New ACA Guidance on SBC Templates, Cost-Sharing Limits, and Extended Transition Relief for Existing Coverage

Health-Care-Reform-ChecklistEmployers should take note of important new agency guidance affecting a number of Affordable Care Act (ACA) requirements over the next year.

Implementation Date for Using New Proposed SBC Template
A new FAQ regarding the applicable date for using the new proposed summary of benefits and coverage (SBC) template and associated documents provides the following expected implementation dates:

  • Health plans and issuers that maintain an annual open enrollment period will be required to use the new SBC template and associated documents beginning on the first day of the first open enrollment period that begins on or after April 1, 2017 with respect to coverage for plan years beginning on or after that date.
  • For health plans and issuers that do not use an annual open enrollment period, use of the new proposed SBC template and associated documents would be required beginning on the first day of the first plan year that begins on or after April 1, 2017.

2017 Cost-Sharing Limits Released
New guidance from the U.S. Department of Health and Human Services updates the limit on annual out-of-pocket cost-sharing for coverage of essential health benefits by non-grandfathered group health plans. For 2017, annual out-of-pocket expenses may not exceed $7,150 for self-only coverage or $14,300 for family coverage.

Small Businesses May Be Able to Keep Existing Health Coverage Through Policy Years Beginning On or Before October 1, 2017
A previously extended transitional policy which allows health insurance issuers, at their option, to continue small business group coverage that would otherwise be terminated or cancelled has been extended furtherto policy years beginning on or before October 1, 2017, provided that all policies end by December 31, 2017. Health insurance issuers that renew coverage under the extended policy are required to provide standard notices to affected small businesses for each policy year.

Policies subject to the transitional relief will not be considered to be out of compliance with some of the ACA’s key provisions, including:

  • The requirement to cover essential health benefits;
  • The requirement that any variations in premiums be limited with regard to a particular plan or coverage to age and tobacco use, family size, and geography; and
  • The requirements regarding guaranteed availability and renewability of coverage for employers.

Be sure to visit our Health Care Reform section to stay on top of the latest ACA updates.

Final Rules Revise Summary of Benefits and Coverage (SBC) Requirements

paperworkNew final regulations amend the existing rules on the summary of benefits and coverage (SBC) notice requirements under Health Care Reform for SBCs with respect to coverage that begins on or after September 1, 2015.

Among other things, the new regulations place additional obligations on group health plans that enter into a binding contract with another party to provide the SBC (such as the insurer). To satisfy the requirement to provide the SBC, such a plan must:

  • Monitor performance under the contract;
  • Correct noncompliance as soon as practicable, if the plan has knowledge that the SBC is not being provided in a manner that complies with the law and has all information necessary to correct the noncompliance; and
  • Communicate with affected participants and beneficiaries and begin taking significant steps as soon as practicable to avoid future violations, if the plan has knowledge that the SBC is not being provided in a manner that complies with the law and does not have all information necessary to correct the noncompliance.

A new SBC template and associated documents are expected to be finalized, separately from the final regulations, by January 2016 and will apply to SBCs for coverage beginning on or after January 1, 2017. Until then, the previously authorized templates may be used without penalty (including the original template), provided the SBC is furnished with a cover letter or similar disclosure that includes additional language indicating whether the plan provides “minimum essential coverage” and “minimum value.”

Be sure to visit our Summary of Benefits and Coverage (SBC) section for additional information.