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Agencies Finalize ACA’s Summary of Benefits and Coverage (SBC) Rule

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July 2015

The Departments of Treasury, Health and Human Services (HHS) and Labor (DOL) issued final regulations regarding the Affordable Care Act’s summary of benefits and coverage (SBC) that finalize some of the provisions in the proposed rule from December 2014. Specifically, the final rule clarifies when a plan or issuer is required to provide an SBC. Importantly, for plan sponsors, this rule does not itself impose changes to the form and content of the SBC template. Rather, changes to the SBC template are expected to be released in early 2016. The final rule is effective for group health plans as of September 1, 2015; proposed changes involving the form and content of the SBC template and glossary will not be effective until January 1, 2017.

Contents of the Final Rule

For group health plans, the final SBC rule clarifies that a plan administrator may outsource to another party its responsibility to provide the SBC to plan participants. In doing so, the plan administrator is required to monitor that party’s performance and take steps to correct any noncompliance as soon as practicable. The final rule also includes a safe harbor that allows plan administrators to avoid unnecessary duplication when using multiple insurance products in the same group health plan. Specifically, rather than requiring the plan administrator to provide multiple SBCs, the final rule allows a plan administrator to synthesize all of the insurance products (or self-insured products, as the case may be) into one SBC.

Changes to the Form and Content of the SBC

Perhaps most importantly, the agencies are taking steps to shorten the SBC in response to plan sponsor feedback. The December 2014 proposed regulations were released in tandem with an updated draft SBC template that will shorten the length and limit the amount of required information in the SBC. Public comments on the new template and results from consumer testing are still pending. Accordingly, an updated template will not be finalized until early 2016 and will be effective for plan years beginning on or after January 1, 2017.

These final rules will have limited impact on group health plans. The major changes to the form and content of the SBC template will not be released until 2016; accordingly, plan sponsors will be able to continue to use the 2013 SBC template and rely on the associated guidance until then.

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