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An Overview of ACA’s Summary of Benefits and Coverage

By Amy Zell


The Patient Protection & Affordable Care Act (ACA) requires all group and individual health plans to provide applicants, enrollees, and policyholders (or certificate holders) with documentation outlining their benefits and coverage. The “Summary of Benefits and Coverage”  (SBC) document comes in a standardized format containing information about health-plan coverage that is supposed to allow consumers to easily identify and compare the benefits available to them.


The final regulations on SBCs and the related Uniform Glossary, including model templates and instruction guides, were issued Feb. 14, 2012. The Departments of Labor, Health & Human Services, and Treasury began addressing some of the concerns surrounding SBC implementation in numerous “FAQs About Affordable Care Act Implementation.” FAQs VII, VIII, IX, X, and XIV address the SBC requirements. 


The SBC rules became effective in 2012 and continue to apply in future plan years. The final regulations apply to group health plans and health-insurance issuers. The requirement does not apply to stand-alone retiree health plans or benefits that qualify as HIPAA-excepted benefits such as stand-alone vision or dental coverage. Plans must provide SBCs to currently enrolled employees, former employees and their covered dependents, as well as anyone who is eligible to enroll in the plan. 


FAQ VIII clarified which circumstances will trigger the requirement to provide an SBC to a participant or beneficiary in a group health plan.  Generally, plans or issuers must provide the Summary of Benefits and Coverage at the time of application for coverage, upon renewal of coverage, at the time of a special enrollment, and upon request. The timing requirements for SBC distribution vary depending on which of these events occurs.


In general, plans must provide the SBC along with annual open enrollment materials, no later than 30 days prior to the first day of the new plan or policy year, if a plan allows automatic renewals of coverage. Plans must provide the SBC to special enrollees within 90 days after coverage commences. 


At times other than open or special enrollment, plans must provide the Summary of Benefits and Coverage with any written information provided by the plan as part of the enrollment process or, no later than the first day the individual becomes eligible, if the plan does not provide any such written materials.


If any of the information on the SBC changes between the time of application and before the first day of coverage, plans must provide an updated SBC no later than the first day of coverage. Plans must also provide an SBC within seven business days of a request, and if the document is provided electronically, recipients must have the option to receive a paper copy upon request.


The FAQs also provided much-needed relief from the rigid SBC template requirements, allowing plans and issuers to make minor adjustments to the SBC format, such as changing row and column sizes, eliminating the need to repeat the header and footer on every page, and permitting information to roll from one page to another, provided the information is understandable.


FAQ VIII and IX provided clarification on the electronic-delivery standards, and provided sample language for a postcard or e-card to be used in connection with website posting of the SBC. FAQ VIII also provided guidance on the requirement to provide the SBC in a culturally and linguistically appropriate manner.


The federal agencies provided clarification on the second-year requirements on April 23, 2013, in FAQ XIV. While the departments originally anticipated adding a third coverage example for the second-year SBCs, FAQ XIV states that the departments are not going to require a third-coverage example at this time. FAQ XIV extends the various enforcement relief provisions from the first year of applicability, including the coverage-example calculator safe harbor. 


The federal agencies provided a new second-year SBC template, which now includes two statements regarding whether the plan provides minimum essential coverage and minimum value. FAQ XIV allows plans that cannot add these two new paragraphs to continue to use the first-year template, and provide the required information by cover letter or similar disclosure instead.  FAQ XIV also permits plans to remove the template material on annual dollar limits. 


The departments reiterate in FAQ XIV that their basic approach to ACA implementation, including the SBC requirement, will continue to emphasize assisting, rather than imposing penalties on, plans, issuers, and others working diligently and in good faith to understand and comply with the law.


As insurance companies, employers, and third-party administrators work to interpret, understand, and comply with the 2014 ACA requirements, knowing the departments are continuing to adopt this approach is welcome news.




Amy Zell is staff attorney and plan benefit analyst at POMCO Group. Contact her at or view her blog posts on health-care reform at







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