Agencies Propose Revised SBC Template and Uniform Glossary

Original post

The federal agencies overseeing the Affordable Care Act announced a 30-day comment period ending on March 28, 2016, regarding proposed revisions to the Summary of Benefits and Coverage (SBC) and related documents that employers must provide to eligible employees for each of their health plans, following the Feb. 26 publication of an official notice in the Federal Register.

The revisions could be effective for employer-provided plan years beginning with the second quarter of 2017.

On Feb. 25, the Departments of Labor (DOL), Treasury, and Health and Human Services (HHS) released the proposed revised SBC template and revised uniform glossary, along with revised instructions for group plans. Under the Affordable Care Act, SBCs and the uniform glossary must be given to new hires and to employees during open enrollment.

The agencies had issued a final rule regarding SBCs and related documents in June 2015. However, revisions to the SBC template and the uniform glossary were delayed to allow the agencies to complete consumer testing and receive additional input from the public and stakeholders.

Providing Plan Details

In an analysis posted at the Health Affairs Blog, Timothy Jost, a professor at the Washington and Lee University School of Law in Lexington, VA., noted that among the proposed changes the revised documents would:

Better identify services covered before the deductible applies.

Disclose whether the plan has “embedded” deductibles and out-of-pocket limits (under which enrollees in family coverage can meet individual deductibles or out-of-pocket limits before the family limits are met).

Disclose more information on tiered networks in relation to coverage of common medical events.

Though it may not provide the clarity employers and employees are looking for, "on the whole, the proposed revised SBC is a distinct improvement over the current SBC,” commented Jost.

Final Rule Issued on Summary of Benefits and Coverage

Originally posted by Stephen Miller on June 16, 2015 on

The departments of Health and Human Services, Labor, and the Treasury issued a final rule regarding the health care Summary of Benefits and Coverage (SBC) and uniform glossary that must be provided to employees under the Affordable Care Act (ACA). The new rule was published in the Federal Register on June 16, 2015.

However, revisions to the SBC template and the uniform glossary included with the SBC, along with new coverage examples, are not anticipated to be finalized until January 2016, after the departments complete consumer testing and receive additional input from the public, including the National Association of Insurance Commissioners. The revisions will apply to SBCs for coverage beginning on or after Jan. 1, 2017.

The final regulation make few changes to the rule proposed in December 2014, which itself was a revision to an earlier final rule published in February 2012. However the new rule does include streamlined processes to help health insurance issuers and group health plans provide the required information to employees. For instance, it allows for avoiding unnecessary duplication when a group health plan uses a binding contractual arrangement in which another party assumes responsibility to provide the SBC. The rule also adopts the safe harbor for electronic delivery set forth in earlier FAQs.

“These clarifications will also make it easier for issuers and group health plans to provide the most accurate health coverage information to consumers,” according to a statement from the federal Centers for Medicare and Medicaid Studies, which also posted a fact sheet about the final rule.

SBC Requirements

In commentary on the final rule posted on the Health Affairs blog, Timothy Jost, a professor at the Washington and Lee University School of Law in Lexington, Va., noted that:

• A group health plan or group health insurer must offer participants and beneficiaries an SBC for each benefit package offered by the plan or insurer for which the participant or beneficiary is eligible.

• If the plan or insurer distributes application materials for plan enrollment, the SBC must be provided with the application materials.

• If the plan or insurer does not distribute application materials, the SBC must be provided no later than the first date on which a participant or beneficiary is eligible to enroll.

Under the new rule, health insurance issuers must also provide online access to a copy of the individual coverage policy for each plan or group certificate of coverage. And these documents must be made publicly available to all potential enrollees so that these individuals are clearly informed about what a plan will and will not offer.

“The SBC must include 12 elements under the statute and the 2012 rule,” Jost said. “The final rule does not address most of these elements, although the proposed template did and the final template is likely to do so.”

Also, the ACA requires that SBCs be presented in a uniform format not exceeding four pages in length, with a font size not smaller than 12 points. The federal departments interpreted the four-page requirement to mean four double-sided pages, or eight pages. “The departments indicated they will address the page length issue upon the publication of the final template,” Jost noted.

Summary of Benefits and Coverage could wreak communication havoc

by Ed Bray

In a meeting talking about the upcoming healthcare reform requirements and it was time to present the Summary of Benefits and Coverage document, which will need to be distributed in the next few months. As part of my show-and-tell, I passed around the sample SBC that the Department of Labor posted on its website. The first reaction was, “This looks like the information you receive with a credit card approval letter [that no one reads].” As the ever-professional, I simply said, “yes, it’s pretty detailed” but on the inside I was saying something more like, “wasn’t the intent of this to make the communication of medical insurance coverage easier?”

Have you seen your SBC yet?  Here is the sample provided by the Department of Labor:

I’ll leave the judging to you but just a few comments about the SBC (or what the federal government refers to as the “easy-to-understand summary about a health plan’s benefits and coverage.”)

  • The SBC may not exceed four pages in length. Convincing employees to read four pages wouldn’t be so bad, right? But the regulations from February 12, 2012 contain two extra words that make a huge difference: “cannot exceed four double-sided pages.” (emphasis my own.) Eight pages of medical benefits stuff! Call in the employee engagement police! And just for kicks, the word count in the sample SBC is 2,671 words.
  • If you provide an annual health & welfare insurance benefits guide to employees (typically around open enrollment), you will most likely have your work cut out for you. Here’s why. There’s a good chance you include information about the company’s medical insurance plan options in that guide. So, will you continue to create that guide as is and offer the SBC along with it (causing employees to wonder why they are receiving two different sources of medical insurance information) or will you remove the medical insurance information from the guide and provide the SBC along with it (causing employees to wonder where the medical insurance information went and then why the medical insurance information in the SBC looks different than the rest of the health insurance information in the benefits guide) or something else? Any way you look at it, there is a good chance for some level of confusion when distributing the SBC in a population used to receiving a comprehensive health & welfare insurance benefits guide.
  • If you haven’t checked the list on this website published by The Center for Insurance Information & Insurance Oversight —  — you may want to, especially if you are developing your own SBCs. Section 2719 of the Public Health Service Act requires group health plans and health insurance issuers offering health insurance coverage to provide the SBC in a “culturally and linguistically appropriate manner.” Thus, if you operate in a county in which 10% or more of the population is literate in only the same non-English language, English versions of the SBCs must include a prominently displayed statement in the applicable non-English language indicating how to access the language services provided by the plan or issuer. Upon request, a written translation in the non-English language of applicable notices must be provided. The list on the website includes all of the counties which currently meet or exceed the 10% threshold. This list will be updated annually.

Summary of Benefits and Coverage and the Uniform Glossary

The Health Care Reform law requires plan sponsors to provide two new government-developed documents to plan participants. The "Summary of Benefits and Coverage" (SBC) and the "Uniform Glossary" are intended to provide high-level descriptions of a plan (and definitions of standard terms) and are in addition to the ERISA requirement to provide a Summary Plan Description (SPD). An SBC need not be provided for plans, policies, or benefits packages that constitute excepted benefits. If a plan sponsor intends to make any material modifications in coverage, such as increases in cost-sharing or benefit reductions, the law requires the sponsor to notify participants at least 60 days before the modifications become effective. Penalties for non-compliance are significant.

The federal agencies published final regulations and template versions of the SBC and Uniform Glossary on February 9, 2012. The final regulations are very similar to the proposed regulations. The templates were developed by the National Association of Insurance commissioners for insurance policies and the final regulations relaxed the requirement about completing the template "as is". If the 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 consistent with the instructions and template format as reasonably possible.". Plan sponsors (or their health insurance carriers) must begin distributing the SBC to participants and beneficiaries eligible to enroll in group health coverage through an open enrollment period beginning on the first day of the first open enrollment period that begins on or after September 23, 2012. For participants and beneficiaries who enroll in group health plan coverage other than through an open enrollment period, the requirements begin on the first day of the first plan year that begins on or after September 23, 2012. Distribution is required with enrollment materials, by the first day of coverage if there are changes since the enrollment, upon renewal, and upon request. An SBC may be distributed in paper or electronic form. The Uniform Glossary may also be distributed in paper or electronic form, but distribution is required only upon request. Click here to see a completed SBC template.