H&W: Final Guidance Issued for PPACAs SBC Requirement

Final Guidance Issued for PPACAs SBC Requirement: Last week, the Departments of Labor, Health and Human Services, and the Treasury issued final regulations applicable to group health plans and health insurance carriers describing final requirements for plans and carriers related to the mandated summary of benefits and coverage (“SBC”) and corresponding uniform glossary of commonly used health insurance and medical terms (“Uniform Glossary”).  Implementation of the new distribution requirement for both the SBC and Uniform Glossary was originally set to begin for all plan enrollments on or after March 23, 2012.   The final regulations delay the requirement to begin distributing the SBC and Uniform Glossary until open enrollment for plan years beginning on or after September 23, 2012.  In the case of newly-hire employees and mid-year special enrollments, the final regulations delay the SBC distribution requirement in a similar manner, giving employers until plan years beginning on or after September 23, 2012 to begin distribution.   For calendar year plans, this means that SBCs will be required for the first time in conjunction with 2013 open enrollment materials during the fall of 2012. 

The final regulations make some additional changes that should prove to be welcome news to employers, including elimination of the requirement that the SBC be provided as a stand-alone document, and allowing employers to provide it as part of a summary plan description, subject to certain specifications.  In addition, the final regulations provide additional instruction for completing the SBC, and make clear that electronic disclosure is permitted in order to reduce costs, subject to specifications designed to ensure delivery.

Extensive guidance is already publicly available on the Department of Labor’s website, including the text of the final regulations, a guidance for compliance, SBC template, a sample completed template and instructions,coverage examples, and the Uniform Glossary.

Compliancedashboard will be adding a new compliance activity to the dashboard that takes into account the additional compliance obligations for employer-sponsored group health plans arising from these final rules.