All Employers Must Give the “Summary of Benefits and Coverage” (SBC) to their Employees and Dependents

 

November 2012 Newsletter from Bruce Jugan

 

The major components of Health care reform known as the Affordable Care Act (ACA) go into effect January 1, 2014. However, beginning September 23, 2012, the ACA requires all employers to give employees a Summary of Benefits and Coverage (SBC) when their plan renews or changes. These are the rules surrounding distribution of the SBC.

    1. No penalties during the first year for plans and sponsors showing good faith effort to comply (See: “FAQs about Affordable Care Act Implementation Part IX”, Question 8″.)
    2. Insurance companies will create and distribute the SBC to the employer.
    3. Employers must distribute the SBC to employees and dependents. For groups with 2-50 employees, Blue Shield will distribute the SBC to employees and dependents during the initial rollout period (See: “Summary of Benefits and Coverage Guide for producers”).
    4. An employer (ER) can distribute SBCs to employees (EE) and dependents in many different ways. Note, however, that only option A and B below are likely to meet the employer’s legal obligations.
      1. Mail with “certificate of mailing” (COM) the SBC, to the last know address of the EE and dependents. This provides evidence that the ER mailed the SBC. Keep copy of the certificate in EE file. COM costs $1.15 per letter.
      2. Mail with “certificate of mailing” a notice that the SBC is available upon request, to the last know address of the EE & dependents.
      3. Email the SBC, or link to the SBC, to the EE’s email address. Request EE forward/share SBC with dependents.
      4. Email to EE’s email address a notice that the SBC is available upon request.
      5. Hand out the SBC to the EE and have the EE sign an acknowledgement of receipt.
      6. Hand out a notice that the SBC is available upon request and have the EE sign an acknowledgement of receipt.
      7. Hand out the SBC to EEs at the office with NO acknowledgement form.
      8. Hand out a notice that the SBC is available with NO acknowledgement form.

 

DISCLAIMER: Consult your attorney or tax advisor for legal advice regarding compliance with the Affordable Care Act. BenefitsCafe.com, DBA Professional Benefits & Insurance Services, does not give legal or tax advice.