As we described in our November 2011 Health Reform IMPACT, the deadline for initial distribution of the Summary of Benefits and Coverage ("SBC") required by the Affordable Care Act was delayed until an applicability date to be announced in forthcoming final SBC regulations. Those final SBC regulations have been issued (jointly by the Departments of Labor, Treasury, and Health and Human Services), and are available, along with an SBC template and other related information here.
The SBC requirements will apply to group health plans beginning (i) on the first day of the first open enrollment period beginning on or after September 23, 2012, and (ii) on the first day of the first plan year beginning on or after September 23, 2012.
Therefore, an SBC must be prepared for each applicable group health plan benefit package (generally, this is each medical plan option, although it also may apply to other group health plan coverages) and be ready for distribution—at application/enrollment, upon special enrollment, on reenrollment/renewal and on request (specific deadlines apply in each case)—by those dates, as applicable. For a calendar year plan holding an open enrollment period in November 2012, for example, SBCs must be provided during the November open enrollment period (for coverage effective January 1, 2013) and at the prescribed times on and after January 1, 2013.
Note that the SBC requirements apply to all applicable group health plans, even those designated as "grandfathered" health plans for certain other Affordable Care Act purposes.
The SBC requirements will apply to health insurance issuers ("insurers") beginning on September 23, 2012, and insurers must therefore be prepared to provide SBCs to the plans and their participants (in the group health plan market) and the individuals (in the individual market) they insure by that date.
Once the SBC rules become effective, "material modifications" made to the terms of the plan or policy (if described in the SBC) during the plan or policy year will need to be communicated, either by notice of the change or by issuance of an updated SBC, at least 60 days prior to the effective date of the mid-year change. For modifications effective upon reenrollment/renewal, the more flexible SBC distribution requirements in that context will apply—generally, an SBC must be provided with written application materials or at least 30 days prior to the first day of the new plan/policy year if reenrollment/renewal is automatic, and some additional flexibility is provided for insured plans with policies issued or renewed during that 30-day period.
We plan to follow this Alert with more detailed information about the SBC requirements for group health plans.
If you have any questions about this issue of Health Reform IMPACT, please contact any of the attorneys in our Employee Benefits Practice Group.