Summary of Benefits and Coverage Overview
The purpose of the Summary of Benefits and Coverage (SBC) is to provide individuals with standard information so they can compare medical plans as they make decisions about which plan to choose.
What are the Changes to the SBCs
The changes in the new SBC and instructions include, but are not limited to, the following:
▪ A new question identifying any services covered before the deductible is met
▪ A new instruction requiring the use of specific language to identify whether the plan has “embedded” or “non-embedded” deductibles or out of pocket maximums
▪ A new instruction requiring the use of specific language to identify whether the plan uses a tiered network to alert participants that costs for in-network services may vary depending on the tier of the physician or facility
▪ A new instruction requiring a list of certain “core” limitations, including when cost-sharing for in-network services does not count toward the out of pocket limit (for example, cost-sharing for in-network items or services that are not essential health benefits), prior authorization requirements, visit limits, or exclusion of a particular service category or substantial part of a service category
The new SBCs also includes a statement indicating whether the plan meets Minimum Essential Coverage (MEC) and Minimum Value (MV). However, many health insurance issuers and third-party administrators are already including these statements in the current SBCs issued to group health plans.
When do the new requirements go into effect?
The new requirements issued by the Department of Labor apply to all documents issued on or after April 1, 2017. All plans must comply with the new requirements as of the first day of open enrollment occurring on or after April 1, 2017.
What are the types of plans that must provide an SBC?
SBCs are required for Insured and self-insured group medical plans, regardless of grandfathered status.
Who issues the SBCs
The carrier or the TPA (if self-insured).
When must the SBC be provided to covered members
SBCs must be provided during each annual open enrollment.
An SBC may be provided in either paper or electronic format. It may be hand delivered or mailed. It may also be emailed or posted on the Internet after obtaining the individual’s agreement to receive the SBC electronically. If posted on the Internet, the individual must be notified about where the SBC is posted and that the SBC is available in paper form free of charge upon request.
Is there a penalty for non-compliance?
The penalty is up to $1,087 per failure to provide the SBC.
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