In November 2019, the DOL issued new templates and instructions for completing Summaries of Benefits and Coverage (SBCs). As a reminder, the SBC is a concise document that summarizes, in simple and clear language, information about a health plan’s covered benefits, cost-sharing provisions, and limitations and exceptions. The format of the SBC is determined by the DOL and all health plans must use the prescribed format. Health plans must update and distribute the SBC yearly.
The main change to the SBC is the revision of the section addressing minimum essential coverage. Previously, the SBC reflected the old “individual mandate” rule, which required an individual who was not covered by a health plan that provided minimum essential coverage to pay a tax penalty. The updated SBC reflects the new rule implement by the 2017 Tax Cuts and Jobs Act, which effectively abolished the individual mandate by reducing the penalty to zero. Instead of mentioning the penalty as it did previously, the new SBC simply notes that individuals who are eligible for certain types of minimum essential coverage may not be eligible for premium tax credits.
The updated SBC incorporates a few additional minor changes. For example, the section reflecting coverage examples has been updated with new estimated costs of treating certain medical conditions. The update also adds information about the Paperwork Reduction Act.
Health plans will need to use the updated SBC for plan and policy years beginning on or after January 1, 2021.