Summary of Benefits and Coverage (SBC)

Are you compliant?

Keeping your employees up to date on the benefits provided by your healthcare plan is not always an easy task. But, it's the law.

As part of healthcare reform, you are required to provide your employees with clear, consistent and comparable information about their health plan benefits and coverage. The law mandates that this information be communicated in two documents that together help employees understand and evaluate their health insurance choices.

  • Summary of Benefits and Coverage (SBC)
  • Uniform Glossary of Terms

Summary of Benefits and Coverage (SBC)
The Summary of Benefits and Coverage document is intended not only to help your employees better understand the coverage they have, but also to allow them to easily compare different coverage options. The SBC summarizes the key features of the health plan including covered services, cost-sharing provisions, and coverage limitations and exclusions. An individual will receive an SBC when shopping for coverage, when enrolling in coverage, at each new plan year, and within seven business days of requesting a copy.

The SBC contains the following details:

  • Summary of plan benefits for in-network vs. out-of-network care
  • Excluded services under the plan
  • Rights to continue coverage
  • Grievance and appeal rights
  • Information in four other languages on how to obtain information
  • Statement on whether the plan provides "minimum essential coverage"
  • Statement on whether the plan meets "minimum value standard"
  • Coverage examples to illustrate what benefits the plan might provide, and what the out-of-pocket costs might be, for specific scenarios including having a baby and managing type 2 diabetes.

Uniform Glossary of Terms
The Uniform Glossary of Terms is a document that is intended to supplement the SBC by providing your employees with a "dictionary" to help them understand the most commonly used terms in health insurance, such as "deductible" and "co-payment." The Uniform Glossary of Terms must be available to employees upon request.

Who Creates the SBC?
The SBC is a customized document that describes the specific benefits offered through your Plan. Although the format is standardized and specific information must be included, each SBC is a unique document. For insured plans, the health insurer will prepare the SBC for its client's medical plan. For self-insured plans, the plan's third party administrator will typically prepare the SBC.

How Are Carved-Out Benefits Handled in an SBC?
The SBC for any healthcare (medical) plan ideally describes both the medical benefits and the "carved-out" prescription drug benefits in one document. However, in some situations it is permissible to describe the medical benefits and prescription drug benefits in separate SBCs. Consult with your legal advisor or benefits consultant as to when separate SBCs are permissible.

How AIM Can Help
Whether you are responsible for your company's health plans or involved in managing the health plans of multiple companies, AIM has the expertise and resources to assist you in meeting your compliance obligations, including the creation of SBCs for your employees. AIM specializes in crafting documents that plan participants can read, understand, and use, regardless of their background or level of healthcare knowledge. 

For more information about SBCs and other consulting resources available from AIM, please contact us at 1-866-284-4995