Summary of Benefits and Coverage Provision

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The Summary of Benefits and Coverage (SBC) and Uniform Glossary provision requires health insurance carriers, group health plans, and their administrators to provide applicants, enrollees, beneficiaries, and participants with an SBC and a Uniform Glossary. The purpose is to provide health insurance coverage information in a concise, consistent format to allow consumers to easily compare and choose plans.

The provision becomes applicable on the first day of the first open enrollment period on or after September 23, 2012.

The SBC must include topics such as covered benefits, cost-sharing requirements, limits on coverage, and excluded benefits. Premium information does not have to be included in the SBC.

The Uniform Glossary provides a list of commonly used health coverage terms, with consistent definitions to help consumers better understand their health coverage options. It has been established by the Department of Health and Human Services and may not be changed by health plan holders or issuers.

For fully insured plans, health insurance carriers are responsible for developing and issuing the SBC and Uniform Glossary. The group health plan and its administrator are responsible for ensuring delivery to its covered employees and members at the specified times and upon request to an insured person. For self-insured plans, the group health plan administrator is responsible for preparing and providing the SBC and Uniform Glossary.

The SBC and Uniform Glossary must be sent within seven business days following receipt of the request. The potential penalty for non-compliance is up to $1,000 per enrollee for each willful failure to comply. There is also an excise tax of $100 per day per enrollee for each day that the plan fails to comply with the requirement.

The SBC and Uniform Glossary must be provided in the following situations:

  • Upon application for coverage,
  • By the first day of coverage (if information in the SBC has changed since the application for coverage),
  • Upon renewal or reissuance, and
  • Upon request (within seven business days).

Qualified COBRA participants have the same rights to receive an SBC and Uniform Glossary as non-COBRA active employees.

Paychex Solutions for the Summary of Benefits and Coverage Requirement

We will work with our clients’ carriers to help make these documents available, and help collect employee acknowledgements of receipt.