Proposed changes to SBC concern large employers

Proposed changes to the Affordable Care Act’s summary of benefits and coverage and uniform glossary are coming under fire from business groups who say the implementation time frame does not give them enough time to comply with the new requirements.

The SBC, mandated by the ACA, is intended to provide group health plan members with an easy-to-understand summary of a health plan’s benefits and coverage. It’s an additional document employers have to ensure employees receive, above and beyond whatever other communications they provide. Under the current rules, it can be no longer than four double-sided pages and must include two standard coverage examples – having a baby and managing type 2 diabetes – using specific words contained in the glossary.

The new rules, proposed late December by the Departments of Labor, Health and Human Services and the Treasury, propose to cut the length of the SBC to two pages, increase the number of coverage examples to three, revamp how cost estimates included in the SBC are done and simplify the times when the SBC needs to be distributed.

Also see: Summary of Benefits and Coverage could wreak communication havoc

The proposed rule provides that the changes would apply beginning the first day of the first open enrollment period beginning on or after Sept. 1, 2015 for plan participants who enroll or re-enroll in group health coverage through open enrollment. For participants and beneficiaries enrolling in coverage at a time other than during open enrollment, the changes would apply on the first day of the first plan year beginning on or after Sept. 1, 2015.

Fully insured employers generally rely on their insurers to provide the SBC. Self-funded employers, meanwhile, may create the SBC themselves, or rely on their third-party administrators.

“The applicability date in the Proposed Rule does not allow plans and issuers sufficient time to update their internal processes to comply with the Proposed Rule’s new requirements or changes in the SBC template,” said the American Benefits Council in its comment letter to the Employee Benefits Security Administration. The comment period closed March 2.

The National Business Group on Health, meanwhile, in its comment letter recommended EBSA “delay the effective date of the SBC and uniform glossary requirements to the first day of the first plan year beginning 12 months after the issuance of final regulations.”

Also see: Feds issue regs on SBC requirement

“It’s a government-prescribed form and sometimes it’s not very effective and can be confusing for employees,” says Steve Wojcik, vice president, public policy, with the NBGH. “The employer has to send it, and draw attention to it, but then is also saying ‘by the way, here’s our communications about benefits.’ It’s duplicative.”

The NBGH is asking for more flexibility to allow the information to be incorporated into employers’ current plan communications and summary plan descriptions required under ERISA.

“It’s a good intention, but it’s too prescribed,” believes Wojcik, adding the SBC’s intent is for employees to be able to make an apple-to-apple comparison among various health plans that are available to them, but that the federal government doesn’t “realize employer plans don’t necessarily fit the template they’re prescribing.”