This Employer Webinar Series program This Employer Webinar Series program is presented by Spencer Fane Britt & Browne LLP in conjunction with United Benefit Advisors is presented by Spencer Fane Britt & Browne LLP in conjunction with United Benefit Advisors Kansas City Omaha Overland Park www.ubabenefits.com St. Louis Jefferson City www.spencerfane.com
Summary of Benefits and Coverage: Complying with the New “SBC” Disclosure Rules Chadron J. Patton Julia M. Vander Weele April 17, 2012
Presenters Chadron Patton, JD Associate cpatton@spencerfane.com 913-327-5137 Julia Vander Weele, JD Partner jvanderweele@spencerfane.com 816-292-8182 3
Agenda Overview Covered Plans Appearance and Language Content and Format Timing and Distribution Penalties and Enforcement Employer Action Steps 4
Overview Health Care Reform legislation created new Summary of Benefits and Coverage (“SBC”) and Uniform Glossary Consistent format intended to allow plan participants to easily understand and compare health coverage options 5
Overview Final regulations issued February 9, 2012 Regulations include template for SBC and Uniform Glossary 24 additional FAQs issued March 19, 2012 www.dol.gov/ebsa/faqs/faq-aca8.html 6
Overview Applies to: Grandfathered Non-grandfathered plans Fully insured Self-funded plans 7
Effective Date Original effective date was March 23, 2012 (but delayed by final regulations) For participants and beneficiaries who enroll (or re-enroll) through an open enrollment period, the first open enrollment period beginning on or after September 23, 2012 For all others (including new hires and special enrollees), the first day of the first plan year that begins on or after September 23, 2012 8
Good Faith Compliance During the first year that SBC requirements apply, Departments will not impose penalties on plans and insurers that are working in good faith to provide the required SBC content The Departments’ goal is to achieve: Maximum uniformity for SBC recipients Certainty for plans and insurers that must provide SBCs 9
Covered Plans Applies to “group health plans” Medical and prescription drug Dental and vision (unless “excepted benefit”) Health Reimbursement Arrangements (“HRAs”) Wellness programs and EAPs (if provide “medical care”) Counseling under EAP Biometric screenings in wellness program 10
Covered Plans - Exceptions Does not apply to: “Excepted benefits” under HIPAA (e.g., stand- alone dental and vision) Most health FSAs HSAs – generally not considered “group health plans” but information regarding HSA can be included with SBC for the high-deductible health plan 11
Excepted Benefits – Dental/Vision Provided under a separate policy, certificate, or contract of insurance; or Otherwise not an integral part of group health plan Separate election and separate charge 12
Excepted Benefits – Health FSAs Health FSAs that are funded solely through employee salary reductions are excepted benefits, or If employer contribution is either less than $500 or no more than a dollar-for-dollar match If not “excepted benefit” same rules as HRAs (integrated vs. stand-alone) 13
HRAs HRAs are generally considered “group health plans” and not “excepted benefits” Stand-alone HRA must provide its own SBC “Integrated” HRA can combine SBC for major medical plan with description of HRA in appropriate SBC template spaces 14
Physical SBC Requirements SBCs must satisfy specific requirements relating to: Appearance Language Content Format 15
Appearance/Format SBCs must: Be provided in a form authorized by the Departments Be completed consistent with corresponding instructions Be presented in a uniform format Not exceed four pages in length (i.e., four double-sided pages) Not include print smaller than 12-point font 16
Separate SBCs? Employers do not have to provide separate SBCs for each coverage tier (e.g., self, self plus one, or family) within a benefit package Same rule applies to separate cost-sharing structures (e.g., deductibles, copays, or coinsurance) and coverage add-ons (e.g., health flexible spending accounts, health reimbursement arrangements, health savings accounts, or wellness programs) 17
Combined with SPD SBCs may be provided either on a stand- alone basis or in combination with other summary materials (e.g., the SPD) so long as: The SBC information is intact and prominently displayed at the beginning of the materials (e.g., immediately after the SPD’s table of contents) The timing rules for providing SBCs are satisfied 18
Language SBCs must be provided: In a culturally and linguistically appropriate manner Same standard for providing appeals notices Using terminology that is understandable by the average plan enrollee 19
Non-English Language Requirements If SBCs are provided in US counties in which at least 10% of the population is literate only in the same non-English language, plans and insurers must provide: Interpretive services in the non-English language Written translations of the SBC, on request, in Spanish, Chinese, Tagalog, and Navajo Disclosure, in the English version of SBCs, of the availability of language services in the relevant non-English language 20
Affected Counties The currently affected counties include: San Francisco County, California (Chinese) Two counties in Alaska (Tagalog) Apache County, Arizona; McKinley County, New Mexico; and San Juan County, Utah (Navajo) Numerous counties of 24 states and Puerto Rico (Spanish) The full list of counties may be accessed at: http://www.cciio.cms.gov/resources/factsheets/clas-data.html 21
Content Uniform definitions of standard insurance and medical terms Description of the coverage, including cost- sharing, for each of the categories of “essential health benefits” described in PPACA, and for other benefits, as identified by HHS Exceptions, reductions, and limits on coverage 22
Content (continued) Cost-sharing provisions, including deductible, co-insurance and co-payment obligations Renewability and continuation of coverage provisions Examples of common benefits scenarios based on recognized clinical practice guidelines 23
Content (continued) For coverage beginning on or after January 1, 2014, a statement of whether: the plan or coverage provides “minimum essential coverage” the plan or coverage meets applicable minimum value requirements A statement that: the SBC is only a summary; and the plan document, policy, insurance certificate, or contract should be consulted to determine the governing contractual provisions 24
Content (continued) Contact information, such as: a customer service telephone number for questions; or an internet address for obtaining a copy of the plan document or insurance policy, certificate, or contract Internet address or similar contact information for obtaining a list of network providers 25
Content (continued) Internet address or similar contact information for obtaining information on prescription drug coverage A uniform glossary, including: an internet address for obtaining the uniform glossary; a contact phone number for obtaining a paper copy of the uniform glossary; and a disclosure that paper copies of the uniform glossary are available 26
Content (continued) SBCs do not need to include: Information on premiums, or Cost of coverage (for self-insured plans) SBCs are not required to include a statement about whether the plan is grandfathered under health care reform, though plan sponsors may voluntarily choose to include one 27
State Law Requirements Insured plans may need to comply with state laws that require separate, additional disclosure requirements If the required information is in addition to SBC mandated content, it must be provided separate from the SBC but could be distributed at the same time 28
Coverage Examples Regulations allow the Departments to identify up to six coverage examples for inclusion in SBCs However, the compliance guidance includes information for only two coverage examples: Having a baby (normal delivery) Managing Type II diabetes (routine maintenance of a well-controlled condition) 29
Coverage Examples (cont.) The coverage examples include: A brief description of major services related to the condition Sample care costs and related categories Standard assumptions Specific medical condition information, including dates of service, diagnosis and billing codes, and allowed charges associated with each scenario 30
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