Reform Alert - News from the Blues' Office of National Health Reform

Summary of Benefits and Coverage Final Rule Released

Feb. 13, 2012

On Feb. 9, 2012, the Departments of Health and Human Services, Labor, and Treasury released the Final Rule (PDF) and the Summary of Benefits and Coverage Template, Instructions and Related Materials (PDF).

As communicated in the Nov. 29, 2011 alert, these documents aim to help consumers understand their health coverage options and aid employers in finding the best coverage for their employees. Health insurers and group health plans must provide consumers with a Summary of Benefits and Coverage, a Coverage Example, and a Uniform Glossary of commonly used terms in health insurance.

Below is a summary of the some of the significant changes from the August 2011 proposed regulations:

Effective date: The final regulations revised the effective date for health insurance issuers and group health plans to provide the SBCs from March 23, 2012, to the following: 

  • For disclosures to group health plans, and to individuals and dependents in the individual market, these requirements are applicable to health insurance issuers beginning on Sept. 23, 2012. 
  • For disclosures to participants or beneficiaries who enroll or re-enroll through an open enrollment period, effective first day of the first open enrollment period that begins on or after Sept. 23, 2012. 
  • For participants or beneficiaries who enroll in coverage other than through an open enrollment period (including newly eligible and special enrollment periods), effective first day of the first plan year that begins on or after Sept. 23, 2012. 

Delivery Timeframes: The final regulations revised the timeframes for health insurance issuers and group health plans to issue the SBCs: 

  • An insurer or group health plan must make the SBC available on paper or electronically to shoppers, applicants, enrollees, and upon request within seven business days. 
  • Enrollees who qualify for a special enrollment period must be provided the SBC no later than 90 days from enrollment (consistent with ERISA). 
  • In the case of renewal or reissuance, if written application is required for renewal, the SBC must be provided no later than the date the materials are distributed. For automatic renewals or reissuance of coverage, the SBC must be available 30 days prior to the first day of the new policy or plan year. However, with respect to insured coverage, in situations in which the SBC cannot be provided within this timeframe because, for instance, the issuer and the purchaser have not yet finalized the terms of coverage for the new policy year, the SBC must be provided as soon as practicable, but in no event later than seven business days after the issuance of the policy, certificate, or contract of insurance, or the receipt of written confirmation of intent to renew, whichever is earlier. 

Template: The SBC template no longer includes premium or cost of coverage. In addition, there is some flexibility for plans (for example tiered networks) that do not fit into the template/instructions. Employers and insurers in the group market are allowed to combine the SBC with other consumer materials as long as the SBC is displayed at the beginning of the materials. For the individual market, the SBC must be provided as a stand-alone document. 

Language: The SBC must be provided in a culturally and linguistically appropriate manner. HHS will provide written translations of the SBC template, sample language, and uniform glossary in Spanish, Tagalog, Chinese and Navajo and may make these materials available in other languages. 

Blue Cross Blue Shield of Michigan is continuing to analyze the final rules and accompanying materials and will provide additional updates.

A press release and other related documents are available on the HHS website.

The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.