Benefits Buzz

SBC Update

Posted on April 11th, 2016

Originally posted on January 2, 2015 and updated on April 10, 2015, June 19, 2015 and April 11, 2016.
 
The Department of Labor (DOL), Department of Treasury (IRS) and Department of Health and Human Services (HHS) jointly issued proposed regulations as it relates to the Summary of Benefits and Coverage (SBC). The primary purpose of the guidance is to simplify the SBC and make it easier to understand. The guidance was made available to the public on December 22, 2014.
 
The proposed regulations would shorten the length of the SBC to 2.5 pages double-sided or 5 total pages. The SBC currently in use can be up to 4 pages double-sided or 8 total pages. The SBC would be shorter because it would no longer need to include information about annual or lifetime limits or exclusions for pre-existing conditions. An updated glossary of health coverage and medical terms would also need to be provided with the SBC.
 
The Department of Labor (DOL) had previously announced that a new Summary of Benefits and Coverage (SBC) template would be required for plan years on or after September 1, 2015. Their goal is to provide a more simplified template that is easier for consumers to understand and compare plans. In FAQs released on March 30, 2015, the DOL has now indicated the new template will not be available until January 2016 and will not need to be used until plan years beginning on or after April 1, 2017.
 
June 19, 2015 Update
Final regulations on the new SBC requirements were issued earlier this month and make very few changes to the proposed regulations which were released last December.  The final regulations confirm the new SBC template, which is supposed to be made available in early 2016, must be used for plan years on or after January 1, 2017. Additionally, the final regulations indicate that health insurance issuers must provide online access to copies of individual policies or group certificates.  These documents must be made publicly available to all potential customers so they have clear information about the terms of coverage.     
 
April 11, 2016 Update
The Department of Labor (DOL) recently published its newly proposed SBC template. The proposed template can be accessed here and may change based on public comment. The uniform glossary of medical terms that is to be provided with the SBC is also expected to see some revisions. The new SBC template and related glossary of medical terms are now not expected to be used until plan years beginning on or after April 1, 2017.   
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The materials contained within this communication are provided for informational purposes only and do not constitute legal or tax advice.

 

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