Smart Benefits: Remember to Provide SBCs at Open Enrollment – or Pay

Smart Benefits: Remember to Provide SBCs at Open Enrollment – or Pay

With the 2015 open enrollment period looming, employers need to inform employees of their health benefit options by providing a Summary of Benefits and Coverage (SBC), or face a penalty.

The SBC, designed to enable employees to easily compare coverages, must be provided by group health plan sponsors every year by the first day of open enrolment. The document, which must be in a standard format, has to include:

-A description of the coverage (including the cost-sharing, for each category of benefits identified by the Departments
-Exceptions, reductions, or limitations on coverage
-Cost-sharing provisions of the coverage, including deductible, coinsurance, and copayment obligations
-The renewability and continuation of coverage provisions
-A coverage facts label or coverage examples (e.g. common benefits scenarios for having a baby (normal delivery)
-A statement that the SBC is only a summary and that the plan document, policy or certificate of insurance should be consulted to determine the governing contractual provisions of the coverage
-A contact number to call with questions and a web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained
-Web addresses (or other contact information) for obtaining a list of the network providers, for where an individual may find more information about the prescription drug coverage under the plan or coverage, and for where an individual may review the Uniform Glossary, and a disclosure that paper copies of the Uniform Glossary are available

GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST

An SBC is required for medical coverage but not for stand-alone dental and vision benefits, health FSAs (unless the employer makes a significant contribution or group medical is not offered), or HSAs, although the high-deductible health plan will need an SBC.

Employers will be fined up to $1,000 per employee for willful failures to provide the SBC, and up to $100 per participant per day for negligent failures to provide the document.

The standard template for the 2015 SBC can be found here.

Amy Gallagher has over 21 years of healthcare industry experience guiding employers and employees. As Vice President at Cornerstone Group, she advises large employers on all aspects of healthcare reform, benefit solutions, cost-containment strategies and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, and is often quoted by national publications on the subject matter. Locally, Amy is a member of SHRM-RI, the Rhode Island Business Group on Health, and the Rhode Island Business Healthcare Advisory Council.