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Affordable Care Act Impacts on Group Health Plans

By Warren E. Kingsley and Diane R. Lukin
November 28, 2012

This article provides an overview of the Summary of Benefits & Coverage (SBC) disclosure and employer-shared responsibility mandate implemented under the Affordable Care Act. Information on SBC compliance and your firm's exposure to the shared-responsibility rules follows.

Know Your SBCs

A new SBC should have been included in your firm's open enrollment packets this fall. (Most calendar-year group health plans began distributing SBCs during the fall, 2012, open enrollment period. Non-calendar year group health plans must have begun providing SBCs during the first open enrollment period beginning on or after Sept. 23, 2012.) Required under the Affordable Care Act, the new SBC disclosure's appearance must comply with stringent formatting and content requirements, and be distributed in accordance with regulatory requirements. See joint regulations issued by the United States Treasury, Department of Labor, and Department of Health & Human Services at 26 CFR ' 54.9815-2715; 29 CFR ' 2590.715-2715; 45 CFR ' 147.200. The plan or insurer's failure to provide timely and compliant SBCs could result in penalties as high as $1,000 per recipient. Penalties will not be assessed during the first year, provided group health plans and insurers work diligently and in good faith in providing SBCs that conform to regulatory content, appearance and distribution requirements. The following provides an overview of SBC content and delivery requirements.

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