Notice & Disclosure Requirements:
Summary of Benefits and Coverage
Summary of Benefits and Coverage
The Affordable Care Act (ACA) requires health plans and health insurance issuers to provide a summary of benefits and coverage (SBC) to applicants and enrollees. The SBC is intended to be a short, simple explanation about the health plan’s benefits and coverage than can help consumers more easily compare plan options.
On April 23, 2013, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued Frequently Asked Questions (FAQs Part XIV) on the SBC requirement for the second year of its applicability. This guidance has been provided in addition to the final regulations issued on February 14, 2012 and three prior sets of FAQs related to the SBC rules (FAQs Parts VIII, IX and X).
The new FAQs address issues related to providing SBCs in the second year of applicability, including:
- Changes made to the templates for the SBC and the uniform glossary;
- Transition relief with respect to the minimum essential coverage and minimum value disclosure requirements;
- Extension of certain existing SBC safe harbors and other enforcement relief applicable for first year SBCs; and
- An “anti-duplication” rule for student health insurance coverage.
MODEL NOTICE
- An updated SBC template (and sample completed SBC) are now available on the Center for Consumer Information & Insurance Oversight (CCIIO) website and the DOL website. These documents are authorized for use with respect to group health plans and group and individual health insurance coverage for SBCs provided with respect to coverage beginning on or after January 1, 2014, and before January 1, 2015 (referred to in this document as “the second year of applicability”).
Overview of FAQs Part XIV
In conjunction with the final regulations issued on February 14, 2012, the Departments published a notice announcing the availability of templates, instructions and related materials for use in the first year of applicability (that is, for SBCs and the uniform glossary provided with respect to coverage beginning before January 1, 2014). However, these documents do not include language for the required statement in the SBC regarding:
- Whether a plan or coverage provides minimum essential coverage (MEC); and
- Whether the plan's or coverage's share of the total allowed costs of benefits provided under the plan or coverage meets applicable minimum value (MV) requirements.
When these documents were first released, the Departments stated that updated materials would be issued for later years. The FAQs Part XIV contain these updated materials that can be used in the second year of applicability. In the FAQs, the Departments explain the changes that have been made and how these documents can be used to comply with the SBC requirement.
