Health Plan Administration: SBC Deadline Approaches – Are You Ready?

Beginning September 23, 2012, health insurers and plan administrators will be required to distribute a Summary of Benefits and Coverage (SBC) to all participants.

As its title suggests, the SBC is designed to describe benefits and coverage of a particular plan in clear language and a uniform format, and to help consumers better understand and compare their health coverage options.

What can you do now to prepare for implementation? Five things:

1. Download the template:

“The Departments have developed templates and samples of the SBC. The templates and samples are accessible on the Department of Health and Human Services’ website, along with instructions for completion.” (Health Care Reform – Summary of Benefits and Coverage Final Rule by Franczek Radelet P.C.)

2. Write the description of your plan(s):

“Generally, the SBCs will be required to summarize, in plain language, key features of the plan or coverage, including covered benefits, cost-sharing provisions, and coverage limitations and exceptions… [T]he SBC will also include coverage examples, a standardized health plan comparison tool akin to nutrition label information. The final rule requires only two, instead of three, coverage examples in the first year of applicability. These coverage examples will set forth the degree of coverage and costs associated with having a baby (normal delivery) and managing Type II diabetes.” (Agencies Issue Final Rule Regarding Summary of Benefits and Coverage by Littler)

3. Update your address books:

“The requirement to provide an SBC to participants and beneficiaries is met if the plan or issuer provides an SBC to the participant’s last known address. However, if the plan administrator knows that a beneficiary has an address that is different from the participant’s address, an SBC must be sent to the beneficiary’s last known address.” (PPACA Update : Summary of Benefits and Coverage for a Group Health Plan by Dickinson Wright)

4. Prepare copies of the uniform glossary:

“In conjunction with the final regulations, the agencies developed a uniform glossary containing definitions for certain insurance-related and medical terms, as well as other terms that will help enrollees and potential enrollees understand and compare the terms of coverage and the extent of the plan’s medical benefits… The issuer (if an insured plan) or the plan administrator (if self-insured) must provide a paper copy of the glossary within seven business days upon request.” (Agencies Issue Final Rules On Summary of Benefits for Health Plans and Insurance Coverage Under PPACA by Katten Muchin Rosenman LLP)

5. Translate your SBC (as appropriate):

“If 10 percent or more of the population residing in a claimant’s county are literate only in the same non-English language (as determined by Census Bureau data), the plan or issuer must provide the SBC in that language.” (Compensation & Benefits Insights: Departments Issue Final Summary of Benefits and Coverage Regulations and Clarifying FAQs by King & Spalding)

See also:

Find more on the Patient Protection and Affordable Care Act here>>