- On March 17, 2017
One ACA requirement for health insurers and employer-sponsored group benefit plans that remains effective is the requirement to provide enrollees and applicants with a Summary of Benefits and Coverage (SBC) and a uniform glossary of common health plan terms. The SBC is a short document that explains all of a health plan’s basic coverage terms and cost-sharing requirements using simple and consistent language. The common template all health insurers and employers must use to create their SBCs was recently updated, as were the instructions and the accompanying glossary of terms. All employer groups and health insurers must begin using the new template and the new glossary for all plans that renew on or after April 1, 2017.
Employers and health insurance issuers must provide SBCs and a glossary to all employees who are offered and who enroll in group coverage. Usually, this distribution occurs either during annual open enrollment or when a new hire satisfies his or her eligibility requirements.
For our clients who purchase fully-insured health coverage options for their employees, the health insurance carrier will prepare SBCs using the new template and your Kistler Tiffany Benefits consultant will work with you to make sure that all SBCs and the glossary you and/or your health carrier provide to your employees follows the new format and that you distribute them at the correct times. For employers who self-fund their group benefit options, your Kistler Tiffany Benefits consultant will work with the third-party plan administrator to ensure that new SBCs are prepared for all applicable components of your plan and make sure that you have them to distribute to your employees as part of your open enrollment materials, new hire packets and other applicable occasions.
While Kistler Tiffany Benefits will do all it can to make sure that our valued clients and their employees have SBCs made using the right template moving forward, it is important for all employers to know there are penalties that the Department of Labor can impose on employers whose SBCs include willful mistakes or who willfully do not follow SBC and uniform glossary distribution rules. The possible fines include a civil penalty $1087 for each willful SBC distribution failure on the part of the employer group plan, and SBC failures and mistakes could also trigger the $100 a day per affected beneficiary federal excise tax for group health plan compliance violations. However, the Departments of Labor and health and Human Services have stated that their intended approach to SBC enforcement is in assisting, rather than penalizing, employers, health insurance issuers and other related third-parties, provided that they are diligently making a good faith effort towards compliance.