Uniform Summary of Benefits and Coverage (SBC) Forms are Coming
Meeting the deadline, making it strategic
Beginning with open enrollment periods starting on or after September 23, 2012, the Patient Protection and Affordable Care Act (PPACA) will require employers to provide enrollees and potential enrollees a six-page form for each health plan it offers. The stated objective of the Summary of Benefits and Coverage (SBC) form is to provide clear, consistent and comparable information to employees about their coverage options and costs of health services. These forms will be added to the mix of benefits-related communications pushed to employees, so special attention should be paid to how they fit into the employer’s broader benefits communication strategy.
Important details from the SBC instructions include:
- Design. Form language and formatting must be precisely reproduced in font, symbols, bolding, colors and shading (semicolons are discouraged).
- Delivery. Permitted methods include a printed copy sent by mail; an electronic copy delivered via email or a link on the Internet; and hand delivery.
- Electronic enrollment. The form for each plan must be available on the enrollment site and the employee must acknowledge receipt of the form in order to finish enrollment.
- Timing. Forms must be provided to employees prior to enrolling in coverage. An employee can request a copy of an SBC and must receive it within seven days. Any significant changes to the terms of coverage reflected in an SBC must be communicated 60 days prior to the effective date of the change.
- Two forms. Initial forms are provided to employees in the pre-enrollment stage and include all coverage levels (single, family, etc.). Final forms are provided after enrollment and only include information relevant to the employee’s selected plan.
SBC Forms …
- Need to be ready for open enrollment beginning on or after September 23, 2012
- Must be provided for each health plan both before and after enrollment
- Can be incorporated in summary plan descriptions (SPDs), but must be intact and prominently displayed at the beginning
Group health plans will also need to provide, upon request, a “uniform glossary of coverage and medical terms,” which is a four-page form that lists commonly used terms along with an example showing how deductibles, coinsurance and out-of-pocket limits work together. Templates of the SBC and Uniform Glossary are available at www.dol.gov/ebsa/healthreform/.
The SBC form is consumer-tested and designed to help employees more fully understand their health coverage and costs. The stated purpose is to make it easier for employees, as consumers, to choose the plan that most effectively meets their needs. The form presents the following information that must be calculated and populated based on very specific instructions for each section:
- Important Questions (page 1). Chart with answers to eight questions about out-of-pocket costs, provider networks, specialist referrals and services not covered, plus prescribed “Why this Matters” language based on the answer.
- Covered Services, Cost Sharing, Limitations and Exceptions (pages 2-3). Chart with in-network and out-of-network costs for 10 common medical events, plus limitations and exceptions for each.
- Disclosures (page 4). Explanation of rights to continue coverage along with grievance and appeals rights.
- Coverage Examples (page 5). Charts showing how the employee and the plan might share costs in two situations – having a baby and managing diabetes.
- Q&A about Coverage Examples (Page 6). Questions and answers must appear as written in the template.
Implications for employers
Recognizing employees are hired throughout the year and that initial forms must be provided prior to enrollment, SBCs for each plan will need to be ready no later than the first open enrollment period beginning on or after September 23, 2012. With this in mind, employers will need to address a number of challenges in a relatively short timeframe.
The requirements are being phased in, which means that SBC forms will change for 2014 to reflect whether the coverage provides “minimum essential coverage” and meets the “minimum value” requirements. Plus, new health care market reforms will take effect in 2014 that will prompt additional changes.
Translations are required for participants in counties where 10 percent or more of the population are literate in the same non-English language. There are 255 counties that currently meet this threshold. The DOL website will provide translations for the SBC template, sample language and a uniform glossary in Spanish, Tagalog, Chinese, Navajo and possibly other languages.
The provision that “significant changes” to content on SBC forms must be communicated 60 days prior to the effective date places a new time construct on plan design decisions. In the current environment, communication requirements do not drive the timing of operational decisions. However, the new SBC environment turns that around and demands a greater lead time for operational decisions.
Smart first steps for employers to consider
Compliance. Employers should identify and deploy the appropriate resources (internal and external) to confirm that one SBC per plan is available for distribution by the start of the 2013 open enrollment season. Identifying and coordinating roles and responsibilities with vendors and third party administrators (TPAs) for the required form data is an immediate first step.
Technology. Forms must be available on the employer’s online enrollment site and the employee must acknowledge receipt to complete enrollment. This feature will need to be programmed into the online enrollment environment.
Comparisons. The SBC forms are designed for employees to compare and contrast available employer health plans. In the coverage examples, the form pre-populates “sample costs” for two situations. Employers will need to make sure the “You Pay” line items for deductibles, copays, coinsurance and limits or exclusions are truly representative from plan to plan, allowing a more effective “apples to apples” comparison.
Risk. Plan information provided on SBC forms will need to precisely align with the information included in plan documents and summary plan descriptions. Processes should be in place to confirm the alignment of the documents, particularly in light of the new mandatory external claims review process. In addition, employers may view this as an opportunity to pursue a technology-driven solution to manage and align plan information and help reduce the risk of non-compliance.
Communication. SBC forms are another layer of benefit information for employees to process and understand. To help SBC forms cut through the clutter, employers can:
- Fit the SBC forms into the overall benefits communication strategy.
- Explain the purpose of – and connection between – the new SBCs, SPDs, plan documents, enrollment materials, etc.
- Provide a “How to Read Your SBC” quick reference sheet that points out the critical information to look for when comparing plans.
- Create a “User’s Guide” to all employee benefit information with easy access when the employee needs it. For example, an online set of common questions with links to answers in source documents or an app with similar functionality.
The goal of SBC forms is to make it easier for consumers to understand health plan coverage, terminology and costs. From the employer perspective, delivering on that goal means additional resources, time and cost.
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