Summary of Benefits & Coverage (SBC) Requirements Deadline

The Departments of Health and Human Services, Labor, and the Treasury have released the final regulations under the Health Care Reform law to implement the requirement that health plans and health insurers provide consumers with an 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.).


This requirement will apply to both insured and self-funded health plans, regardless of grandfather status. The SBC requirement is effective on the first open enrollment period beginning on or after September 23, 2012. For participants that do not have an open enrollment process, the compliance deadline is the first day of the first plan year beginning on or after September 23, 2012.


In order to be compliant with this fast-approaching deadline, there are a number of items that must be considered now.

  • Check      with your carrier to confirm that it will produce an SBC for your group’s      plan
    • Most       carriers have stated that they will produce an SBC for both their insured       and self-funded medical plans
  • Check      with your carrier to see if there will be an additional cost associated      with the production of the SBC
    • Most       carriers in our area have not stated that additional costs would be       charged
  • Investigate      how your carrier intends to deliver the completed SBCs and whether or      not they intend to distribute the SBCs to the group participants
    • Most       carriers have stated they will either post SBCs to a website or deliver a       PDF of the SBC to the broker of record or group via email
    • For       this year, most carriers are refusing to distribute the SBC to       participants
    • The       sole responsibility for distribution of SBCs lies with the group
  • Does      your group have an HRA or FSA that covers expenses beyond just dental and      vision? 
    • A       separate SBC is required for a stand-alone HRA
    • SBCs       must contain information regarding how an HRA or FSA affects the medical       plan
  • If      your carrier is not the administrator of the group’s HRA or FSA, will the      carrier either produce a separate SBC or allow modification of the medical      SBC to include HRA or FSA information? 
    • Most       carriers have stated that they will not produce an SBC for which they are       not the administrator. Therefore, groups / producers must check with the       appropriate HRA/FSA administrator to see if it will produce an SBC for       the HRA/FSA in question
    • If       the group does not have an administrator, or if the administrator is not       going to produce an SBC, it is the group’s responsibility to create and       distribute an SBC relative to the HRA/FSA
    • This       year, most carriers have stated that they will not produce SBCs in a       format that will allow  modification for HRA/FSA
    • If       an existing SBC cannot be modified, then an entirely new SBC will have to       be produced for an HRA or FSA
  • Don’t      forget about the glossary
    • The       final SBC regulations also require the distribution of a standard       glossary of terms that cannot be modified. While the carriers may produce       an SBC, they are not likely to provide the group with the glossary for       distribution
    • The       glossary should be distributed with the SBC.  A link to a template       of the glossary can be found below

Please see the Carrier Review section below for insurance carrier updates on SBC distribution to employer groups.  If your insurance carrier is not listed, please contact your Power Kunkle Client Manager for additional details.



DOL Uniform Glossary Template

DOL ACA FAQs Part X: SBC Provisions


The information provided herein is intended solely for the use of our clients. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher or Publishers of articles within.

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.