Welfare Benefit Plan ERISA News & Views
June 2010

The newly enacted healthcare reform legislation, PPACA (Patient Protection and Affordable Care Act), added compliance responsibilities for both insurance carriers and employers. Insurance carriers offering insured health plans and Plan Administrators (typically the sponsoring employer, not a "TPA") of self-insured health plans must provide a Summary of Benefits and Coverage ("SBC") to an applicant at the time of application, to an enrollee prior to the time of enrollment or reenrollment, and to a policyholder at the time of issuance of the policy. SBCs may be delivered in paper or electronic form.
Also, a notice of any material modification to the plan or coverage not reflected in the most recently provided summary must be furnished no later than 60 days prior to the date the modification becomes effective, as contrasted with the common practice of delivering Summaries of Benefits to employees before or after their effective date. SBCs will be similar to the typical Summaries of Coverage, but they must be designed to meet uniform standards in length, appearance, language, and content.  
The Secretary of Health and Human Services (HHS) will provide guidance describing the required details of the new SBCs by March 23, 2011, and they must be provided to employees by March 23, 2012. The Department of Labor (DOL) may impose penalties of up to $1,000 for each willful failure to provide an SBC. A failure to provide a summary of benefits and coverage is considered a separate offense for each enrollee, subject to an additional fine.

Employee Benefits Institute of America Weekly Archives
Health Reform Talk, Wolters Kluwer 

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