Exec Summary - Summary of Benefits & Coverage

Summary Benefits & Coverage
Who: All groups (includes both insured and self-insured group health plans) and individual plans. Specifically, group health plans, employers, and health insurers mustprovide applicants and enrollees information about the plans’ benefits and coverage.


When:  Beginning on the first day of the first open enrollment period that begins on or after September 23, 2012


What:  Provide participants and beneficiaries who enroll or re-enroll in group health coverage through an open enrollment period (including re-enrollees and late enrollees) a new Summary of Benefits and Coverage that includes:

·         A short, plain language Summary of Benefits and Coverage (SBC)


·         A uniform glossary of terms commonly used in health insurance coverage, such as "deductible" and "copayment."



All insurance companies and group health plans will use the same standard SBC form. Willful failure to provide this information will result in a not-more-than $1,000 fine for each failure.


Executive Summary:  Effective September 23, 2012 a new Summary of Benefits and Coverage (SBC) has been established under the requirements of PPACA.  An SBC will be required to be provided by: (1) a group health insurance issuer to a group health plan; (2) a group health insurance issuer and a group health plan to participants and beneficiaries; and (3) a health insurance issuer to individuals and dependents in the individual market.


In each case an SBC must be provided in 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.


There are a total of 12 required content elements, including uniform standard definitions of medical and health coverage terms, a description of the coverage including the cost sharing requirements such as deductibles, coinsurance, and co-payments; and information regarding any exceptions, reductions, or limitations under the coverage.  Also required are coverage examples, which illustrate benefits provided under the plan or coverage for common benefits scenarios.


In addition, the SBC must be presented in a uniform format that cannot exceed four double-sided pages in length, and must not include print smaller than 12-point font.


Actions:  Employers should check with their insurance brokers, agents, consultants, and insurers to prepare for development and distribution of the new Summary of Benefits and Coverage (SBC).


The information presented and contained within this article was submitted by Ronald E. Bachman, President & CEO of Healthcare Visions. This information is general information only, and does not, and is not intended to constitute legal advice. You should consult your legal advisors to determine the laws and regulations impacting your business. Any opinions expressed within this document are solely the opinion of the individual author.