Many employers were holding their breath for the Supreme Court decision on the Patient Protection and Affordable Care Act. The decision to uphold the law means that employers who provide health insurance have some very specific rules they must adhere to this fall, or they face hefty fines.
The biggest item being talked about with many of my clients is a new document called a Summary of Benefits and Coverage. I’ve talked about it before, but now it is crunch time. This document needs to be completed and distributed by Sept. 23 for new hires, and for most organizations, with this fall’s open enrollment materials for current plan participants – that includes retirees if you still offer them coverage, unless you have retiree-only plans.
What is an SBC? It is a document that is supposed to work kind of like a nutrition label, but for group health plans. The idea is that participants could look at the SBC for the plans they’re currently enrolled in and the plans they are considering and be able to make an educated decision about the costs and benefits. The reality is that comparing group health plans is a lot more complicated than what can be distilled in a simple comparison chart. Nevertheless, if you provide health insurance to more than 50 people in your company, you need to get this done.
The Department of Labor provides templates on its website at dol.gov/ebsa/healthreform. If your plan is fully insured, it is the responsibility of the provider to issue these. If you are self-insured, it is your responsibility to provide this, but many organizations are leaning on their health plan administrators to help them complete the required the information.
A couple of key items employers are overlooking about the creation and distribution of the SBC are when they need to ensure the documents are translated and how they are going to hand them out. Regulations were slow in coming about these points and are still a little vague. You should work with your legal counsel to confirm, especially if you are self-insured, but generally, here are some guidelines.
On the translation issue, the law says the document must be “culturally and linguistically appropriate,” and it lists four languages that the document may need to be translated into: Chinese, Navajo, Spanish and Tagalog. If you have participants in your plan that live in counties where 10 percent or more of the population primarily speak one of these languages, then you have to translate. The DOL website listed above has a complete list for all states. In Idaho, four counties meet this criterion, and if you have employees in them, you will need to ensure your SBCs are available in Spanish. Those counties are Clark, Minidoka, Owyhee and Power.
Distributing SBCs is another tricky question, and for employers with many different SBCs it can also be quite costly. Generally, electronic distribution is allowed, but must follow the same DOL rules established for distributing Summary Plan Descriptions electronically. Participants must be notified of the electronic SBC and the significant importance of the document. This can be done through email with a link to the document and must include safeguards like a return receipt. Merely making the document available online is not enough. Participants must know a paper copy can be requested and received within 30 days of the request. And, if not all of your employees sit at a desk and a computer all day, you have to follow additional distribution requirements that include gaining their consent to receive the document in electronic form.
None of this is easy. And plans with carved-out benefits, benefit provisions that vary by employee, and special programs like wellness and HRAs will require special coordination. If you haven’t started working on SBCs yet – if you were waiting to see what the Roberts court would decide – now you have your answer. You have to do this. Your organization could be subject to a fine of $1,000 for each individual who doesn’t get an SBC. If you have just 50 employees, that’s $50,000. So, leverage the DOL’s online resources, reach out to your plan administrator and, depending on the complexity, get some consulting help. But roll up your sleeves and get it done.
Michelle Hicks, a senior professional in human resources, is a director in the communication practice of Buck Consultants, a Xerox company.