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August 06, 2012
ACA: What you need to know about the SBC requirement
By Martin Simon, J.D., BLR Senior Legal Editor

The Affordable Care Act (ACA) is a complex piece of legislation with many interlocking parts. With such a complicated law, it’s easy to over look important details.

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For example, the ACA requires that a summary of benefits and coverage (SBC) that accurately describes the benefits and coverage under group health plans and group or individual health insurance coverage be provided to applicants, enrollees, re-enrollees, and policyholders or certificate holders. In addition, if a group health plan or health insurer makes any material modification in any of the terms of the plan or coverage involved that is not reflected in the most recently provided SBC, the plan or issuer must provide notice of the modification to enrollees at least 60 days before the modification will become effective.

Exception to SBC requirement. But employers and insurers often don’t know much in advance about the specifics of material changes to a plan that will be made when the insurance coverage is renewed. The Department of Labor (DOL), Internal Revenue Service (IRS), and the Department of Health and Human Services (HHS), however have come to the rescue. Final regulations on the SBC requirement state that a material modification that occurs in connection with a renewal or reissuance of coverage is not subject to the 60 day provision (DOL Reg. Sec. 54.9815–2715).

Effective dates. The final SBC regulations apply for disclosures to participants and beneficiaries who enroll or reenroll in group health coverage through an open enrollment period (including reenrollees and late enrollees) beginning on the first day of the first open enrollment period that begins on or after September 23, 2012. For disclosures to participants and beneficiaries who enroll in group health plan coverage other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees), the final regulations apply beginning on the first day of the first plan year that begins on or after September 23, 2012.

Be certain your company is prepared and that your plan follows the 2010–2018 timeline for total compliance. Download Healthcare Reform Countdown to 2014, BLR’s new special report that starts with a quick summary of provisions followed by detailed analysis so that all of your questions on this complex law are answered. (Print version available.)

Martin Simon, J.D. is a Senior Legal Editor for BLR’s human resources and employment law publications. Mr. Simon has worked in legal publishing for over 20 years. He worked for 7 years as a legal editor for Prentice Hall, where he wrote and edited for the Pension and Profit Sharing and the Plan Administrators Compliance Manual looseleaf services. He has been a legal editor for BLR for more than 17 years. Mr. Simon has been on the Board of the Hartford Chapter of Working in Employee Benefits for 4 years. Mr. Simon has a B.A. degree with Honors from the University of Connecticut, where he was a member of the Honors Program and Phi Beta Kappa. He received his law degree from the University of Connecticut and is a member of the Connecticut Bar.

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