November 21, 2011

Health Plans Get Reprieve from Immediate Need to Develop and Provide Uniform Summary of Benefits and Coverage

In the summer of 2011, the Departments of Labor, Treasury and Health and Human Services (HHS) released a long-awaited proposed rule and draft template of a new uniform Summary of Benefits and Coverage (SBC) required by the Affordable Care Act.1 The purpose of the new SBC is to allow individuals to easily compare health coverage options when shopping for or enrolling in group or individual health coverage. The proposed rule2 incorporated the Affordable Care Act’s requirement that health plans and health insurance issuers would start using the template beginning March 23, 2012, but requested comments on the feasibility of that time frame.3

Many plan sponsors expressed concern that the SBC was not appropriate for self-insured group health plans. Plan sponsors requested revisions to the form or a customized version for self-insured plans. Sponsors also commented that the SBC effective date should be delayed until some period of time after the final rules are published. Responding to the widespread concern about the compliance time frame, the Departments released an answer to a frequently asked question (FAQ) informing group health plans and insurance issuers that (1) compliance will not be required until the rules are issued in final form; and (2) the final rules will set out an applicability date that will give group health plans and insurance issuers sufficient time to comply.4

Plan sponsors may wish to continue to familiarize themselves with the draft template. They should also review existing plan documents, summary plan descriptions, and other publications to determine whether plan benefits are properly documented in those materials so that they can be easily transferred into a new SBC format.

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As with all issues involving the interpretation or application of laws and regulations, sponsors of group health plans should rely on their legal counsel for authoritative advice on the interpretation and application of the Affordable Care Act and related regulations. The Segal Company can be retained to work with plan sponsors and their attorneys on compliance issues and participant communications.

1
The Affordable Care Act is the shorthand name for the Patient Protection and Affordable Care Act (PPACA), Public Law No. 111-48, as modified by the subsequently enacted Health Care and Education Reconciliation Act (HCERA), Public Law No. 111-152. (Return to the Capital Checkup.)
2
This proposed rule was published in the August 22, 2011 Federal Register. A companion document, called a Solicitation of Comments, also published on
August 22, includes the actual draft template and instructions. The draft template and detailed instructions for completing it are also posted in full-page format on the Department of Labor’s website under “NAIC Documents". A fact sheet discussing the new template is on the healthcare.gov website. (Return to the Capital Checkup.)
3
For an overview of the August 22 proposal, see The Segal Company’s August 31, 2011 Capital Checkup, “Comments Requested on Draft Template for the Uniform Summary of Health Benefits.” (Return to the Capital Checkup.)
4
The answer to this FAQ is available on the DOL’s website. (Return to the Capital Checkup.)

Capital Checkup is The Segal Company's periodic electronic newsletter summarizing activity with respect to health care and related subjects. Capital Checkup is for informational purposes only and should not be construed as legal advice. It is not intended to provide guidance on current laws or pending legislation. On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their attorneys for legal advice.

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