Update: Final Rule Issued on Benefit Summaries
On Feb. 9, 2012, the Obama administration issued a final rule requiring U.S. health insurers and group health plans to provide a concise and comprehensible Summary of Benefits and Coverage document to current and potential health plan participants, for plan years beginning after the fall 2012 open enrollment season. See the SHRM Online article Administration Issues Final Rule on Summary of Benefits and Coverage.
Three federal agencies announced in November 2011 via an online frequently asked question (FAQ) response that they will not require sponsors of group health plans to comply with the requirement to create and distribute to employees a uniform Summary of Benefits and Coverage (SBC) and Uniform Glossary beginning March 23, 2012, as they had originally proposed.
The U.S. departments of Labor, Treasury, and Health aned Human Services, the agencies responsible for implementing the Patient Protection and Affordable Care Act (PPACA), said that compliance with the SBC requirement will not be required until the agencies publish a final rule with a new applicability date providing sufficient time for group health plans to comply.
The PPACA amended the Public Health Service Act (PHS Act), adding section 2715 to require health insurers and group health plans to provide consumers with "clear, consistent and comparable information" about their health plan benefits and coverage. On Aug. 22, 2011, the departments issued a proposed rule and template in connection with implementation of the SBC and uniform glossary requirements (see the SHRM Online article "Proposed Rule Issued on Comparable Health Plan Summaries"). An applicability date “beginning March 23, 2012” was proposed. At the same time, the departments invited comments on a range of issues, including the timing of the application of the SBC requirement.
The departments received many critical comments on the proposed regulations and template (see the SHRM Online article "Proposed Health Benefit Summaries Called Onerous"). The departments said they intend to issue, "as soon as possible, a final rule that takes into account these comments and other stakeholder feedback."
"Many plan sponsors expressed concern that the SBC was not appropriate for self-insured group health plans," according to a Sibson Consulting alert on the department's announcement. "Plan sponsors requested revisions to the form or a customized version for self-insured plans. Sponsors also commented that the SBC effective date should be delayed until some period of time after the final rules are published," the alert stated.
According to the departments' announcement, "until final regulations are issued and applicable, plans and issuers are not required to comply with PHS Act section 2715." The announcement added, "It is anticipated that the departments’ final regulations, once issued, will include an applicability date that gives group health plans and health insurance issuers sufficient time to comply."
A Reprieve Gives More Time to Prepare
According to an alert from Sibson Consulting, although the SBC compliance deadline is no longer March 23, 2012, plan sponsors who want to get ready to prepare the SBC should:
• Identify which plans must provide an SBC and for which benefit packages. Sponsors of fully insured plans should discuss with their insurer who will provide the SBC to plan participants and beneficiaries and when.
• Review existing plan documents, summary plan descriptions and other documents (such as Summaries of Material Modifications) to determine whether plan benefits are properly documented in those materials so that they can be easily transferred into a new SBC format.
• Update plan documents and summary plan descriptions to reflect plan changes required by the health care reform law.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Preparation Steps for Summaries of Benefits and Coverage, SHRM Online Benefits Discipline, October 2011
Get Ready for Summary of Benefits and Coverage Rule, SHRM Online Benefits Discipline, September 2011
Proposed Rule Issued on Comparable Health Plan Summaries, SHRM Online Benefits Discipline, August 2011
SHRM Online Benefits DisciplineSHRM Online Health Care Reform Resource Page