Agencies Propose Revised SBC Template and Glossary

Changes to Summary of Benefits and Coverage (SBC) meant to provide clarity

By Stephen Miller, CEBS Mar 1, 2016

The federal agencies overseeing the Affordable Care Act announced a 30-day comment period ending on March 28, 2016, regarding proposed revisions to the Summary of Benefits and Coverage (SBC) and related documents that employers must provide to eligible employees for each of their health plans, following the Feb. 26 publication of an official notice in the Federal Register.

On Feb. 25, the Departments of Labor (DOL), Treasury, and Health and Human Services (HHS) released the proposed revised SBC template and revised uniform glossary, along with revised instructions for group plans. Under the Affordable Care Act, SBCs and the uniform glossary must be given to new hires and to employees during open enrollment.

The agencies had issued a final rule regarding SBCs and related documents in June 2015. However, revisions to the SBC template and the uniform glossary were delayed to allow the agencies to complete consumer testing and receive additional input from the public and stakeholders.

Providing Plan Details

In an analysis posted at the Health Affairs Blog, Timothy Jost, a professor at the Washington and Lee University School of Law in Lexington, Va,. noted that among the proposed changes the revised documents would:

  • Better identify services covered before the deductible applies.

  • Disclose whether the plan has “embedded” deductibles and out-of-pocket limits (under which enrollees in family coverage can meet individual deductibles or out-of-pocket limits before the family limits are met).

  • Disclose more information on tiered networks in relation to coverage of common medical events.

“On the whole, the proposed revised SBC is a distinct improvement over the current SBC,” commented Jost.

Implementation Timeline

According to FAQs posted on the DOL's website:

After the close of the public comment period on March 28, 2016...the departments intend to review the comments and finalize the new SBC template and associated documents expeditiously.

The departments intend that health plans and issuers that maintain an annual open enrollment period will be required to use the new SBC template and associated documents beginning on the first day of the first open enrollment period that begins on or after April 1, 2017 with respect to coverage for plan years...beginning on or after that date.

Consequently, most employers, who have plan years that begin on the first day of the year, will have until Jan. 1, 2018, to distribute the new SBCs—giving them and their plan administrators time to make adjustments to their current SBCs.

Not So Straightforward

“The requirement to provide SBCs, which were intended to be straightforward, simple four-page double-sided documents, has caused a lot of cost and complexity for employers and payers alike,” said Kim Buckey, vice president of compliance communications at Birmingham, Ala.-based DirectPath, an employee engagement and health care compliance firm.

As high-deductible plans have become more prevalent, “there has been an assumption by employers that employees just get it. But as the tri-agencies [DOL, Treasury and HHS] found as they were working on this year’s proposed SBC revisions, that level of consumerism really isn’t out there,” Buckey told SHRM Online.

While the proposed SBC revisions are aimed at providing greater clarity, increased documentation will not, by itself, solve employee confusion, Buckey said. “Employees don’t understand even basic concept like deductibles, co-insurance and co-pays. So expecting them to make an educated choice on whether to go with a high-deductible plan or not, and to understand how to use that plan—and how to use it cost-effectively—there’s still a piece missing there, which is robust communications support” from employers, she noted.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow me on Twitter.

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