SBC Materials and Supporting Documents (Authorized for use for plan or policy years that begin on or after January 1, 2021)
The DOL and HHS have made available a new template for the Summary of Benefits and Coverage (SBC), required by the Affordable Care Act for most group health plans. Updated instructions and other related materials have also been issued. Use of the updated materials is required beginning on the first day of the first open enrollment period for plan years beginning on or after January 1, 2021, with respect to coverage for plan or policy years beginning on or after that date. Relatively few changes have been made to the version that has been in use since 2017 (see our Checkpoint article). Here are highlights:
Minimum Essential Coverage. The SBC entry regarding minimum essential coverage has been revised to reflect the elimination of the individual shared responsibility (individual mandate) payment (see our Checkpoint article). Instead of indicating that individuals without minimum essential coverage may have to make a payment, the description now indicates that individuals eligible for certain types of minimum essential coverage may not be eligible for a premium tax credit. It also summarizes the types of coverage that may constitute minimum essential coverage.
Minimum Value. The entry indicating whether the plan provides minimum value now includes “not applicable” (in addition to yes and no) as an answer option and explains—even on the SBC template for group coverage—that the concept of minimum value is not relevant for individual coverage.
Coverage Examples. The instructions for completing the coverage examples include new guidance on the interaction between the cost-sharing amount and out-of-pocket maximum when applying the permitted rounding rules. An HHS “crosswalk” document details the updates made to the coverage examples calculator and scenario descriptions. Also, the coverage examples in the new template reflect standardized data provided by HHS.
Uniform Glossary. References to the individual mandate have been eliminated from the uniform glossary.
EBIA Comment: Unlike the last update of SBC materials, these items were not circulated in proposed form before finalization. Perhaps this is because the SBC is now well-established, and the changes relate primarily to the elimination of the individual mandate payment. Note that, although the individual mandate payment has been eliminated beginning in 2019, the new template is only for use beginning with the 2021 plan year. The new materials do not address this issue, nor do they address in any more detail the challenges of completing SBCs for account-based plans or specify whether the agencies will apply a “good faith” standard for compliance with the SBC requirement (as they did initially). For more information, see EBIA’s Health Care Reform manual at Section XVI (“Summary of Benefits and Coverage (SBC)”). See also EBIA’s ERISA Compliance manual at Section XXIV.O (“Summary of Benefits and Coverage (SBC) Under Health Care Reform”), EBIA’s Self-Insured Health Plans manual at Section XXVIII.C (“Summary of Benefits and Coverage (SBC)”), EBIA’s Group Health Plan Mandates manual at Section XXVIII.C (“SBC Disclosures About Group Health Plan Mandates”), EBIA’s Consumer-Driven Health Care manual at Section XXV.D.4.f (“Application of SBC Requirement to HRAs”), and EBIA’s COBRA manual at Section XV.R (“Requirement to Furnish SBC”). You may also be interested in our upcoming webinar, “Group Health Plans Year-End Update: Looking Ahead to 2020” (live on 12/12/19).
Contributing Editors: EBIA Staff.