Under the regulations of the Patient Protection and Affordable Care Act (PPACA) that take effect March 23, 2012, LIUNA’s health & welfare funds must be prepared to provide plan participants with a Summary of Benefits and Coverage (SBC) in addition to the Summary Plan Description (SPD).
While it is possible that public comment will lead to technical adjustments in the rules between now and March 23, the SBC requirement, itself, is set and likely will not change. All LIUNA funds should be working with their consultants and attorneys to be sure they are ready to provide SBCs this spring.
According to the Departments of Health and Human Services (HHS), Labor and the Treasury – which, together, are responsible for the implementation of the provisions of PPACA – the purpose of the SBC requirement is to “enable consumers to easily understand their health coverage.”
LIUNA health & welfare funds must be prepared to provide a SBC within seven days of a request from any plan participant. In addition, individuals who enter the plan under a HIPAA special enrollment right (for instance, a spouse and children following a marriage) must be provided a SBC within seven days of a request.
Another important stipulation of the SBC rule is that plan participants must receive advance notice of any changes in their coverage. In a significant change from past regulation, summaries that include “material” changes in coverage must be distributed at least 60 days prior to the change taking effect. Previously, notice was required only within 60 days following adoption of a change.
The PPACA regulatory agencies recognize that the March 23, 2012, deadline for issuing SBCs may not correspond with most plan-years and may impose some administrative hardship. Through October, the agencies accepted comments on how the changeover might be best achieved, and, after evaluation of the comments, some implementation adjustments may be allowed. The LHSFNA’s Health Promotion Division will post any such adjustments on its Health Care Reform Updates page.
Whatever the final implementation procedures, SBCs will be required, and funds must prepare to issue them. Failure to provide a proper SBC in timely fashion could result in a fine of up to $1,000 per plan participant. The requirements apply to all group health plans whether or not they are grandfathered.
The regulatory agencies have provided a template for SBCs, which must be no longer than four double-sided pages and contain print no smaller than 12-point font. The key features required in the SBC (as summarized by the International Foundation of Employee Benefit Plans) are listed in PPACA Tackles “Fine Print” (LIFELINES ONLINE, October 2011). Ogletree Deakins, a well-established benefits consultant, provides a detailed list of notification rules required under the new regulations.