The first question we have to answer is what in the world is an SBC? The acronym SBC stands for Summary of Benefits and Coverage. The new standards relating to the Summary of Benefits and Coverage (SBC) for group health plans and health insurance issuers offering group or individual health insurance coverage are designed to provide improved information for consumers to better understand the coverage they have and allow them to compare their coverage options across different types of plans and insurance products.
1. What are the requirements in connection with the SBC?
Group health plans are required to provide participants and beneficiaries (commonly known as your spouse and kids!), without charge, a document containing information about the plan coverage, as well as a glossary of terms commonly used in health insurance coverage, which will be helpful to most employees.
Additionally, notice of any material modification in any of the terms of the plan or coverage that is not reflected in the most recently provided SBC generally must be provided to enrollees at least 60 days before the effective date of the change. The SBC notice provided in connection with your group health plan coverage may be provided in combination with other summary materials (for example, a summary plan description or SPD).
2. Who is responsible for providing the notices?
An insured group health plan satisfies the requirement to provide an SBC if the issuer provides a timely and complete SBC to the participant or beneficiary. Don’t freak out!!! The insurance carrier should and will be providing the employer with the specific documentation to disperse to employees. The employer should be leaning on the health insurance broker/agent to help disseminate the actual forms. The forms will need to be verified that receipt was completed so the use of an online system should be quite adequate in this situation.
3. What information is required to be included in the SBC?
A complete list of required information is provided in the final rules. Some of the requirements include: uniform standard definitions of medical and health coverage terms; a description of the coverage and cost sharing requirements; and information regarding any coverage limitations or exceptions. The SBC also must include coverage examples, which illustrate sample medical situations and describe how much coverage the plan would provide in an event such as a broken leg or having a baby.
4. When is compliance required?
The new requirements apply with respect to participants and beneficiaries who enroll or re-enroll in group health coverage through an open enrollment period (including re-enrollees and late enrollees), beginning on the first day of the first open enrollment period that begins on or after Sept. 23, 2012. Health insurance carriers have already begun to send out notifications and hard copy letters to employer groups.
For disclosures to participants and beneficiaries who enroll in group health plan coverage other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees), the requirements apply beginning on the first day of the first plan year that begins on or after Sept. 23, 2012.
Hopefully that was helpful in breaking down a bit more about the actual SBC notification. This is coming and needs to be paid attention to as September is right around the corner!