3/26/2012 12:05 PM
The Departments of Labor, Health and Human Services, and Treasury have issued a set of 24 FAQs on the summary of benefits and coverage (SBC) requirement under health care reform. The FAQs attempt to answer some of the questions raised to date.
Agencies have been fond of releasing guidance in the form of FAQs lately, probably in response to the volume of legislation churning out of health care reform. FAQs provide a timely means for agencies to provide information to the public. It’s unclear the weight that a court would give an FAQ, but in this rapidly changing regulatory landscape they are a welcome source of additional guidance.
The Departments’ basic approach to health care reform implementation is to assist plans and insurers into coming into compliance with the new requirements. Notably, the FAQs do not provide for an extension of the effective date of open enrollment periods on or after September 23, 2012 for participants and beneficiaries and plan years beginning on or after September 23, 2012 for enrollments outside of open enrollment. However, no penalties will apply during the first year for plans that are working diligently and in good faith to provide the SBC. See Q/A-2.
Clarification on when to provide the SBC can be found in Q/A-9. The final regulations require an SBC to be provided in several instances: upon application, by the first day of coverage (if there are any changes), to special enrollees, upon renewal, and upon request.
Upon application means that the plan, including self-insured group health plans must provide SBCs with other written enrollment materials. If the plan does not distribute written materials, then the SBC must be provided no later than the first date on which the participant is eligible to enroll in coverage. If there are changes in the SBC between enrollment and the first day of coverage, then a current SBC must be provided no later than the first day of coverage. An SBC must be provided to special enrollees no later than 90 days from enrollment. If a plan holds open enrollment, the plan must provide an SBC at the same time it distributes other open enrollment materials. If there is no enrollment, but rather elections renew automatically, then the SBC must be provided no later than 30 days prior to the first day of the new plan year. An SBC must be provided upon request – i.e., as soon as practicable – but no later than seven business days following receipt of request. See Q/A-10.
The FAQs also address the ability to combine information for different coverage tiers and note add-ons to major medical coverage (like health FSAs and HRAs) in one SBC, as long as the appearance is understandable. See Q/A-3, 4, and 6.
One area of confusion that the FAQs attempt to clear up is in what situations an SBC may be provided electronically. For eligible participants and beneficiaries who not enrolled, an SBC can be provided electronically, if: the format is readily accessible, the SBC is provided in paper form free of charge upon request; and if the SBC is provided via an Internet posting, plans or insurers timely notify individuals (via e-card or postcard). FAQ Q/A-12 provides model language for this e-card or postcard. An SBC may be provided electronically for participants or beneficiaries who are covered under the plan only of the DOL’s disclosure requirements are met. See 29 CFR 2520.104b-1 and FAQ Q/A-10, 12.
Foreign language requirements are addressed in FAQ Q/A-13, which provides that if an SBC is sent to an address where 10% or more of the population is literate only in Spanish, Tagalog, Chinese, or Navajo, then the SBC must contain a statement in the applicable non-English language clearly indicating how to access the language services provided by the plan or issuer. Such language services include: oral language services and providing the SBC in the non-English language. See Q/A-13-14.
Additional highlights addressed in the FAQs include: cross references to SPDs and other documents, and allocating contractual responsibility.
The Departments indicate that more FAQs will be forthcoming.
Find the FAQs here: http://www.dol.gov/ebsa/faqs/faq-aca8.html