The Employee Benefits Security Administration (EBSA) has tried to clarify what will happen when health plans and benefits providers fail to meet the new federal Summary of Benefits and Coverage (SBC) requirements.
EBSA, an arm of the U.S. Department of Health and Human Services (HHS), answers a question about SBC responsibility in a list of answers to 24 frequently asked questions about the SBCs.
Three agencies -- EBSA; the Centers for Medicare & Medicaid Services (CMS), an arm of the U.S. Department of Health and Human Services; and the Internal Revenue Service (IRS), an arm of the U.S. Treasury Department -- developed the SBC regulations to implement Section 2715 of the Patient Protection and Affordable Care Act of 2010 (PPACA).
EBSA regulates only large employer-sponsored group health plans, but it notes that it developed the answers together with CMS and IRS officials, and that the answers also apply, when relevant, to individual and small group health insurance arrangements.
WHAT'S AN SBC?
PPACA Section 2715 called for the government to create a standardized health plan description document, to help consumers do a better job of shopping for coverage, by March 2012.
The SBC is supposed to include a summary of basic plan features, along with coverage examples that show how a plan would work if an enrollee had a baby, were managing Type II diabetes, or were dealing with other common illnesses, chronic conditions or life events.
Consumers will get SBCs when they apply for coverage or enroll in group plans. Consumers also can get SBCs upon request.
The SBC requirements are set to take effect Sept. 23 for individual coverage and for group plan open enrollment periods that begin on or after Sept. 23, according to the final rule.
For people who enroll in group plans for the first time or as a result of special circumstances, such as a birth or an adoption, the rule will apply on the first day of the first plan year that begins on or after Sept. 23.
EBSA officials deal with allocation of SBC responsibility in the response to the fifth question on the list.
"If a group health plan is insured and utilizes 'carve-out arrangements' (such as pharmacy benefit managers and managed behavioral health organizations) to help manage certain benefits, who is responsible for providing the SBC with respect to the plan?" a member of the public asked.
For now, until EBSA, CMS and the IRS get together to develop further guidance, a plan or issuer can avoid SBC-related penalties by taking several precautionary steps, officials say.
The precautionary steps come into play if the plan or issuer has used a binding contract to give another party responsibility for completing the SBC, providing information needed to complete part of the SBC, or delivering SBCs to the people, such as employees, who are supposed to get SBCs.
The plan or issuer can escape from SBC-related penalties in those circumstances if:
1. The plan or issuer monitors performance under the contract.
2. The plan or issuer corrects any problems it knows about as soon as possible.
3. The plan or issuer tells plan participants and beneficiaries about any problems that it can't immediately correct and takes significant steps to avoid future violations as soon as practicable.
The sixth question EBSA lists deals with how plans should handle SBCs for account-based health plan programs, or programs that combine health insurance with health savings accounts, health reimbursement arrangements or flexible spending accounts.
Plans and insurance issuers can combine the plan's information in one SBC, as long as the SBC is understandable, officials say.
The plan can put information about the effects of the add-on coverage in the appropriate spaces on the SBC for information about deductibles, co-payments, coinsurance amounts and benefits.
"In such circumstances, the coverage examples should note the assumptions used in creating them," officials say.
In some counties where many residents speak languages other than English, plans will have to provide SBCs in languages other than English. SBCs must be in Spanish in more than 200 counties.
Notices will have to be sent in Tagalog, a Filipino language, in two counties in Alaska, and in Navajo in Apache County, Ariz.
CMS will post written translations of the SBC template and a related glossary in Spanish, Tagalog and Navajo, officials say.