ERISA-Government Provides New Guidance On Summary Of Benefits And Coverage

The U.S. Department of Labor, the Department of Health and Human Services and the Treasury Department (together, the “Departments”) have released FAQs about the Affordable Care Act Implementation Part XIV. These FAQs discuss the implementation of the Affordable Care Act. Here are some of the things that the FAQs said on the Summary of Benefits and Coverage (the “SBC”).

The Templates For The SBCs And Uniform Glossary After The First Year Of Applicability. An updated SBC template (and sample completed SBC) are now available at cciio.cms.gov and www.dol.gov/ebsa/healthreform. These documents are authorized for use, with respect to group health plans, for SBCs provided with respect to coverage beginning on or after January 1, 2014, and before January 1, 2015 (referred to as “the second year of applicability”). The only changes to the SBC template and sample completed SBC from the previous templates are: (1) the addition of statements of whether the plan provides minimum essential coverage or “MEC” (as defined under section 5000A(f) of the Internal Revenue Code 1986) and (2) whether the plan meets the minimum value requirements or “MV Requirements” (such requirements being that the plan’s share of the total allowed costs of benefits provided under the plan is not less than 60 percent of such costs). On page 4 of the SBC template (and illustrated on page 6 of the sample completed SBC), a plan should indicate in the designated entry on the SBC template that the plan “does” or “does not” provide MEC and whether the plan “does” or “does not” meet applicable MV requirements.

The Uniform Glossary has not changed-the current template may still be used.

Relief If It Is Burdensome To Make The Above Changes To An SBC. To the extent a plan is unable to modify the SBC template for disclosures required to be provided with respect to the second year of applicability, the Departments will not take any enforcement action against a plan for using the previous template, provided that the SBC is furnished with a cover letter or similar disclosure stating whether the plan does or does not provide MEC and whether the plan’s share of the total allowed costs of benefits provided under the plan does or does not meet the MV requirement under the Affordable Care Act. The language for these statements is as follows:

Does this Coverage Provide Minimum Essential Coverage?

The Affordable Care Act requires most people to have health care coverage that qualifies as “minimum essential coverage.” This plan or policy [does/does not] provide minimum essential coverage.

Does this Coverage Meet the Minimum Value Standard?

In order for certain types of health coverage (for example, job-based coverage) to qualify as minimum essential coverage, the plan must pay, on average, at least 60 percent of allowed charges for covered services. This is called the “minimum value standard.” This health coverage [does/does not] meet the minimum value standard for the benefits it provides.

Annual Limits On Essential Health Benefits. No changes were made to the templates for the SBC (and sample completed SBC) to reflect the prohibition on annual limits on essential health benefits that becomes effective under the Affordable Care Act in 2014. Rather, plans should continue to complete the SBC template consistent with the Instructions for Completing the SBC for the Important Questions chart that appears on page 1 of the SBC:
• In the Answers column, the plan should respond “No,” where the template asks, “Is there an overall annual limit on what the plan pays?”, as plans are generally prohibited from imposing annual limits on the dollar value of essential health benefits for plan years beginning on or after January 1, 2014.
• In the Why This Matters column, the plan must show the following language: “The chart starting on page 2 describes any limits on what the plan will pay for specific covered services, such as office visits.”

Additionally, as applicable, plans should continue to include information regarding annual or lifetime dollar limits on specific covered benefits as required in the chart starting on page 2 of the SBC (in the Limitations & Exceptions column, as described in the Instructions for Completing the SBC). To the extent a plan wishes to modify the SBC template for disclosures required to be provided for the second year of applicability to remove this information, the Departments will not take any enforcement action against a plan for removing the entire row in the Important Questions chart on page 1 of the SBC (with the question: “Is there an overall annual limit on what the plan pays?”).

Other Information:

–There are no changes in the required coverage examples in the SBC.

–The use of certain safe harbors and other enforcement relief pertaining to the SBC and Uniform Glossary have been extended.
–The “anti-duplication” rule for SBCs (i.e., the SBCs need not be provided by both the plan and its insurer) is extended to student health insurance coverage.

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