in a manner consistent with the template and instructions, the plan or issuer must accurately describe the relevant plan terms while using its best efforts to do so in a manner that is still as consistent with the instructions and template format as reasonably possible.
- The instructions also provide additional flexibility under the special rule for combining information on different cost-sharing selections or add-ons to major medical coverage (such as health FSAs, HRAs, HSAs or wellness programs) in one SBC. The information must be understandable if it is combined.
Employer Action Steps
Employers should become familiar with the new template and related materials. Self-funded plan sponsors should ensure that they are using the new template on the appropriate effective date. Employers with insured plans should make sure the carrier is providing the correct version of the template once it is required.
For more information, including accessing links to the current and updated SBC templates, visit the DOL website at http://www.dol.gov/ebsa/healthreform/regulations/summaryofbenefits.html, or the HHS website at https://www.cms.gov/cciio/Resources/Forms-Reports-and-Other-Resources/.
For More Information
For more information about this ACA Pathways or about any other health care reform-related provisions, please contact your Burnham Benefits consultant or Burnham Benefits at:
This ACA Pathways is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. The information contained in this ACA Pathways includes emerging health care news from a limited perspective and does not encompass all views. The information was selected from a wide range of sources selected on the basis of their potential impact on employers and/or their employee benefit plans. For more information, please contact Burnham Benefits.
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