On August 22, the federal Departments of Labor, Treasury and Health and Human Services issued proposed regulations requiring group health plan administrators and insurers to provide participants with a Summary of Benefits and Coverage (SBC) as of March 23, 2012. The SBC is a four-page summary required under the Patient Protection and Affordable Care Act, and is intended to provide the basis for comparisons between various group plans.
The purpose of the SBC is to allow healthcare consumers to make better decisions through the use of standardized descriptions of costs and benefits available through various plans. The SBC will use a standardized format, with common terms to describe plan features. It supplements but does not replace summary plan descriptions and summaries of material modifications.
For self-insured plans, the plan administrator will be responsible for distributing the SBC. For insured plans, either the administrator or the insurer can send the document. Each plan participant, plus each spouse and eligible dependant must receive the SBC along with application forms at the time of enrollment or renewal, and within seven days after requesting a copy. The insurer or plan administrator may issue the SBC for plan year 2012 enrollments before March 23, but in any case, the SBC must be sent out no later than that date.
The SBC may be issued electronically or by paper. The issuing agencies are accepting comments on the proposed rules through October 21. Plan sponsors should begin their responses to the SBC requirement now, including deciding who will be responsible for issuing the SBC, and when it will be distributed to plan participants. A description of the proposed rules and sample SBC formats can be found here.