As we find ourselves in the midst of health care reform law we are faced with yet another acronym: SBC. This stands for Summary of Benefits and Coverage and this document actually began it’s formation on August 22, 2011 by the Departments of Labor, Treasury and Health and Human Services. On February 9, 2012 the departments released the final regulations outlining what the SBC has to include and look like as well as how everyone involved has to meet compliance. It was also determined that by September 23, 2012, SBC’s had to be provided to the insured by the issuer of the insurance.(1)
Basically, the SBC is supposed to be a short, easy-to-read document that helps participants better understand the terms of their coverage. It doesn’t replace any other documents that are already in place but is meant to help an employee who is currently enrolled in a group health plan better understand how their plan works, as well as helping those who are in the process of choosing which group health plan best suits their needs. The SBC clearly outlines the plan’s deductible, out-of-pocket costs and how common medical events would be processed under that plan. Along with explaining excluded services, a participant’s right to appeal and a Q&A section, the SBC could also include examples of what a participant pays verses what the plan pays if they had a baby or were managing type 2 diabetes while enrolled in the plan.
So, what does this mean to you?
Well, as mentioned above, the SBC applies to someone enrolled or eligible to enroll in their employer’s group plan so if you’ve got an individual plan that is not through your employer, this does not apply to you. While that may or may not be a relief, at least you can stop reading now.
However, if you are a participant in a group health plan through your employer then you should have received the SBC either directly from the insurance carrier or from your employer and hopefully it has helped you in understanding how your plan works. Should any changes be made to your group health plan, you will receive an updated SBC. If you have not received this document yet, talk to your employer as there are exceptions for certain plans and groups.
If you are a business owner who offers a group health plan to your employee’s then the distribution of the SBC becomes another part of your required compliance. The method of distribution varies with each insurance carrier but it is the responsibility of the employer to make sure that every eligible employee receives the SBC for the plan they are currently enrolled in or for every plan that they have access to. This can be done electronically or in paper format. Several insurance carriers are taking it upon themselves to mail out the SBC to every employer group as well as each enrolled participant. There are other carriers though, who are leaving the majority of the obligation up to the employer and simply making the SBC available to the employer electronically at a designated website. While it may pose as a bit cumbersome or timely, it is vital that as an employer, you take the task of distributing the SBC seriously because non-compliance could result in hefty fines.
Here at Sage Benefit Advisors we are working closely with employer groups to help them stay compliant within the changing regulations. If you have questions or concerns regarding your group health plan please feel free to contact us here.
For more information:
The final SBC regulations are available at: www.regulations.gov/#!documentDetail;D=HHS_FRDOC_0001-0442
FAQs on the SBC are available at: http://www.dol.gov/ebsa/healthreform/
Looking for group health insurance in Colorado? Contact us at 970.484.1250
References:
(1) Zywave, Inc.,Legislative Brief 53553 HCR Summary of Benefits and Coverage 080912