The SBC Looms Large: How Employers Can Prepare
The Summary of Benefits and Coverage requirement is here. If you have a health plan renewing this year on 10/1, 11/1, 12/1 or 1/1 (and going forward) you are subject to the rules of SBC preparation and distribution. The SBCs will have a significant impact on how employers communicate medical plan options to their employees, particularly at Open Enrollment. It is expected that the SBC requirements to complement, not replace, the usual and customary communications that go out to employees at Open Enrollment and upon new eligibility into the plan (and at other specified times). Employers will need to take steps to make sure the communication strategy in place is timely and streamlined to both meet the new requirements and make the most meaningful impact on employees.
One of the first challenges that employers face is to learn the rules and regulations attendant to the SBC format and distribution requirements. With proper preparation, employers will be in a better position to meet the PPACA compliance standards. Here are some tips for employers to acquaint themselves fully with the SBC requirements:
- Review a model fully-compliant SBC and Uniform Glossary.
- Confirm that your insurer or TPA will create the SBC, given your current funding mechanism.
- Be sure that the document aligns with all other plan documents, benefit summaries and SPDs distributed to plan participants. Especially with the new mandatory external claims review process in place, the plan of benefits will need to be accurately and consistently communicated across all distributed communications.
- Decide if other pieces in the Open Enrollment/New Hire package should be incorporated to tie the SBC in with other plan documents, such as an “FAQ”, a “How-To Guide” or “Road Map” to all of the pieces contained in the package.
- Determine what technology might be put in place to meet your SBC and other compliance objectives (e.g., on line enrollment system, intranet document library, if not already in place.)
- Make certain to incorporate any carve-out or third party administered benefits into the SBC (such as HRAs, HSAs and carve-out Rx) so that each plan option has its own complete SBC, or even better, one SBC to reflect all the provisions of one plan.
- Ask any charges will be incurred to create the SBC, so that this cost is factored into overall administrative cost.
- Be advised of when employer must distribute the SBC and to whom. Generally, these are; at open enrollment, upon eligibility for coverage, upon first day of coverage (if changes occurred), upon HIPAA-allowed change in coverage, upon request.
- Determine by which methods employers are allowed to distribute such materials (electronic distribution, electronic posting, paper, mail etc.) and under what circumstances certain distribution methods are allowed. (Noting that with electronic distribution within an Open Enrollment portal, employees must acknowledge receipt of the document.)
- The goal of SBC forms is to make it easier for consumers to understand and compare the health plan options available to them. Given the confusion that generally surrounds employee benefit plans, this is a noble pursuit. Remember that the SBC and the Uniform Glossary of Terms are tools that are meant to demystify health plan terminology and illustrate the costs associated with healthcare. In order to effectively deliver on this goal, employers need to be prepared to expend additional resources, time and expense to make this happen effectively.
To learn more from the Summary of Benefits and Coverage, visit the WGA Health Reform Advisory Corner.