One of the new compliance burdens added by the Patient Protection and Affordable Care Act (“PPACA”) is the obligation to furnish participants in a group health plan with a Summary of Benefits and Coverage or “SBC.” The Summary of Benefits and Coverage is a 4-page summary of material provisions of a health plan in a uniform format, accompanied by a glossary of health coverage and medical terms.

On February 14, 2012, the Departments of Labor (“DOL”), Treasury and Health and Human Services issued joint final regulations on the obligation to distribute the Summary of Benefits and Coverage and specific guidance on preparing the SBC, including a template and required disclosure language. On March 19, 2012, the Departments also issued a set of frequently asked questions (“FAQs”), further clarifying the SBC rules.

The initial SBC must be distributed to participants and beneficiaries who enroll or re-enroll during an open enrollment period that begins on or after September 23, 2012. For newly hired employees and special enrollees who enroll in coverage other than during an open enrollment period, the SBC must be distributed on the first day of the plan year that begins on or after September 23, 2012 (January 1, 2013 for a calendar year plan).

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