self-funded coverage;
• Coverage examples for common
benefits scenarios adopted by HHS.
When Must a group Health Plan
Deliver an sBC to Plan Participants
and Beneficiaries?
At Enrollment—The plan must provide
an SBC for all options for which an
individual is eligible to enroll with any
written application materials distributed
by the plan. If the plan does not distribute
written application materials for enrollment, the SBC must be distributed no
later than the first day the participant
is eligible to enroll. In addition, if there
is any change to the SBC before the first
day of coverage, the plan must provide an
updated SBC no later than the first day of
coverage. The plan also must provide an
SBC to HIPAA special enrollees within
seven days of a request for enrollment.
Is there a Penalty for not Providing
an sBC?
Yes—a group health plan that willfully
fails to provide an SBC will be subject
to a fine of up to $1,000 for each failure
(assessed by DoL or HHS, depending
on the type of coverage). A failure with
respect to each participant and beneficiary will constitute separate offenses.
Failures also are subject to excise taxes
under the Internal Revenue Code.
sent to addresses in certain counties that
have been identified by the U.S. Census
Bureau as having a concentration of
non-English speakers. A recent amendment to the appeals interim final rule
includes a chart of such counties and the
applicable languages (which are Spanish,
Mandarin, Navajo, and Tagalog) ( 76
Fed. Reg. 37208, June 24, 2011).
At Renewal—The plan must provide an
SBC for the option in which the individual is enrolled at renewal. If a written
application is required for renewal,
the plan must provide the SBC no later
than the date application materials are
distributed. If benefits automatically are
renewed, the plan must provide the SBC
at least 30 days prior to the first day of
the new plan year.
Must the sBC Be translated into
non-English Languages?
The proposed rule requires that the SBC
be provided in a “culturally and linguistically appropriate manner.” The rule says
that a plan will be considered to meet this
requirement if thresholds and standards
under the PPACA appeals rules are met.
The appeals rule requires plans to disclose
the availability of language services and
translate adverse benefit determinations
into a non-English language for notices
May the sBC Be Delivered
Electronically?
For ERISA group health plans, the SBC
may be delivered in electronic form if the
delivery meets ERISA’s general delivery
rules at 29 CFR § 2520.104b- 1 (which
include the electronic delivery safe
harbor). For nonfederal governmental
plans, the SBC may be delivered in electronic form if the delivery meets either
ERISA’s general delivery rule or special
rules related to electronic delivery for
individual coverage.
contrIbutorS
Christy tinnes is a Principal in the Health & Welfare Group of Groom Law
Group in Washington. She is involved in all aspects of health and welfare plans,
including ErISA, HIPAA portability, HIPAA privacy, cobrA, and Medicare.
She represents employers designing health plans as well as insurers designing
new products. Most recently, she has been extensively involved in the insurance market reform and employer mandate provisions of the health-care
reform legislation.
Upon Request—If a participant or beneficiary requests, the plan must provide an
SBC for any coverage option for which
the individual is eligible as soon as practicable, but no later than seven days after
request.
Brigen Winters is a Principal at Groom Law Group, chartered, where he
co-chairs the firm’s Policy and Legislation group. He counsels plan sponsors,
insurers, and other financial institutions regarding health and welfare, executive
compensation, and tax-qualified arrangements, and advises clients on legislative and regulatory matters, with a particular focus on the recently enacted
health-reform legislation.
Modification of SBC Information—If
the plan makes a mid-year material
modification to coverage that would
affect the content of the SBC, the plan
must provide notice of the modification
no later than 60 days prior to the date
the modification becomes effective. The
modification notice can be either a separate notice describing just the material
modification or an updated SBC.
These Q&As first appeared on www.plansponsor.com in August and September 2011.
As health-care law is evolving rapidly, there may be further developments since the
initial publication.
PLEASE NOTE: This feature is intended to provide general information only, does
not constitute legal advice, and cannot be used or substituted for legal or tax advice.
got a health-care reform question? You can ask your health-care reform legisla-
tion question online at www.surveymonkey.com/s/second_opinions.
You can find a handy list of Key Provisions of the Patient Protection and
Affordable Care Act and their effective dates at www.groom.com/Hcr-chart.html.
