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Second Year SBCs: PPACA Guidance for Next Year

Posted in Plan Administration, Welfare Plans

As we continue to get closer to the January 2014 deadline for PPACA compliance, we continue to get additional guidance from the DOL.  On 4/23, the DOL issued another set of FAQs addressing the summary of benefits and coverage (SBC) disclosure requirement under health care reform.  These FAQs reflect changes to SBCs distributed for coverage that begins on or after January 1, 2014, and before January 1, 2015, which is generally referred to as the "second year of applicability."  Remember that the SBCs are supposed to provide a summary of coverage offered to be compared against other available coverage options (like the exchanges).  Plan sponsors should have issued SBCs for coverage in place before January 1, 2014, so now we have some guidance for what SBCs will look like.

The FAQs address issues related to providing SBCs in the second year of applicability.  The updated SBC template and sample completed SBC are for use in the second year of applicability.  The good news is that these documents make no changes to the uniform glossary, the SBCs "Why This Matters" language, coverage examples, or related "Instructions for Completing the SBC."  The only significant change to the SBC template and completed SBC is the addition of statements addressing whether the plan or coverage provides minimum essential coverage meets the minimum value requirements.

The FAQs contain several items related to the content of the second-year SBCs and adjustments that have to be made about benefit limits and also contains some explanation of transitional relief that is available to plans that already started writing the second years SBCs.  I think it is odd that they decided to publish this particular guidance when so many more questions need to be answered, but if preparing your second year SBC is on your current to-do list, make sure to review this new guidance.