Group health plans have a new addition to their arsenal of acronyms - the summary of benefits and coverage (“SBC”). The summary of benefits and coverage, a/k/a the uniform explanation of coverage, is a new disclosure requirement added by the Patient Protection and Affordable Care Act (“PPACA”) and applies to grandfathered and non-grandfathered group health plans. It is intended to provide a user-friendly basis on which participants canmake an “apples to apples” comparison of different health benefit plans.

As background, Section 2715 of the Public Health Service Act, added by PPACA and incorporated by reference into ERISA and the Internal Revenue Code, requires that every group health plan and every health insurance insurer offering group or individual health insurance coverage must provide applicants and enrollees with a 4-page uniform explanation of benefits and coverage. The statute contained a long list of information required to be included in the SBC and directed the Secretaries of Health and Human Services (“HHS”), Treasury and Labor to work with the National Association of Insurance Commissioners (“NAIC”) to develop the required form. The initial guidance was to be issued by March 23, 2011, and plans and issuers were required to distribute SBCs beginning on March 23, 2012.