Summary of Benefits and Coverage (SBCs)

Health care reform continues to evolve and the latest employer requirement involves new Summaries of Benefits and Coverage (SBC). Failure to adhere to the SBC language will result in a fine of $1,000 per participant on a federal basis and gives the states the ability to levy additional fines for woeful violations.

At the heart of the SBC change is the ability for consumers (your employees and dependents) to have an easier understanding of their benefits. SBC’s will now be written in 5th grade language. The SBC must include a description of coverage, appeals and grievances, exceptions and limitations, cost sharing, website information and how to file a claim.

This requirement applies to all fully insured and self –funded plans. The SBCs must be sent to current, future, and any COBRA employees. SBCs are required to be sent when your health insurance plan renews after September 23rd, 2012, so any client whose health insurance renewal is October 1st must start complying with the new legislation. Any new employee who becomes eligible for health insurance coverage after your renewal date must be given the SBC.

The good news: Your health insurance carrier will provide the SBCs for your distribution. Make sure you get your renewals done in a timely fashion to give the insurance carrier ample time to produce the SBCs. If you typically give employees 30 days to enroll prior to your effective date of coverage (Example: Health plan renews in January but employer conducts Open Enrollment Meetings in November, you must have SBCs available for Open Enrollment). Again, make sure you get your renewal information completed in a timely fashion.

As an employer, you are responsible for ensuring that all participants receive the SBC. You can either print and send to each employee at home address or send it electronically based upon DOL rules of electronic disclosure.

You will begin receiving information later this month about how to access the SBCs with your particular insurance carrier. We envision an online tool that we will help you build your SBCs. We also will need to walk you through the process. It is of utmost importance that all employer groups comply and we will make the SBC compliance part of our renewal checklist.


Burman S. Clark

Burman S. Clark, RHU, CSA is the President of Muneris Benefits and a licensed insurance broker and consultant. His independent practice and focuses on employee benefits, individual life, disability, medical, and senior products. Burman has traveled extensively and provided guidance to large employer associations with regards to the Affordable Care Act.