The new SBC guidance updates the proposed regulations, template and uniform glossary issued in August 2011, which were described in an earlier Sutherland Legal Alert. This Legal Alert highlights key SBC requirements that have been modified by the new guidance, including a welcome delay in the effective date, and it focuses on the rules for employer-sponsored group health plans, though the rules also apply to individual health insurance contracts.

Section 2715 of the Public Health Services Act (PHSA), as added by PPACA, directs the agencies to work with a National Association of Insurance Commissioners (NAIC) working group to develop standards for compiling a summary of benefits and coverage for enrollees in group and individual health plans. The purpose of the SBC is to provide plans, participants and beneficiaries with a concise, uniform summary of coverage options for comparative purposes. The summary must be no longer than four pages and use a font no smaller than 12 point. Also, it must be presented in a culturally and linguistically appropriate manner that utilizes terminology understandable by the average enrollee. The statute includes specific content standards for the summary, including uniform definitions of insurance and medical terms; detailed cost-sharing information; a description of the plan’s exceptions, reductions and limitations on coverage; coverage examples to illustrate common benefits scenarios; and information on whether the plan provides minimum essential coverage (as defined in section 5000A(f) of the Internal Revenue Code of 1986, as amended (Code)). Section 2715 of the PHSA further specifies that the agencies must issue rules implementing the SBC within one year after PPACA was enacted (i.e., March 23, 2011) and that plans and issuers must provide the SBC to participants and beneficiaries no later than 24 months after enactment (i.e., March 23, 2012).