The Affordable Care Act (ACA) has many changes coming down the pike in 2017, and to help your business prepare, we are featuring a series of posts that explain each change and provide direction on what your company can do to develop a compliance strategy. Volume 1 of this series explored plan design changes including grandfathered status, cost-sharing limits, and health FSA contributions. This post, Vol. 2, will cover Summary of Benefits and Coverage (SBC).
2017 ACA Summary of Benefits and Coverage (SBC) Changes
Health plans and health insurance issuers must provide an SBC to applicants and enrollees to help them understand their coverage and make coverage decisions. Plans and issuers must provide the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period, as well as to participants and beneficiaries who enroll other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees).
The SBC must follow strict formatting requirements. The Department of Labor provided templates and related materials, including instructions and a uniform glossary of coverage terms, for use by plans and issuers. On April 6, 2016, the Department issued a new template and related materials for the SBC.
Plans with annual open enrollment periods must start using the new template on the first day of the first open enrollment period that begins on or after April 1, 2017, with respect to coverage for plan or policy years beginning on or after that date.
Plans without an annual open enrollment period must start using the new template on the first day of the first plan or policy year that begins on or after April 1, 2017.
The New SBC Template
Prepare to use the new SBC template for health plans with open enrollment periods or plan years beginning on or after April 1, 2017.
For self-funded plans, the plan administrator is responsible for creating and providing the SBC. For insured plans, the issuer is required to provide the SBC to the plan sponsor. Both the plan and the issuer are obligated to provide the SBC, although this obligation is satisfied for both parties if either one provides the SBC. If you have an insured plan, confirm whether your health insurance issuer will assume responsibility for providing the SBCs.
Stay tuned for Vol. 3 of this series, where we will cover changes to reinsurance fees!
This ACA Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. Information from Zywave, Inc.