SUMMARY OF BENEFITS AND COVERAGE (SBC) AND GLOSSARY

Summary of Benefits and Coverage (SBC) and Glossary

The ACA requires that employers provide a Summary of Benefits and Coverage (SBC) for each benefit package offered by a plan for which a participant is eligible. The SBC and Glossary of Health Coverage and Medical Terms must be provided to all members by the first day of open enrollment (or eligible enrollment). Employers can be penalized up to $1,000 for each employee who fails to receive the SBC.

An SBC is a customized document that:

  • Helps members better understand the benefits offered
  • Allows members to easily compare different coverage options
  • Explains the employer’s health plan benefits in easy-to-understand language and in the
    required consistent format

According to the ACA, the document must include:

  • A detailed summary of the health plan’s coverage
  • Examples of how the plan would pay for healthcare services
  • The phone number and website for customer service
  • The Glossary of Health Coverage and Medical Terms

The SBC must also indicate whether the health plan provides:

  • Minimum essential coverage1 and
  • Minimum value2

More on SBC:

April 2017 edition of SBC template and supporting documents
Health plans and issuers that maintain an annual open enrollment period will be required to use the April 2017 edition of the SBC template and associated documents beginning on the first day of the first open enrollment period that begins on or after April 1, 2017, for plan years beginning on or after that date. For plans and issuers that do not use an annual open enrollment period, this SBC template and associated documents are required beginning on the first day of the first plan year that begins on or after April 1, 2017.

Here are the links to the revised documents:

Prior to April 2017
For more information on SBCs, read:

1Minimum essential coverage refers in general to coverage under a government-sponsored program, such as Medicare or Medicaid; an eligible employer-sponsored plan; a plan offered in the individual insurance market; or other coverage described in applicable regulations. It does not include HIPAA-excepted benefits such as critical illness or hospital indemnity insurance.

2A group health plan provides minimum value if the percentage of the total allowed costs of benefits provided under the plan is at least 60 percent includes substantial coverage of both inpatient hospital and physician services.