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Proposed Regulations for Summary of Benefits and Coverage Seek to Simplify Compliance

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As part of Health Care Reform, employers and insurers are required to provide group health plan participants with a Summary of Benefits and Coverage (“SBC”) describing the important features of the group health plan option(s) offered by the employer/insurer.  The SBC is also intended to provide participants a way to easily compare different group health plan options.  The current rules for complying with the SBC requirement were viewed by some as not being “user-friendly.”  On December 22, 2014, the DOL, HHS and Treasury released proposed guidance that is designed “to improve consumer access to important plan information so that [the consumers] can make more informed choices.”

The proposed regulations suggest the following changes/additions:

•  A new coverage example regarding a foot fracture and emergency room visit would be added to the existing coverage examples of “having a baby” and “managing type 2 diabetes.”  These coverage examples have been shown to be helpful in a participant’s understanding of how their coverage works.

•  The SBC templates would be shortened from 4 double-sided pages to 2 1/2 double sided pages in order to remove information that has been identified as not useful to consumers.  The templates would also be revised to reflect reforms under the Health Care Reform.  For example, references to annual limits for essential health benefits and pre-existing condition exclusions would be removed.  You can see the proposed revised templates here.

•  The Uniform Glossary would also be revised to add certain definitions that are relevant under the Health Care Reform.

•  The SBC would have to provide information related to coverage for an abortion.

 The changes described in the proposed regulations would apply to SBCs used for enrollment or re-enrollment in group health plan coverage beginning on the first day of the first open enrollment period that begins on or after September 1, 2015.

For more information, see the fact sheet and the proposed regulations here.