Affordable Care Act: New Requirements for Summary of Benefits and Coverage

The Departments of Labor, Treasury, and Health & Human Services have issued new guidance on the content requirements for health plan summaries of benefits and coverage (“SBCs”). Plan sponsors should ensure that the SBCs distributed for plan years beginning on or after January 1, 2014, include the following:

• a statement as to whether the plan provides “minimum essential coverage”; and
• a statement as to whether the plan meets the “minimum value” requirements.

Minimum essential coverage and minimum value are key requirements under the Affordable Care Act with respect to the pay-or-play penalties that take effect in 2014. SBCs distributed in connection with open enrollment for the 2014 plan year must satisfy the new requirements.

Plan sponsors should review their current SBC and decide how to proceed for the next plan year by either:

• modifying the SBC to include the required changes; or
• preparing a cover letter for the SBC to include the required information.

An updated SBC template and sample completed SBC are available at www.dol.gov/ebsa/healthreform.  Model language for a cover letter is also provided in the related Part XIV of the Frequently Asked Questions.

Previous safe harbors and other enforcement relief for good-faith compliance related to the requirement to provide an SBC and a uniform glossary for the first year of applicability have generally been extended through the second year of applicability.

If you have any questions about the changes to the SBC requirements or any other employee benefits issues, please contact one of the attorneys in the Employee Benefits & Executive Compensation Group at Bradley Arant Boult Cummings LLP.