Summary of Benefits and Coverage – the first step in expanding healthcare education
In a recent visit to a doctor’s office, I overheard a fellow patient getting frustrated with the payment collection process. It is clear that more education is required around how health plans work. Whether you still have a traditional co-pay plan or a high deductible plan, the Summary of Benefits and Coverage (the “SBC”) disclosure is designed to aid in educating American consumers.
With all the changes PPACA has brought, the SBC requirement is worth noticing. If your medical plan renews after September 23, 2012, you should be aware of the new health plan disclosure requirements. All plan sponsors are required to distribute a single, uniform document which is easily understood and should be used to compare an employer’s health plan options.
We all know navigating health care can be difficult, even for those of us that work in the insurance industry. The purpose of the new SBC disclosures is to make it easier for consumers to understand their medical benefits and compare their plan to other medical options, like a spouse’s plan. The SBC disclosure may not solve all the mysteries associated with health care, but it makes a great leap in breaking down how your medical plan works.
As an employer, it is important to make sure you are asking all the right questions in preparation for distribution of the disclosure. Here are some tips:
- Make sure your insurer or third party administrator (for self-funded plans) is creating the disclosure for your plan.
- If you have an employer sponsored Health Reimbursement Account (HRA), make sure you coordinate the account funding with your insurer creating the disclosure. If your insurer is not taking account funding into consideration for your SBC, make sure the document is requested in an editable format. Your broker should be able to help edit as needed. Health Savings Accounts (HSA’s) are exempt.
- Open Enrollment – If you are conducting a passive Open Enrollment, meaning last year’s enrollment elections carry over, then the SBC has to be given 30 days prior to the renewal date. If employees have to make active elections, even if they are not changing their election, then SBC has to be provided with Open Enrollment materials.
- New hires – SBCs must be provided no later than the first day of eligibility. For employers that do not have a waiting period for medical benefits, this means the SBC must be provided on the date of hire.
SBCs are a new tool to be taken advantage of by employers. But this disclosure should be used in conjunction with other communications already in place, not as a replacement to the current methods of education.
Let’s hope that further PPACA disclosures and employer/insurer requirements focus on educating the public on the complexities of health care. If you have questions regarding SBCs, turn to WGA’s Health Reform Advisory Team for more information on this and other related topics.
About the Author
Kate O’Sullivan is a Client Service Manager at William Gallagher Associates (WGA) in the Employee Benefits Group. She is responsible for servicing a number of small, mid-size and large accounts, and works on the WGA Health Care Reform Committee.