As part of The Patient Protection and Affordable Act, employers must provide a Summary of Benefit and Coverage (SBC) to all enrollees and their dependents beginning the first day of the first open enrollment period that begins on or after September 23, 2012. The summary may be provided in paper form, or electronically if certain requirements are met. The SBC generally must be provided to participants and beneficiaries based on the following guidelines:
- Upon application. The SBC must be provided as part of any written application materials that are distributed by the plan or issuer for enrollment. If the plan does not distribute such materials, the SBC must be provided no later than the first date the participant is eligible to enroll in coverage for the participant or any beneficiaries.
- By first day of coverage (if there are changes). If there is any change to the information required to be in the SBC that was provided upon application and before the first day of coverage, the plan or issuer must update and distribute a current SBC to a participant or beneficiary no later than the first day of coverage.
- Special enrollees. The plan or issuer must provide the SBC to special enrollees (as described in the Health Insurance Portability and Accountability Act or HIPAA) no later than the date by which a summary plan description (SPD) is required to be provided under the Employee Retirement Income Security Act (ERISA), i.e., 90 days from enrollment.
- Upon renewal. If the plan or issuer requires participants or beneficiaries to renew in order to maintain coverage (for example, for a succeeding plan year), the plan or issuer must provide a new SBC when the coverage is renewed, as follows:
- If written application is required for renewal (in either paper or electronic form), the SBC must be provided no later than the date on which the written application materials are distributed.
- If renewal is automatic, the SBC must be provided no later than 30 days prior to the first day of the new plan or policy year; however, with respect to an insured plan, if the policy, certificate, or contract of insurance has not been issued or renewed before such 30-day period, the SBC must be provided as soon as practicable but in no event later than 7 business days after issuance of the new policy, certificate, or contract of insurance, or the receipt of written confirmation of intent to renew, whichever is earlier.
- Upon request. A plan or issuer must provide the SBC to participants or beneficiaries upon request for an SBC or summary information about the health coverage, as soon as practicable, but in no event later than 7 business days following receipt of the request.
Additionally, if a group health plan or health insurance issuer offering group health insurance coverage makes any material modification in any of the terms of the plan or coverage that would affect the content of the SBC, that is not reflected in the most recently provided SBC, and that occurs other than in connection with a renewal or reissuance of coverage, the plan or issuer must provide notice of the modification to enrollees not later than 60 days prior to the date on which such modification will become effective. Notice provided in a complete and timely manner may also satisfy the requirement that a group health plan provide a summary of material modification (SMM) under ERISA.
For the first year, federal officials have declared that they will not take any enforcement actions related to SBC’s until September 23, 2013 as long as the employer can show that a good faith effort was made to obtain and provide SBC’s to employees and dependents. After September 23, 2013 there can be a fine of up to $1000 per consumer when the employer willfully fails to provide the SBC. In addition the State Department of Insurance can also impose fines in accordance with the states regulations. If the state fails to act the Department of Labor can step in and issue fines of $100 per day per affected individual until the SBC’s are properly issued.
At this time all Health Insurance Carrier’s are working diligently to provide you with the means to obtain your SBC by the first day of the first open enrollment period that begins on or after September 23, 2012. As we receive further details from each of the carriers we will communicate the details to you. If you have any further questions and would like any further information please contact us at firstname.lastname@example.org