Garrett Fenton Quoted on the ACA's Summary of Benefits and Coverage in Health Reform WK-EDGE

"STRATEGIC PERSPECTIVES: Proposed changes to SBC disclosure rules aim to provide clearer picture of plan landscape"
Health Reform WK-EDGE

Garrett Fenton describes new reporting and disclosure provisions under the Affordable Care Act that require group health plans and health insurers to provide a Summary of Benefits and Coverage (SBC) that clearly describes the coverage under their plans. "There are a number of relatively straight-forward changes to the SBC content requirements, as well as some additional relief relating to the use of third party vendors to assist in complying with the rules," Fenton said. "These requirements may be modified further when the proposed regulations, templates, instructions, and related materials are finalized, likely later this year."

Looking ahead to the enforcement of the proposed rules Fenton said, "employers generally are liable for ensuring that SBCs are completed properly, and provided to employees and dependents in a timely manner, for both self-funded and fully-insured group coverage (including where the employer contracts with multiple health insurers or third party administrators to insure or administer different types of benefits offered under the plan)." In addition, "employers that rely on health insurers or other entities to furnish SBCs on their behalf should consider structuring their vendor contracts, and establishing the necessary internal controls and vendor monitoring procedures, to take advantage of the proposed regulations' compliance safe harbor rules," he said.

Regarding when the proposed guidance will go into effect, Fenton said, "for employers whose next open enrollment period begins on or after September 1, 2015, the proposed guidance would be effective as of the first day of that open enrollment period, for individuals who enroll or re-enroll in the coverage during the period." For all other enrollees – e.g., those who enroll mid-year due to a special enrollment period, such as a marriage, birth of a child, new hire, or other specified life event – he said the proposed guidance would be effective as of the first day of the first plan year beginning on or after September 1, 2015 (i.e., January 1, 2015, for calendar year plans). Fenton recommends employers "stay apprised of the guidance, and be prepared to coordinate with their vendors (if necessary) and implement the updated SBC rules in short order, if and when those rules are finalized later this year."

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