Summary of Benefits and Coverage Requirement (SBC) and Advanced Notice of Material Modification

The Departments of Health and Human Services, Labor and the Treasury have established a “Good Faith Compliance Standard,” which means that no penalties to those working diligently and in good faith to provide the required SBC content in an appearance consistent with the final regulations. Originally, this transition relief was only to extend for the first two years of applicability. However, on May 2, 2014, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury issued FAQs About Affordable Care Act XIX, whereby the transition relief was specifically extended until further guidance is issued.

Included in the final SBC regulations is the requirement that health plans now provide an Advanced Notice of Material Modifications. Specifically, the new rules require health plans to provide a 60-day notice if any change would change any materials on the most recent SBC.

The SBC regulations, under the Health Care Reform law, is to implement the requirement that health plans and health insurers provide consumers with a Summary of Benefits and Coverage (SBC). The stated purpose of the SBC is to “accurately describe the benefits and coverage under the applicable plan or coverage,” which will purportedly allow participants to better compare plan terms and benefits.  All group health plans will have to distribute a brief standard summary of benefits and must use and distribute a uniform glossary containing definitions for common terms (e.g. “copay”, “deductible”, etc.).


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The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.