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DOL Extends Safe Harbors for Summaries of Benefits and Coverage
Updated SBC template and sample completed SBC now available

By Ilyse Schuman © Littler Mendelson  4/25/2013

On April 23, 2013, the U.S. Department of Labor (DOL) posted its latest set of frequently asked questions. The new FAQs address issues related to the Patient Protection and Affordable Care Act’s requirement that health insurance issuers and group health plans provide participants and enrollees with a summary of benefits and coverage (SBC) describing the health plan’s covered benefits, cost-sharing provisions, coverage limitations and exceptions, and other key features.

Notably, the agency is extending for an additional year several safe harbors set forth in earlier sets of FAQs. The guidance lists the specific safe harbor provisions that will be extended, including those related to the circumstances in which an SBC may be provided electronically; penalties for failure to provide the SBC or uniform glossary; an issuer’s obligation to provide an SBC for benefits it does not insure; expatriate coverage; and the use of carve-out arrangements. The DOL is also extending until Sept. 24, 2014—provided certain conditions are met—the enforcement safe harbor applicable to insurance products that are no longer being offered for purchase.

The document notes it “supersedes any previous subregulatory guidance (including FAQs) stating that enforcement relief for the SBC and uniform glossary requirements is limited to the first year of applicability.”

Updated Template and Sample

In addition, the DOL has made available an updated SBC template and sample completed SBC to use for plan coverage beginning on or after Jan. 1, 2014, and before Jan. 1, 2015, which the DOL refers to as the “second year of applicability.” Although the updated templates include places to enter whether the plan or coverage provides minimal essential coverage (MEC) and minimum value (MV), the agencies charged with enforcing the SBC requirements will not require plans or issuers to use the new template for the second year of applicability so long as they provide a cover letter or disclosure statement with the SBC stating whether the plan provides MEC and MV. The new set of FAQs provides sample disclosure statements.

The first 13 sets of FAQs can be found here.

Ilyse Schuman is a shareholder in the Washington, D.C., office of Littler Mendelson. She provides strategic counsel and representation to clients on a broad array of workplace issues and developments in Congress and executive branch federal agencies. © 2013 Littler Mendelson. All rights reserved. Republished with permission.

Related SHRM Articles:

For Open Enrollment, Remember New Templates for SBCs, SHRM Online Benefits, August 2013

More Health Plan Communications Go Digital, SHRM Online Benefits, October 2012

Health Care Reform: What is the Summary of Benefits and Coverage, SHRM Templates and Tools, May 2012

Get Ready for Summary of Benefits and Coverage Rule, SHRM Online Benefits, updated February 2012

Administration Issues Final Rule on Summary of Benefits and Coverage, SHRM Online Benefits, February 2012

HR Should Review Summary of Benefits and Coverage Carefully, SHRM Online Legal Issues, February 2012

Related External Article:

FAQs Provide Details on SBCs for 2014, McGraw Wentworth, May 2013

Quick Links:

SHRM Online Benefits page

SHRM Online Health Care Reform Resource Page

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