DOL Proposes Changes To Summary of Benefit & Coverage Rules 

February 25, 2016

Employer and union sponsored group health plans, their sponsoring employers, with insurance and service providers should review and comment on The Labor Department’s proposed changes to the Summary Of Benefits and Coverage rules. http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTYwMjI1LjU1Njk5MjAxJm1lc3NhZ2VpZD1NREItUFJELUJVTC0yMDE2MDIyNS41NTY5OTIwMSZkYXRhYmFzZWlkPTEwMDEmc2VyaWFsPTE3MDcxMTU4JmVtYWlsaWQ9Y3N0YW1lckBzb2x1dGlvbnNsYXd5ZXIubmV0JnVzZXJpZD1jc3RhbWVyQHNvbHV0aW9uc2xhd3llci5uZXQmZmw9JmV4dHJhPU11bHRpdmFyaWF0ZUlkPSYmJg==&&&100&&&https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-04314.pdf.

Enacted as part of the sweeping healthcare reforms made law by the Patient Protection and Affordable Care Act (ACA) , the SBC rules require group health plans to deliver certain standardize information about coverage and benefits provided by the plan in a format dictated by the regulations prior to the beginning of any enrollment period and  at certain other times. The duty to provide the SBC Is in addition to the responsibility to provide a summary plan description, notice of material changes in the plan, and a host of other mandatory notices required by federal law.  

Failure to provide a timely SBC can trigger penalties of up to $125 per participant per day under section 502(c) of the Employee Retirement Income Security Act as well as other exposures.

Employer and other group health plan sponsors, plan administrators and other fiduciaries, insurers and other plan service providers and others involved in the design in administration a group health plan will want to carefully review these changes to consider how they might impact the preparation of the required SBC for their plans taking into account the plan design and the other notification obligations impacting the content of these notices.  Plan sponsors and plans to do Sherry to outsourced plan design, plan communication or plan administration services to ensure those or other service providers also will want to consider these requirements when reviewing and negotiating contracts with the vendors.