HHS Issues Clarifications and Corrected Templates for Summary of Benefits and Coverage

May 15, 2012

On May 11, 2012, the Departments of Labor (DOL), HHS and Treasury (collectively, “the Departments”) issued a set of 14 Frequently Asked Questions (FAQs) regarding implementation of the Summary of Benefits and Coverage (SBC).

The goal of the SBC is to help consumers understand and evaluate their health insurance choices by providing a “simple,” consistent document that outlines benefits and coverage in plain language.

The FAQs and accompanying guidance provide detailed instructions clarifying what insurers and health plans must do to comply with Section 2715 of the Patient Protection and Affordable Care Act (PPACA).

Please visit the Center for Consumer Information & Insurance Oversight* page to read the full FAQ.

Highlights

FAQ #1: New additional safe harbor for electronic delivery of SBCs. SBCs may now be provided electronically in connection with online enrollment, online renewal of coverage and to participants and beneficiaries who request an SBC online. Paper copies must still be available on request. In addition, for individual market issuers that offer online enrollment or renewal, the SBC may be provided electronically, at all issuances, to customers who enroll or renew online.

FAQs #2-9: Offer clarification about shoppers, duplicate SBCs, the ability to reference other documents such as summary plan description (SPD) in the footer of the SBC, minor adjustments of the SBC allowed to facilitate smoother web viewing, penalties and streamlined calculators.

FAQ #10: Prior to this FAQ, the medical insurer was expected to coordinate medical and any carve-out benefits into one SBC. The FAQs clarify that the plan administrator (employer) is responsible and may contract with the issuer or another third party to provide the SBC.

FAQ #11: Written translations in Spanish, Chinese, and Tagalog are now available. Navajo translations will be available soon.

FAQ #12: Due to additional administrative complexities involved in providing SBCs for closed blocks of business (plans that are no longer sold but customers/members still have the coverage), the Departments will not apply any penalties against a plan or issuer for failing to provide an SBC before September 23, 2013. This may be of significance to conversion and individual plans.

FAQ #13: The Departments recognize the additional administrative costs and barriers to creating SBCs for Expatriate plans, and will not take any enforcement action during the first year of applicability.

Since this is an FAQ, there is no comment period.

Cigna is currently finalizing the process for producing and distributing the SBCs to comply with the law. There will be differences in how these documents are produced and distributed for Individual and Family Plans (IFP) and employer groups. As soon as possible, we will provide these details to our IFP brokers.

For additional information, please visit our Summary of Benefits and Coverage page on InformedOnReform.com.

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