In compliance with the Affordable Care Act (ACA) and to help businesses comply with regulations, the Department of Labor (DOL) has updated its template for the important Summary of Benefits and Coverage (SBC) document as well as the instructions and other related materials. This recent round of updates, the first since 2016, reflects changes made by the Tax Cuts and Jobs Act (TCJA). These updated documents are for use for plan years beginning January 1, 2021.
Changes to the SBC Template
The major change to the template reflects the removal of the penalty for violating the ACA’s individual mandate. Other changes include addressing what is considered minimum essential coverage, the types of plans that qualify for this, and the individuals who are eligible for minimum essential coverage but who do not qualify for a tax credit.
There are also a number of minor changes in the template such as adding a “Not Applicable” option for determining whether a plan provides minimum value since it is not relevant to individual market coverage. The new materials also include sample completed SBCs which illustrate various arrangements. One illustrates a zero cost-sharing arrangement while another shows a limited cost-sharing arrangement.
The instructions for group and individual health plans also changed as part of this update. The instructions mirror the changes made to the template. They also clarify the rule for rounding dollar values in cost-sharing and out-of-pocket limits. According to the new instructions, if a company is applying rounding and this results in an amount that exceeds the actual out-of-pocket limit for self-only coverage, then the actual out-of-pocket limit goes onto the template instead of the rounded number.
Uniform Glossary
Every SBC must include a uniform glossary. In the latest update, the DOL removed the definition of “Individual Responsibility Requirement” and other references to the no longer applicable individual mandate. The definitions now state that an individual who is eligible for minimum essential coverage may not qualify for a premium tax credit.
Using the new SBC Template
Plans will need to adopt the new SBC template for plan years beginning in the first of 2021, so it’s worth planning for now. HHS also has SBC documents that will need to be implemented in the same timeframe including a coverage example calculator and other information related to coverage examples. The employee benefits attorneys at Hall Benefits Law work with our clients to implement these changes and others as regulations continue to evolve. We want our clients to stay on top of required changes and not face penalties or lawsuits due to missed deadlines resulting in non-compliance. Call our office today at 678-439-6236, or visit the Hall Benefits Law website to learn more about our services.
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