New Guidance On Summary Of Benefits And Coverage Adds Safe Harbors

Just as employers have been advised to continue taking steps to ensure they are in compliance with the health reform law as it stands, even as we wait for the Supreme Court to weigh in on the law, federal agencies are not sitting on their hands either. On May 11, the Department of Labor’s Employee Benefits Security Administration, together with the Departments of Health and Human Services and the Treasury (the Departments), issued additional guidance in the form of 14 frequently asked questions (FAQs) for implementation of the Summary of Benefits and Coverage (SBC) requirement of the Patient Protection and Affordable Care Act (ACA). As discussed in previous posts here and here, starting on Sept. 23, 2012, health insurers and group health plans will be required to provide the SBC and the uniform glossary to consumers.

At the same time, the Department issued a corrected SBC template, a sample SBC, and a guide for coverage examples calculator for diabetes cases.

Among the issues the new set of FAQs address are the following:

1. Electronic provision of SBC—Safe harbors, certain electronic features. In addition to previously provided safe harbors, SBCs may be provided electronically in connection with online enrollment or renewal and to participants and beneficiaries who request the SBC online, as long as individuals have the option to receive a paper copy. In addition, the electronic SBC can include some electronic features such as scrolling and expansion of columns and the SBC can be displayed on a single webpage.

2. Circumstances that trigger the SBC provision requirement. For applicants in the individual market or for group health plan/sponsors, the SBC must be provided no later than seven business days after receiving a “substantially complete” application. When coverage terms are under negotiation after an application was filed and the SBC information changes, the revised SBC need only be provided again on the first day of coverage.

3. SBC must be provided upon request to group health plan or sponsor shopping for coverage.

4. Combining SBCs or SBC elements to allow comparison. This may be done, but the full SBC for all benefit packages still must be available as required by the final rules.

5. Application of penalties for violations. The Departments are focused on assisting employers and insurers to comply, rather than imposing penalties. In previously released FAQs, and again in this new set of FAQs, the Departments confirmed that during the first year of applicability, they “will not impose penalties on plans and issuers that are working diligently and in good faith to provide the required SBC content in an appearance that is consistent with the final regulations. The Departments intend to work with stakeholders over time to achieve maximum uniformity for consumers and certainty for the regulated community.”

The Departments also are developing calculators to use as safe harbors to complete coverage examples. Written translations of the SBC template are available in Spanish, Chinese, and Tagalog, and soon will be available in Navajo.

The high level of the Departments’ productivity issuing regulations and guidance to implement the ACA, give affected employers and insurers a head start to prepare.