Business Workshop: Rules proposed on health summary
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The Departments of Treasury, Labor, and Health and Human Services have jointly published proposed regulations on the new "Summary of Benefits and Coverage" that insurers and group health plans will be required to distribute beginning next year under the Patient Protection and Affordable Care Act.
The summary (or SBC) is intended to provide clear and consistent information that will enable consumers to understand and compare the costs and benefits of different health coverage options. Included with the proposed rules are a template for the SBC and a uniform glossary of terms commonly used to describe health coverage.
A separate SBC will be required for each coverage option. The SBC may be no longer than four double-sided pages in 12-point font and must summarize key features of the coverage option, such as covered benefits, coverage limitations and exceptions, and cost-sharing provisions.
The SBC also must contain three coverage examples that illustrate what the plan will cover for common benefits scenarios. The template includes coverage examples for expenses related to having a baby, treatment for breast cancer, and managing diabetes.
Insurers must provide consumers (including employer plan sponsors) with the SBC for a particular health coverage option automatically upon an application or request for information about the coverage. Group health plans are obligated to provide an SBC to participants and beneficiaries with respect to each benefits package for which they are eligible, no later than the first day they are eligible to enroll, at open enrollment, following a request for special enrollment, or at any time upon request.
Penalties for noncompliance with the SBC requirements include an excise tax of $100 per day per failure, as well as a fine of up to $1,000 for each willful failure.
The proposed rules were designed with the individual insurance market in mind and do not address issues particular to employer plan sponsors, such as how to coordinate the SBC with a plan's summary plan description or how to incorporate information about employer subsidies into the SBC.
Comments on the proposed rules will be accepted through Oct. 21, 2011.
-- Lauren Licastro, llicastro@morganlewis.com, Morgan, Lewis & Bockius LLP
First Published October 10, 2011 12:00 am
