New proposed regulations would change some of the requirements for the uniform summary of benefits and coverage (“SBC”) that group health plans must provide to participants.  The Labor Department has also made available proposed updates to the SBC template, coverage examples, uniform glossary of terms, and related materials on its website.  

Changes Would Be Effective In 2015

The changes are proposed to be applicable to SBCs provided during the first open enrollment period that begins on or after September 1, 2015.  Although it is too early to say which of the proposed revisions will be implemented, group health plan sponsors and administrators should bear in mind that changes are in the works as they develop their health plan communications and prepare for open enrollment later this year.

Some Proposed Changes Would Be Significant

The agencies published final regulations in 2012 interpreting the SBC requirement.  In many cases, the new proposed regulations make only minor changes in the 2012 regulations.  For example, the proposed regulations clarify when a plan must provide another SBC to a participant who received one previously, and they incorporate a number of changes announced in frequently-asked questions (“FAQs”) or other informal guidance published since the 2012 regulations were issued.

Some of the proposed changes are more substantive, however.  For example:

  • If a plan administrator contracts with a third party to provide the SBC, the plan administrator will not be relieved of responsibility for satisfying the SBC requirements unless the plan administrator monitors the third party’s performance and takes specific steps to address instances of noncompliance.
  • The SBC must state whether the plan provides minimum essential coverage and whether it meets the minimum value standards; plan administrators will no longer be able to rely on a safe harbor that currently permits them to disclose this information in a cover letter.
  • The new SBC template eliminates some information that is not required by the statute, and these changes reduce the length of the template from four double-sided pages to two and a half double-sided pages.
  • The SBC must include a third coverage example (in addition to the two examples required by the 2012 regulations) involving a simple foot fracture with an emergency room visit.

Comments Due March 2

Some of the proposed changes are likely to be helpful to group health plan sponsors; other proposed changes might be less welcome.  In addition to factoring possible SBC changes into their schedule for developing participant communications in 2015, plan sponsors might wish to consider whether to comment on the regulations, either with respect to the changes currently proposed or with respect to other changes that would make the SBC requirements more effective and less burdensome.  Comments are due no later than March 2, 2015.

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Photo of Amy N. Moore Amy N. Moore

Amy Moore advises public and private companies and tax exempt organizations on a wide range of tax, ERISA, and employment law issues concerning all types of benefit programs.  Ms. Moore counsels some of the world’s largest multinational companies on the design and implementation…

Amy Moore advises public and private companies and tax exempt organizations on a wide range of tax, ERISA, and employment law issues concerning all types of benefit programs.  Ms. Moore counsels some of the world’s largest multinational companies on the design and implementation of innovative benefit strategies, including the restructuring of retirement programs to meet the needs of the modern work force; the use of surplus pension and insurance assets to provide non-traditional benefits; and the establishment of funding and security arrangements for welfare plans and executive compensation.  She represents clients in connection with pension fund investments in private equity funds, hedge funds, group trusts, and derivatives.  She also advises on benefits and compensation issues in acquisitions and divestitures, debt finance, joint ventures, and other corporate transactions.  Ms. Moore represents companies in audits and contested agency proceedings involving benefit plans and advises clients on employee benefits issues that arise in connection with ERISA litigation and settlements.  She also counsels employers on issues of plan administration and the correction of operational problems under government-sponsored remedial programs.