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Guidance Issued on New Summary of Benefits and Coverage Document

Deadline Change, Formatting and Content Requirements

February 2012

On February 9th, the U.S. Departments of Labor and Health & Human Services and the Internal Revenue Service issued final regulations with respect to the new Summary of Benefits and Coverage (SBC) required to be distributed to health plan participants under the Patient Protection and Affordable Care Act.  While there is still much to digest in the 150 pages of regulations, the first and most important point to be made at the moment is that the initial due date has been deferred from March 23rd to September 23rd.  

What is the SBC?  It’s a new document designed to bring uniformity to health plan summaries.  Some have described it as “the benefit plan equivalent of the standard food nutrition label” we are used to seeing on food packaging.  Some features of the SBC are:

  • It is in addition to other plan documents/requirements (it may be distributed separately from SPD or may be incorporated into SPD, for example). 
  • Its format is strictly regulated – it can be no longer that 4 double sided pages and use a minimum 12 point font.
  • It will include examples of participant cost under the plan for the following health care expenses:  having a baby (normal delivery) and managing type 2 diabetes.
  • It generally only applies to health coverage (not dental or vision, for example).
  • It may be distributed to plan participants in paper form or electronically, as long as the DOL rules for electronic distribution are followed.
  • We expect that the various insurance carriers will be preparing SBC’s for distribution to plan sponsors, who will then distribute them to participants.   

Distribution of SBC’s will now be due on the first day of an open enrollment period beginning after September 23rd for those who enroll (or re-enroll) via open enrollment.  For those who enroll outside of the “open enrollment” window, it must be available as of the 1st day of the 1st plan year beginning after September 23rd.   In the future, SBC’s will need to be delivered on the first day of open enrollment, within 90 days of enrollment for new participants, at least 60 days in advance of any “mid-year” plan changes and within 7 business days of a participant’s request. 

So what does this mean for plans renewing in the fall?  It’s complicated for plans renewing on October 1 but will be more straightforward for future renewal dates.  For example: 

For an October 1 renewal with an open enrollment that begins September 1, the SBC will not be required until September 1, 2013.  However, it must available as of October 1, 2012 for people enrolling on or after that date for reasons other than open enrollment, such as new hires. 

There is still a great deal to sort out about the rules that will ultimately be applied to the creation/distribution of the SBC:  will the documents prepared by carriers be “editable” is one question, and what are the deadlines for insurance carriers to deliver SBC’s to plan sponsors is another.  So… more to follow.  Summit will continue to monitor this topic and provide updates as appropriate.  In the meantime, if you have any questions or if we can be of any assistance with any aspect of your benefit plans, please contact a member of Summit Benefit Solutions Team.



The materials created through August 2011 are when the professionals of Summit Financial were with Ogilvie Security Advisors Corp. The professionals of Summit Financial have not been with Ogilvie Security Advisors Corp. since August 31, 2011 and have no further affiliation with that organization.
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Securities and advisory services offered through Commonwealth Financial Network, Member and, a Registered Investment Adviser. Fixed insurance products and services, as well as benefits consulting and plan administration, offered by Summit Financial Corporation are separate and unrelated to Commonwealth. Fixed insurance products and services, as well as tax services, offered by Summit Financial Strategies, Inc. are separate and unrelated to Commonwealth. This communication is strictly intended for individuals residing in the states of AL, AZ, CA, CO, CT, DC, DE, FL, GA, IL, ME, MD, MA, MI, NV, NH, NJ, NY, OH, OR, PA, RI, SC, TN, TX, VT, VA. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services.