Health Reform News: Final SBC Rule Tries to Eliminate Redundancy with SPD

The departments implementing health reform can turn around a project when they are under the gun. Responding to concerns that the new “summary of benefits and coverage” (SBC) mandated by the health reform law is redundant, HHS, DOL and Treasury/IRS quickly turned around a final rule that eases some SBC requirements.

The final rule and a guidance/overview document are now on the public display page of the Federal Register. They are scheduled for official publication on Feb. 14. Under the rule, plans with plan years that start Sept. 23, 2012 or later will have to supply SBCs in their next open enrollment.

The agencies tackled a redundancy issue by not requiring group health plans and insurers to provide an SBC as a stand-alone document. Rather , the SBC can be incorporated into the summary plan description (SPD), provided the SBC information is intact and prominently displayed at the beginning of the SPD, such as just after the table of contents. The SBC may also be a standalone document. The proposed rule would have required them to be separate. 

Flexibility for Brevity

With the reform law and proposed rule language, major concerns emerged about the whether the SBC-required material could fit in four pages. The agencies embarrassed themselves when they issued their first template on six pages, thereby violating the law. 

To address the space issue, the regulators proposed maybe allowing the SBC to be spread on both sides of four pages; in other words, letting it be as many as eight pages. The final rule builds on this, making an allowance for reasonable attempts. 

“To the extent a plan’s terms that are required to be described in the SBC template cannot reasonably be described in a manner consistent with the template and instructions, the plan or issuer must accurately describe the relevant plan terms while using its best efforts to do so in a manner that is still consistent with the instructions and template format as reasonably possible,” the guidance states. 

Language Requirements 

Plans that have to provide appeals and review documents in a foreign language will also have to provide SBCs in a foreign language. As per the appeals and review rule, 255 U.S. counties (78 of which are in Puerto Rico) have sufficient numbers of foreign language speakers to require plans to put out SBCs and appeals and review documents in foreign languages, principally Spanish. 

HHS will provide written translations of the SBC template, sample language and uniform glossary in Spanish, Tagalog, Chinese and Navajo. 

The agencies issued the following compliance documents: (1) an SBC template; (2) a sample completed SBC; (3) instructions; (4) a “why this matters” document; (5) coverage examples; and (6) a uniform glossary of terms that may not be modified by plans or insurers. 

Templates, Instructions, and Related Materials

• Summary of Benefits and Coverage (SBC) Template | MS Word Format
• Sample Completed SBC | MS Word format
• Instructions for Completing the SBC – Group Health Plan Coverage
• Instructions for Completing the SBC – Individual Health Insurance Coverage
• Why This Matters language for “Yes” Answers
• Why This Matters language for “No” Answers
• HHS Information For Simulating Coverage Examples
• Uniform Glossary of Coverage and Medical Terms

The model form includes only two coverage examples — childbirth (normal delivery) and managing Type 2 diabetes. Breast cancer, the third example in the proposed version, was dropped and the diabetes example was narrowed in response to “many comments asserting that the necessary calculations for the coverage examples would be costly and complicated,” the agencies explained in the preamble. 

Changes were made to make the SBC relevant for self-insured coverage, by switching out terms like “policy” and “insurer” and using “coverage” and “plan” instead. 

The final rule eliminated premiums from the required content for the SBC document. Therefore, the row for communicating premium information was removed from the SBC template document. Look for more coverage of this issue in the upcoming issue of the Employer’s Guide to Self-Insuring Health Benefits.