SBC Final Rules to Be Issued Soon; Templates Delayed | Practical Law

SBC Final Rules to Be Issued Soon; Templates Delayed | Practical Law

The Departments of Labor (DOL), Health and Human Services (HHS) and Treasury issued an FAQ addressing the timeframes in which they expect to issue final regulations, templates and related documents under the Affordable Care Act's (ACA's) summary of benefits and coverage (SBC) requirement.

SBC Final Rules to Be Issued Soon; Templates Delayed

Practical Law Legal Update 1-607-2047 (Approx. 3 pages)

SBC Final Rules to Be Issued Soon; Templates Delayed

by Practical Law Employee Benefits & Executive Compensation
Published on 31 Mar 2015 • USA (National/Federal)
The Departments of Labor (DOL), Health and Human Services (HHS) and Treasury issued an FAQ addressing the timeframes in which they expect to issue final regulations, templates and related documents under the Affordable Care Act's (ACA's) summary of benefits and coverage (SBC) requirement.
On March 31, 2015, the Departments of Labor (DOL), Health and Human Services (HHS) and Treasury (the Departments) issued an FAQ addressing the timeframes in which they expect to issue final regulations, a revised template and related documents involving summaries of benefits and coverage (SBCs) under the Affordable Care Act (ACA) (see Practice Note, Summaries of Benefits and Coverage under the ACA). In proposed regulations issued in December 2014, the Departments indicated that their updates to the original SBC regulations, template and related documents would apply beginning September 1, 2015 (see Legal Update, Proposed SBC Rules Would Apply in Late 2015).
In the FAQ, the Departments indicate that they intend to issue the final regulations "in the near future". The final regulations are expected to apply for:
  • Coverage that begins or renews on the first day of the first plan year beginning on or after January 1, 2016.
  • Fall 2015 open enrollment periods for coverage that begins on or after January 1, 2016.
The FAQ also announces a delayed applicability date for the revised SBC template and related documents. Specifically, the Departments anticipate that the template and related documents will:
  • Be finalized by January 2016.
  • Apply to coverage that begins or renews on the first day of the first plan year beginning on or after January 1, 2017 (including fall 2016 open enrollment periods for coverage beginning on or after January 1, 2017).
According to the Departments, the delay will allow additional time for consumer testing and public comment regarding the template and related documents, including input from the National Association of Insurance Commissioners, which (by statute) has played a significant role in implementing the SBC requirement.

Practical Impact

At least some of the changes under the December 2014 proposed regulations involved content revisions to the original SBC regulations. If those changes are finalized as proposed, employers and their advisors could be left in the difficult position of having to update their SBC documents without the benefit of the revised templates and related documents. However, the Departments could offer (as they've done in the past) a temporary enforcement safe harbor regarding SBCs provided for the fall of 2015 and before the updated templates are issued.
Moreover, by the Departments' own description, some of the changes to the SBC template are significant and could therefore require additional lead-time for plans to incorporate the changes. For example, the sample completed template issued with the December 2014 proposed regulations reduced the length of the existing template from four double-sided pages to two-and-a-half double-sided pages.
These issues will hopefully be addressed in the soon-to-be issued final regulations.