Benefits and Compensation

Rules Attempt to Streamline ACA Benefits Summary

Proposed changes to the Summary of Benefits and Coverage rules under health care reform include additions and subtractions to the SBC template, as well as clarifications on how plan sponsors and insurers may apportion the responsibility to furnish the SBC to participants.

A third example would be added to the cost-sharing examples required in the SBC by the original, 2012 rules. The template also would be updated to reflect health care reform’s elimination of plan provisions such as annual dollar limits and pre-existing condition exclusions.

The rule proposed ending the safe harbor for SBCs that do not specify whether the health care reform’s standards for minimum essential coverage or minimum value are being met. However, other items were removed from the proposed template, reducing the SBC from four to two-and-a-half double-sided pages.

“Our goal is to improve consumers’ access to concise and comparable health plan information to help them better understand their coverage options,” said Marilyn Tavenner, administrator of HHS’ Centers for Medicare and Medicaid Services, in announcing the Dec. 22 proposal. The new rules would take effect for plan years beginning on or after Sept. 1, 2015.

Duplication Issues

The proposed rules also address duplication and delegation issues that arose in the group health plan context. An entity required to provide SBCs may contract with another party to do distribute them to participants, provided it monitors performance of the contract and:

  • if the entity learns that SBCs are not being provided as required, it “corrects the noncompliance as soon as practicable”; or
  • if the entity lacks the information needed to correct the noncompliance, it “communicates with participants and beneficiaries who are affected by the noncompliance regarding the noncompliance, and begins taking significant steps as soon as possible to avoid future violations.”

If a plan offers coverage from more than one insurer, the proposed rules would make the plan administrator provide a consolidated SBC for the plan. The administrator may contract with a single insurer (or other service provider) to furnish the SBC but “absent a contract to perform the function, an issuer has no obligation to provide an SBC containing information for benefits that it does not insure.”

However, DOL, HHS and Treasury would continue the safe harbor for plan administrators to either synthesize this information into a single SBC or provide multiple partial SBCs.

Comments on the proposed rules must be submitted within 60 days after their Dec. 30 publication. In addition to the rules themselves, the agencies made the proposed updated versions of these documents available for review:

  • the SBC template;
  • a sample completed SBC;
  • separate instructions for individual and group health coverage;
  • language to use in the “Why This Matters” column on the first page of the template;
  • the information needed to perform the coverage example calculations; and
  • the uniform glossary.

Section 2715 of the reform law called for for a concise, standard SBC to help individuals compare coverage options; DOL, HHS and Treasury issued implementing rules in February 2012 and have issued clarifying guidance on other occasions since.

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