The agencies primarily responsible for enforcing the Patient Protection and Affordable Care Act of 2010 issued 150 pages of final regulations implementing the mandate that group health plans and insurers provide a four-page summary of benefits and coverage to individuals who enroll in health plans.

Under the regulations issued February 9, 2012, plan administrators and insurers must distribute the summaries of benefits and coverage (“SBC”) no later than the first day of open enrollment for the plan year beginning on or after September 23, 2012. For a fully-insured group health plan, the insurer must provide the SBC. For a self-funded (or partially self-funded) plan, the plan administrator (that is, the employer unless the employer has delegated that responsibility) must provide the SBC. For plans that use a calendar-year plan year, this means employers need to ensure that the SBC is distributed by the first day of open enrollment this fall (for the 2013 plan year). Thereafter, the SBC must be distributed to participants who enroll anytime during a plan year beginning on or after September 23, 2012. Although months away, the effort needed to create and distribute SBCs in compliance with the regulations may be daunting for many employers (especially those with self-funded or partially self-funded plans), so employers should begin taking action now. 

The SBC is intended to ensure that information is presented in clear language and in a uniform format that helps individuals better understand the coverage available to them and compare different options. Among other things, the SBC must include a description of coverage, including cost-sharing (e.g., deductibles and co-payments), any exceptions or limitations, coverage examples, and a uniform glossary. The regulations even specify the minimum font size for the SBC. 

It is clear from the preamble to the regulations that the agencies hope the SBC rules will pressure employers, as well as insurers, “to compete on price, benefits, and quality” in group health plan offerings and that this will help mitigate the “inefficiency in the health insurance and labor markets” as perceived by the federal government.