On February 14, 2012 HHS, IRS and DOL released final rules implementing the Affordable Care Act’s requirement that group health plans and health insurance issuers provide participants with a summary of benefits and coverage (“SBC”) using uniform terms and definitions. The rules also discuss the requirement that participants be notified 60 days in advance of material modifications to the SBC. Under the Affordable Care Act the SBC requirement was to be effective March 23, 2012; however, because of the delay in issuing these rules the effective date has been postponed by the agencies until the first day of the health plan’s open enrollment period on or after September 23, 2012 for individuals who enroll through the plan’s open enrollment process and the first day of the plan year on or after September 23, 2012 for new hires and special enrollees. Below is a summary of the final rules and issues of interest to employers sponsoring a group health plan.

1. What is an SBC?

The SBC is a summary of the benefits offered under the group health plan provided in a relatively succinct manner (it can be no longer than 4 pages double-sided). It provides information regarding deductibles, co-payments, out of pocket maximums, limitations and exclusions, renewability and continuation options, and coverage examples. View the form templates created by the agencies. The SBC must be in this format. Note, the SBC does not need to contain premium or cost of coverage information.

The rules also provide a separate “uniform glossary” document which defines common health insurance terms which must be provided to individuals upon request.

2. Who must provide an SBC?

The SBC must be provided by employers who sponsor group health plans and health insurance issuers. There is no exception for state or local government plans, church plans, small employers, or grandfathered plans.

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