Agencies Issue Guidance On Summary Of Benefits & Coverage


This is the 23rd in a series of WorkCite articles concerning the Patient Protection and Affordable Care Act and its companion bill, the Health Care and Education Reconciliation Act of 2010 (referred to collectively as the Act). This WorkCite contains a discussion of a proposed regulation that addresses the requirement that plan sponsors provide a Summary of Benefits and Coverage (SBC) to participants and beneficiaries of employer-sponsored group health plans. The SBC rules have extensive coverage: they apply to both insured and self-insured plans, grandfathered and non-grandfathered, plans, and even to plans that are not covered by ERISA. A similar requirement is imposed on health insurance issuers when they receive an application or information request from a plan sponsor.

Effective Date

The good news: The effective date under the proposed rule is March 23, 2012; therefore, compliance is not required for the upcoming open enrollment season for the 2012 (calendar) plan year.

The bad news: As noted below, SBCs must be provided on request and in connection with mid-year HIPAA special enrollment dates. Therefore, all group plans must have SBCs in place by March 23, 2012. This head start of several months may not be sufficient to master this compliance hurdle.

MW Comment: Plan sponsors should waste no time in (i) evaluating required changes to plan administration, (ii) beginning discussions with service providers, and (iii) considering how they will share information about the process with the government agencies that jointly issued the proposed rules.


Following consultation with the National Association of Insurance Commissioners, the Departments of Labor (DOL), Treasury (IRS) and Health and Human Services (HHS) (collectively, the Departments) issued the proposed regulations to set forth standards for the design, content, and distribution of SBCs. While the concept of the SBC is undoubtedly a useful aid to the healthcare consumer, employers have expressed concern over the increased cost and burden of providing this new document in accordance with the lengthy and exacting requirements outlined in the proposed rule.

MW Comment: This may be the issue that pushes plan sponsors to speak up; the comment period for the proposed rule ends October 21, 2011. The Departments have invited comment on the practicality of the additional disclosure requirements (and their possible redundancy) in light of the many disclosure requirements already applicable to group health plans. Suggestions from plan sponsors as to methods of coordinating SBCs with the other materials already required to be provided by group health plans, such as summary plan descriptions (SPDs) and open enrollment materials, will be particularly helpful for this ongoing discussion with the Departments. Without substantive input from plan sponsors, the Departments will not be able to achieve their stated goal of balancing "effective...

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