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Federal Government Standardizes Summaries of Benefits

09/23/11

  07:56:08 am, by MedBen5   , 439 words,  
Categories: News, Health Plan Management

Federal Government Standardizes Summaries of Benefits

On August 22, 2011, the federal government issued proposed regulations describing the Uniform Summary of Coverage document mandated under the Patient Protection and Affordable Care Act (PPACA). The proposed regulations set forth the requirements for preparing, distributing and maintaining the document for both self-funded plan participants, as well as those insured under traditional health insurance policies.

Beginning in March 2012, PPACA mandates that each individual seeking coverage or already covered by a health care plan be provided a standardized summary of benefits and coverage which can be used to uniformly compare health care plan offerings. The new document – now called a Summary of Benefits and Coverage, or SBC – is very specific as to design (including font type/size, defined terms, colors used) and content.

The summary must describe common features of the plan or policy, including premiums, deductibles and other cost sharing features, out-of-pocket limits, and general information about what is covered and not covered under the plan or policy. It must also include specific coverage examples showing how the plan or policy will pay claims for certain common medical conditions, including pregnancy, breast cancer and diabetes.

The SBC must be created and distributed in addition to any other summary documents required under law, such as summary plan descriptions, summary annual reports or certificates of coverage. A health plan or insurer that willfully fails to provide an SBC will be subject to a fine of $1,000 for each failure and also subject to the excise tax reporting requirements for group health plans ($100 per day under IRS Form 8928).

The federal government has also developed a list of standard plan terms and definitions to be used in connection with the SBC, which is referenced in the SBC itself. The SBC templates and the Uniform Glossary can be found at http://www.dol.gov/ebsa/healthreform.

The Affordable Care Act actually mandated that the templates and instructions for the new summary be available no later than March 2011, which provided health care plans and plan sponsors an entire year to prepare for implementation and distribution. Although the federal government did not provide guidance until August 2011, the date for health plan compliance remains the same – March 23, 2012. MedBen recognizes that the shortened time frame is extraordinarily problematic and is responding to the proposed regulation’s requirements by making formal Comment. All formal Comments on this proposed regulation are due to the Department of Labor no later than October 21, 2011.

MedBen will be providing more information to clients on the SBC and Uniform Glossary mandates in the near future. Clients with questions regarding this or any other Affordable Care Act issue may contact Vice President of Compliance Caroline Fraker at (800) 851-0907.

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