Frequent questions and answers for employers
The Affordable Care Act (ACA) requires that group and individual health plans provide a Summary of Benefits and Coverage (SBC) that follows a standard format.
If you sponsor one of our group health plans, we’ll give you the information you need. Then it’s your role to provide the SBC to employees. The requirements apply to both self-funded and insured plans.
The Department of Health and Human Services (HHS) published regulations in 2012 and 2015 to guide employers in creating accurate SBC documents. These standards cover what must be included and how to present the information. You can find the complete rules in the Federal Register.
We want to help you understand how to meet your obligation to provide accurate SBC documents to employees. Here are some general answers to commonly asked questions.
What are the general SBC standards?
The standards are designed to guide the construction of the SBC in appearance, language, form and contents.
An SBC must be presented in a “uniform format.” It may not exceed four pages in length. The print must be at least 12-point font. The final rule allows four double-sided pages.
An SBC must be presented in a way that is culturally appropriate for the intended audience. It must use language that the average plan enrollee can understand. The final rule requires that people be told they can get copies of the SBC in non-English languages. You must support requests for assistance in specific languages that are based on county-level census data.
An SBC can always be provided in paper form. It can be provided in electronic form if additional requirements are met. The final rule has varied requirements for electronic delivery depending on the market involved and whether or not the participant is enrolled in coverage now.
At a minimum, ACA requires an SBC to include:
- Uniform definitions of standard insurance and medical terms
- A description of the coverage, including:
- Cost sharing
- Exceptions, reductions and limitations on coverage
- Cost-sharing provisions, such as deductibles, copays and coinsurance
- How to renew or continue coverage
- Coverage examples
- A statement of whether the plan or coverage provides minimum essential coverage and minimum value, as defined by the ACA
- A statement that the outline is a summary and that the coverage document itself contains the controlling contract provisions
- A contact number that people can use to ask questions or obtain a copy of the plan document or policy
The final rule also specifies who should provide the SBC and when, and who should receive it.
When should the SBC be made available?
- When people apply
- After they enroll
- When they renew a plan
- When there’s a change during the plan year
- When they ask for a copy
Are plans and carriers required to distribute the uniform glossary?
Yes, under the final rule a plan or issuer would be required to make the uniform glossary available upon request. The uniform glossary is a standard document that must be provided in the form that was issued by HHS.
Does the requirement include a penalty for noncompliance?
Yes. Section 2715 of the Public Health Services Act (PHSA) allows for a $1,000 fine to be imposed for each willful failure to comply with the section. Such a fine can be imposed for each person enrolled in the plan. These penalties are in addition to other ACA penalties related to insurance market reform rules.
What if a health plan or issuer modifies the terms of the plan or coverage involved?
If a health plan or issuer makes any material change to the terms of the plan or coverage that is not reflected in the most recent SBC, it must notify enrollees of the change. This is called a Notice of Material Modification. Such notice must be given at least 60 days in advance. This can be a separate notice or an updated SBC. Renewing the plan does not trigger the requirement for notice if the plan has not changed.
Are expatriate plans required to provide SBCs under the SBC standards?
Expatriate plans are not specifically exempted from the SBC requirements. However, there is a special rule for coverage provided outside of the United States. The rule allows a plan or issuer to provide an Internet address (or similar contact information) for obtaining information about coverage or benefits instead of an SBC. But an SBC is still required if coverage or benefits are available within the United States.
Are there any special rules for plans that do not fit the SBC template?
Yes. The Guidance for Compliance and the SBC instructions provide for a special rule. This rule applies when a plan’s terms that must be included in the SBC cannot be reasonably described consistent with the template and the instructions. In this case, the plan or issuer must accurately describe the plan’s terms while using its best efforts to remain consistent with the instructions and template.