The three agencies responsible for issuing guidance on the Affordable Care Act (ACA)—the U.S. Departments of Labor, Treasury, and Health and Human Services—have issued a new set of FAQs (frequently asked questions and answers) on the requirement to furnish summaries of benefits and coverage (SBCs) regarding group health plan coverage.

The FAQs address a few significant issues and a number of technical points that arose from the SBC guidance issued last month.

Perhaps most significantly, the FAQs offer no delay in the requirement to furnish SBCs. Plan sponsors will still need to provide employees with these forms by the first day of any open enrollment period that begins on or after September 23, 2012. New enrollees must receive SBCs by the first day of the first plan year that begins on or after September 23, 2012.

However, recognizing the difficulties posed by the short compliance period, the agencies have stated that they will assist, rather than penalize, plan sponsors who are working diligently and in good faith toward full compliance with the new rules.

For the actual preparation of the SBCs, the FAQs offer a number of items of useful guidance, including the following:

  • Multiple tiers may be addressed in a single SBC as long as the information is presented in an understandable manner. If self-only coverage is combined with other tiers, the examples should use the self-only tier and state that the SBC reflects only that tier.
  • Where a plan sponsor has contracted with a vendor to provide SBCs to participants (or to provide information necessary for the completion of the SBC), the plan sponsor will not, at least for now, be subject to penalties for failures by the vendor as long as the sponsor monitors the vendor's efforts, takes appropriate measures to correct problems, and notifies participants of any lapses.
  • The SBC must be provided for open enrollment periods, whether an individual is required to affirmatively elect health coverage or simply has the opportunity to change that coverage.
  • SBCs must be sent to qualified beneficiaries under COBRA.
  • Sample provisions are included that may be used to inform individuals that SBCs are posted on a website.
  • The requirement to notify individuals of language assistance services (in counties where at least 10 percent of the population is not literate in English, but is literate in a particular non-English language) may be satisfied by including the same statement recommended for such purposes in claim denials.
  • Plans do not need to include the header and footer on every page (as the template does), but may choose to include the header only on the first page and the footer only on the first and last page.
  • As long as the information in an SBC is understandable, minor adjustments to row or column size are permitted, information may rollover from one page to another, and certain other accommodations may be made.

The FAQs offer some flexibility with regard to formatting and content that plan sponsors will welcome, but plan sponsors will still need to be mindful of the space constraints imposed by the SBC requirements and the need to present information that can be easily understood.

As the federal health care reform effort gained steam, Ballard Spahr attorneys launched the Health Care Reform Initiative to monitor and analyze legislative developments. With federal health care reform now a reality, our attorneys are helping health care entities and employers understand the relevant changes and plan for the future. For more information on the SBC requirements or any aspect of the ACA, please contact Edward I. Leeds at 215.864.8419 or leeds@ballardspahr.com, or the Ballard Spahr attorney with whom you work.


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