Most Not Ready for Required Summary of Benefits and Coverage

Employers are looking for alternatives to print distribution, including online portals

By SHRM Online staff February 9, 2012

Update: Final Rule Issued on Benefit Summaries
On Feb. 9, 2012, the Obama administration issued afinal 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.

While 81 percent of U.S. employers plan to update their health care Summary Plan Descriptions (SPDs) in 2012 to incorporate changes in plan design and new coverage requirements under the Patient Protection and Affordable Care Act (PPACA), they continue to wrestle with the cost and resource strain that come with executing SPD changes, according to a study by HighRoads, a health care compliance and benefits management firm.

Moreover, less than half of respondents expected to be ready to distribute a Summary of Benefits and Coverage (SBC) by the end of March 2012, the deadline for initial SBC production at the time of the survey. The deadline has since been extended to coincide with open enrollment for plan years beginning after Sept. 22, 2012; see the SHRM Online article "Administration Issues Final Rule on Summary of Benefits and Coverage."

Mid-size and large employers throughout the U.S., representing approximately 2.2 million health plan participants, responded to HighRoads' Third Annual SPD Trend Survey. Companies were asked specific questions about electronic communication of plan information under the PPACA and other required, time-sensitive communications.

SPD Distribution

Reducing printing and distribution costs remains a top concern. In addition to electronic delivery mechanisms (e-mail, online posting), employers reported using strategies such as:

Shifting to digital printing.

Bringing work in-house (including printing).

Competitive bidding (printing, distribution).

Issuing a Summary of Material Modifications where possible.

Asking vendors/providers to print and ship.

Using wrap documents.

Source: HighRoads' Third Annual SPD Trend Survey.

The study results show that more than 60 percent of respondents don’t know their average per-participant cost for creating, storing and distributing SPDs; 30 percent estimated they are spending between $10 and $20.

“Cost-containment was clearly top of mind for our respondents this year,” said Kim Buckey, HighRoads' SPD practice lead. “Employers are taking steps to reduce both the hard and ‘soft’ costs of producing SPDs, even if they don’t have a handle on how much they’re actually spending. Given the anticipated expense of producing the PPACA-required Summary of Benefits and Coverage and other required communications, this is no surprise,” she noted.

Key Findings

Other highlights from the survey:

Employers recognize that SPDs are a valuable source of information for employees.

The number of employers using electronic means (e-mail, posting to a portal or intranet, CD) to distribute required reports to employees continues to hover around 81 percent.

As employers continue to search for alternatives to print distribution, posting to a portal (with a note that a paper copy is available on request) was the preferred method, with 88 percent of respondents reporting that they took this approach for active nonunion employees.

“With the increased communications requirements of the PPACA and the U.S. Department of Labor’s retirement plan fee disclosure rules, employers need to take steps to reduce costs in every area," commented David O’Connell, principal analyst at Nucleus Research. "This means producing fewer documents, designing simpler documents, and using technology to reduce the costs of managing, maintaining and distributing content. Through increased automation, companies can achieve and document their compliance while reducing costs.”

“The PPACA places an increased focus on the importance of accurate, timely and easy-to-read communication documents,” added Thomas Barker, a partner at law firm Foley Hoag LLP and former general counsel at the U.S. Department of Health and Human Services. “All employers both large and small need to build in protective processes to ensure that they are ready to comply with new and changing requirements as the policies for the PPACA continue to become available.”

How do you intend to communicate 2012 health care reform changes to participants?

Will address in enrollment materials


Revising Summary Plan Descriptions


Issuing a Summary of Material Modifications


Creating new communication materials


Do not know yet


Source: HighRoads' Third Annual SPD Trend Survey.

Related Articles:

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

DOL Offers More Guidance on Electronic Fee Disclosure, SHRM Online Benefits Discipline, January 2012

Agencies Delay Deadline for Health Benefit Summaries, SHRM Online Benefits Discipline, November 2011

Preparation Steps for Summaries of Benefits and CoverageSHRM Online Benefits Discipline, October 2011

Get Ready for Summary of Benefits and Coverage RuleSHRM Online Benefits Discipline, September 2011

Proposed Rule Issued on Comparable Health Plan SummariesSHRM Online Benefits Discipline, August 2011

Quick Links:

SHRM Online Benefits Discipline

SHRM Online Health Care Reform Resource Page

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