Summary of Benefits and Coverage and the Uniform Glossary

Summary

The new standards relating to the Summary of Benefits and Coverage (SBC) for group health plans and health insurance issuers offering group or individual health insurance coverage are designed to provide improved information for consumers to better understand the coverage they have and allow them to compare their coverage options across different types of plans and insurance products. The final regulations regarding the SBC and the Uniform Glossary, issued jointly by the Departments of Health and Human Services, Labor and Treasury (the Agencies) on Feb. 9, 2012, require this information is presented in clear language and in a uniform format.

Summary of Benefits and Coverage and the Uniform Glossary

The Summary of Benefits and Coverage establishes standards that group health plan sponsors and insurers must use when offering group or individual health insurance.

The final regulation provides access to two key documents:

  1. The SBC, which provides a common format for describing the benefits and coverage under the applicable plan or coverage so consumers can compare plan benefits among and between carriers, and
  2. The Uniform Glossary, which provides standard definitions of terms commonly used in health insurance coverage. Together, these documents allow consumers to evaluate their health insurance choices and make better coverage decisions.

Regulations

An SBC must be provided in writing and free of charge under several different circumstances, such as upon application for coverage, by the first day of coverage, (if information in the SBC has changed), upon renewal or reissuance, and upon request.

The Affordable Care Act (the Act) requires that an SBC be provided to applicants, enrollees, and policyholders or certificate holders. Responsibility of the entity required to provide an SBC:

  • For delivery to an insured group health plan:

    The issuer.
  • For delivery to members of insured group plans:

    The health insurance issuer and the group health plan including the plan administrator as defined by ERISA.
  • For delivery to members of self-insured plans:

    The group health plan or designated administrator of the plan as defined under ERISA. There is no exemption for large or self-insured plans.

SBC Provided by Issuer to a Plan

A health insurance issuer must provide an SBC to an insured group health plan upon an application by the plan for coverage, as soon as practicable following receipt of the application, but in no event later than seven business days following receipt of the application.

If there is any change to the information required to be in the SBC before the first day of coverage, the issuer must update and provide a current SBC to the plan no later than the first day of coverage. The SBC must be provided upon request, as soon as practicable, but in no event later than seven business days.

The SBC must be provided upon renewal as follows:

  • Renewal when a reapplication is required:

    If written application materials are required for renewal, the SBC must be provided no later than the date on which the materials are distributed.
  • Automatic Renewal:

    The Final Rule requires that, in general, if renewal or reissuance of coverage does not require reapplication, the SBC must be provided no later than 30 days prior to the first day of the new plan or policy year. For insured coverage, there is flexibility with the 30 day rule when the terms of coverage are finalized in fewer than 30 days in advance of the new policy year.

SBC provided by Plan and/or Issuer to Participants and Beneficiaries

The Final Rule requires the issuer (for insured membership) and the group health plan to provide an SBC to participants and beneficiaries as part of written application materials or no later than the first date on which the participant is eligible to enroll if an application is not required. If there is any change to the information required to be in the SBC before the first day of coverage, an updated SBC must be provided no later than the first day of coverage. The SBC must be provided upon renewal and upon request, as described above. The Final Rule provides that "special enrollees" under HIPAA must be provided the SBC no later than when a summary plan description is required to be provided under the timeframe set by ERISA, which is 90 days from enrollment.

The Final Rule retains the requirement that the SBC be provided to both participants and beneficiaries, however it retains an anti-duplication rule under which a single SBC may be provided to a family unless any beneficiaries are known to reside at a different address.

SBC Content

The Agencies consulted with the National Association of Insurance Commissioners (NAIC) to develop standards for providing SBCs. The Final Rule outlines the required content elements for the SBC. These requirements include:

  • A description of the coverage (including the cost-sharing, for each category of benefits identified by the Departments)
  • The exceptions, reductions, or limitations on coverage
  • The cost-sharing provisions of the coverage, including deductible, coinsurance, and copayment obligations; including whether services are covered before the deductible and whether the plan has embedded or non-embedded deductibles or out-of-pocket limits
  • The renewability and continuation of coverage provisions
  • A coverage facts label or coverage examples (common benefits scenarios for having a baby (normal delivery), managing Type 2 diabetes, routine maintenance, well-controlled; simple fracture)
  • A statement that the SBC is only a summary and that the plan document, policy or certificate of insurance should be consulted to determine the governing contractual provisions of the coverage
  • A contact number to call with questions and an Internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained
  • An Internet address (or other contact information) for obtaining a list of the network providers, an Internet address where an individual may find more information about the prescription drug coverage under the plan or coverage, and an Internet address where an individual may review the Uniform Glossary, and a disclosure that paper copies of the Uniform Glossary are available
  • A uniform format, four double-sided pages in length, and 12-point font

Notice of Modification

The Act directs that a group health plan or insurance issuers (group or individual) provide notice of a material modification of coverage (as defined under ERISA section 102), at least 60 days in advance, if any of the changes in coverage are not reflected in the most recently provided SBC. The notice must be provided to enrollees (or, in the individual market, policyholders) no later than 60 days prior to the date on which such change will become effective, if it is not reflected in the most recent SBC provided, and occurs other than in connection with a renewal or reissuance of coverage.

This provision requires that plans and issuers provide at least 60 days advance notice of any material modification that would change the content of the SBC. This applies to mid-year changes only and does not affect changes made in connection with a renewal or reissuance. The notice of modification may consist of a new SBC or a specific notice detailing the change.

For More Information

Reform Guide SBC