Effective January 1, 2014 the Department of Labor (DOL) and Department of Health and Human Services (HHS) will be implementing and enforcing the Summary of Benefits and Coverage (SBC) provision of the Patient Protection and Affordable Care Act (PPACA).
What is the Summary of Benefits and Coverage (SBC)?
The SBC is a 4 page overview of health plan benefits, cost sharing and limitations. Its goal is to more easily convey standard information so that employees can easily compare medical plans and make informed decisions regarding which plan they’d like to enroll for.
Additionally, the SBC must include a required set of coverage examples showcasing how the plan works, as well as phone numbers and internet addresses for obtaining copies of the plan’s corresponding documents.
Under the PPACA, each Summary of Benefits and Coverage must be accompanied by the Uniform Glossary too. The Uniform Glossary is a list of commonly used health care terms and their definitions that was designed for use with the SBC.
What’s Important for Employers to Know?
For employers, it’s especially important that the SBC states whether the plan provides “minimum essential coverage” as required by the individual mandate and also whether or not the plan meets the “minimum value” requirement, meaning that the plan pays at least 60% of allowed charges for covered services as required by the employer mandate.
Health insurers and self-funded group health plans must provide the SBC to employees when they enroll in coverage for the first time, prior to the beginning of each new plan year, and/or within seven days of an employee requesting it.
The Benefit of Working with a PEO…
Although the DOL and HHS have provided a new template that incorporates all of the above, there’s no denying that this is a lot of administrative work on top of your already busy schedule. But there’s good news for those that work with a Professional Employer Organization (PEO). Liability is shared through the co-employment relationship which lightens the burden and limits the risk associated with the SBC non-compliance penalty (which is $1,000 per enrollee). And, HRIS technology made available by many PEOs makes current information (including SBC’s) available at the employee’s fingertips at any time through the employee self-service portal!
Is your business looking to ensure a compliant workplace in the upcoming year? In addition to reducing liability and risk surrounding health insurance, working with a PEO can also result in lower health care costs. Call 877-636-9525 or Get a Free Quote Online to find the best Professional Employer Organization for you.