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In response to the February 14, 2012 final rules and regulations
issued by the Labor Department regarding the summary of benefits
and coverage (SBC) provisions of Health Care Reform, the DOL, in
conjunction with Health and Human Services and the Treasury
Department issued a new set of 24 Frequently Asked Questions to
address some of the pertinent questions raised to date and to help
consumers, employers and individuals understand the new law.
Although a more detailed description is provided at the DOL website, the
following provides a brief summary of the highlights within the
FAQs.
Issue
Comments/FAQ Response
Effective Date (when to comply with the new
rules)
No extension of the generally applicable September 23 effective
date was provided, i.e., the SBC must be provided beginning on the
first day of the first open enrollment period that begins on or
after September 23, 2012; with any other enrollment, the SBC must
be provided beginning on the first day of the first plan year that
begins on or after September 23, 2012.
Enforcement vs. Assistance
The Departments will continue to take an "assistance"
framework (as opposed to imposing penalties) during the transition
as long as employers are making good faith efforts.
Coverage Tiers – Separate SBCs?
Plans and issuers are not required to provide a separate SBC for
each coverage tier (e.g., self-only coverage, employee-plus-one
coverage, family coverage) within a benefit package. This includes
arrangements where the participant is able to select the levels of
deductible, copayments, and co-insurance for a particular benefit
package (these can be presented as options and a model sample is
provided by the Departments).
Carve-Out Arrangements
A plan or issuer with a carve-out arrangement with a Pharmacy
Benefit Manager or other organization can delegate to that
organization the duty to provide the SBC, but the plan or issuer
remains responsible if the plan or issuer knows the SBC hasn't
been done properly.
How are FSA, HRA, HSA, and Wellness "Add-Ons"
handled?
FSA, HSA, HRA, Wellness and other similar benefit add-ons can be
described in the same SBC document used for the health plan.
Seven "Business Day" Rule (mailbox
rule)
The final regulation that requires the SBC to be provided in
certain circumstances within seven business days means that the SBC
be "sent" within seven business days, not
"received" within seven business days.
COBRA Qualified Beneficiary Implication
While a qualifying event does not itself trigger an SBC, during
an open enrollment period any COBRA qualified beneficiary who is
receiving COBRA coverage has the same rights to receive an SBC as a
similarly situated non-COBRA beneficiary.
What "triggers" the SBC
Requirement?
The Department sets forth guidance on providing an SBC
particularly 1) upon application; 2) by first day of coverage (if
there are any changes); 3) to special enrollees; 4) upon renewal;
and 5) upon request.
Electronic Delivery
With respect to group health plan coverage, an SBC may be
provided electronically:
by an issuer to a plan
by a plan or issuer to participants and beneficiaries who are
eligible but not enrolled for coverage (if the format is readily
accessible, it's provided in paper form free of charge upon
request and, if via an Internet posting, the issuer timely advises
the plan (or the plan or issuer timely advises the participants and
beneficiaries) that it's available on the Internet and provides
the Internet address), and
by a plan or issuer to participants and beneficiaries who are
covered under a plan in accordance with the DOL's disclosure
regulations.
Evergreen Website Postings
(e-card/postcard)
Model language is provided for postcards or emails about
evergreen website postings.
Culturally/Linguistically Appropriate
Manner
SBCs must include a sentence on the availability of language
assistance services (similar to claims appeal requirements).
Written SBC translations in Spanish, Chinese, Tagalog and Navajo
are available at cciio.cms.gov.
SPD Cross-Reference?
The SBC cannot simply cross-reference the terms of a Summary
Plan Description.
Grandfathered Notice
The SBC is not required to indicate the plan's grandfathered
status. However, a plan may voluntarily add such information if
desired.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Issues After The Election
