FAQQSS ABOUTT AFFOORDABLEE
     
CAREE ACTT IMPLEMMENTTATION
     
(PARRT IX)) 
 
May 11, 2012 
 
Set out beloow are addittional Frequuently Asked Questions ((FAQs) regarrding implemmentation oof the 
summary off benefits annd coverage  (SBC) provissions of the  Affordable CCare Act. Thhese FAQs haave been 
prepared joointly by the  Departments of Labor,  Health and  Human Servvices (HHS),  and the Treeasury 
(the Departtments). Likee previously  issued FAQss (available aat http://wwww.dol.gov/eebsa/healthrreform/ 
and http://ccciio.cms.govv/resources//factsheets/), these FAQQs answer quuestions fromm stakeholders to 
help peoplee understandd the new laaw and beneefit from it, aas intended.. 
 
 
Q1:  A previous FAAQ outlinedd the circuumstancess in which aan SBC maay be provvided 
elecctronically.1  The FAQQ discusseed a safe hharbor for pproviding the SBC too 
partticipants oor beneficiaaries coverred under the plan wwho are ablle to effecttively 
access documments provvided in eleectronic foorm at the wworksite.  Are there aany 
addditional saffe harbors for electroonic delivery of SBCss?    
 
Yes.  The Departments  have adopteed the followwing additioonal safe harrbor.  SBCs mmay be provvided 
electronicallly to participants and bbeneficiaries  in connection with their online enrrollment or  online 
renewal of ccoverage unnder the plann.  SBCs alsoo may be proovided electtronically to  participantss and 
beneficiariees who requeest an SBC oonline.  In either case, thhe individuaal must havee the option  to 
receive a paaper copy uppon request.  (In additioon, for indiviidual markett issuers thaat offer onlinne 
enrollment  or renewal,  the SBC maay be provided electroniically, at all issuances, too consumers who 
enroll or renew online,  consistent wwith the reggulations.)   
 
Q2:  Whaat are the ccircumstannces that wwill triggerr  the requirrement for an issuer to 
provvide an SBBC to an inndividual appplying forr coveragee in the inddividual maarket, or 
to aa group heaalth plan oor its sponssor applyinng for coveerage?  In particular, how 
do tthe terms upon appplication aand first dday of coveerage (if thhere are chhanges) 
appply to an individual (oor a plan orr its sponssor) shoppping for covverage?  
 
The regulattions state thhat a health  insurance isssuer must pprovide the SBC upon appplication foor health 
coverage.  FFor this purppose, a plan  or issuer mmust provide  the SBC as soon as praccticable, butt no later 
than seven business dayys after receeiving a subsstantially complete appllication for aa health insuurance 
product.   
 
If an individdual, plan, or plan sponssor is negotiiating coveraage terms affter an appliication has bbeen filed 
and the infoormation reqquired to bee in the SBC  changes, ann updated SBBC is not reqquired to bee 
provided (unless an upddated SBC iss requested) until the firrst day of cooverage.  Thee updated SSBC 
                                                 
1 See Q10 of FFAQs Part VIIII at http://wwww.dol.gov/ebsaa/faqs/faq-aca88.html and 
http://cciio.cmms.gov/resourcces/factsheets/aaca_implemenntation_faqs8..html. 
 
  should reflect the final coverage terms under the contract, certificate, or policy of insurance that was 
purchased.   
 
Q3:  If an individual (or a plan or its sponsor) receives an SBC prior to application for 
coverage, must an issuer automatically provide another SBC upon application, if 
the information required to be in the SBC has not changed? 
 
No. A duplicate SBC is generally not required to be provided at the time of application unless 
requested by the applicant.  However, if by the time the application is filed, there is a change in the 
information required to be in the SBC, the issuer or plan must update and provide a current SBC to 
the individual (or plan or its sponsor) as soon as practicable following receipt of the application, but 
in no event later than seven business days following receipt of the application.  Similarly, if an SBC is 
provided upon application, there is no requirement to provide the SBC again on the first day of 
coverage, unless there is a change to the information that is required to be in SBC or an SBC is 
requested by the applicant.    
 
Q4:  Are issuers required to provide SBCs to group health plans (or their sponsors) 
who are shopping for coverage, but have not yet submitted an application for 
coverage? 
 
Yes, but only in certain circumstances.  The regulations generally provide that an SBC must be 
provided upon request for an SBC or summary information about a health insurance product.  The 
latter phrase is intended to ensure that persons who do not ask exactly for a summary of benefits 
and coverage still receive one when they explicitly ask for a summary document with respect to a 
specific health product.  Other, general questions about coverage options or discussions about health 
products do not trigger the requirement to provide an SBC.  (See also, Q1 regarding electronic 
delivery options for providing SBCs.)   
 
Q5:  A previous FAQ stated that an SBC provided in connection with a group health 
plan may include a reference to the summary plan description (SPD). 2  For SBCs 
provided in connection with coverage in the individual market, can the SBC refer 
to other documents associated with the coverage?  
 
Yes.  While it is not permitted to substitute a reference to any other document for any content 
element of the SBC, an SBC may include a reference to another document in the SBC footer.   In 
addition, wherever an SBC provides information that fully satisfies a particular content element of the 
SBC, it may add to that information a reference to specified pages or portions of other documents in 
order to supplement or elaborate on that information. 
 
Q6:  Are certain electronic features (such as scrolling and expansion of columns) 
permitted when displaying the SBC electronically? 
 
Yes.  Minor adjustments are permitted to accommodate the plans or issuers information and 
electronic display method, such as expansion of columns.  Additionally, it is permissible to display the 
SBC electronically on a single webpage, so the viewer can scroll through the information required to 
be in the SBC without having to advance through pages (as long as a printed version is available that 
                                                 
2 See Q15 of FAQs Part VIII at http://www.dol.gov/ebsa/faqs/faq-aca8.html and 
http://cciio.cms.gov/resources/factsheets/aca_implementation_faqs8.html. 
 
  meets the formatting requirements of the SBC).  However, the deletion of columns or rows is not 
permitted when displaying a complete SBC.     
 
(For more on minor adjustments, see FAQs Part VIII at http://www.dol.gov/ebsa/faqs/faq-aca8.html 
and http://cciio.cms.gov/resources/factsheets/aca_implementation_faqs8.html.  Specifically, Q3 and 
Q4 state that plans and issuers may combine information ...provided the appearance is 
understandable and Q19 states that minor adjustments are permitted...as long as the information is 
understandable.) 
 
Q7:  Some plans or issuers provide web-based or print materials to illustrate the 
differences between benefit package options (including comparison charts and 
broker comparison websites). Is it permissible to combine SBCs or SBC 
elements to provide a side-by-side comparison? 
 
Yes.  Issuers and plans (and agents and brokers working with such plans) may display SBCs, or parts of 
SBCs, in a way that facilitates comparisons of different benefit package options by individuals and 
employers shopping for coverage.  For example, on a website, viewers could be allowed to select a 
comparison of only the deductibles, out-of-pocket limits, or other cost sharing of several benefit 
package options.  This could be achieved by providing the deductible row of the SBC for several 
benefit packages, but without having to repeat the first one or two columns, as appropriate, of the 
SBC for each of the benefit packages.  
 
However, such a chart, website, or other comparison does not, itself, satisfy the requirements under 
PHS Act section 2715 and the final regulations to provide the SBC.  The full SBC for all the benefit 
packages included in the comparison view/tool must be made available in accordance with the 
regulations and other guidance.   
 
Q8:  Under what circumstances can penalties be imposed for failure to provide the 
SBC or the uniform glossary?   
 
PHS Act section 2715(f) states that an entity is subject to a fine if the entity willfully fails to provide 
the information required under this section.   
 
As stated in previous FAQs,3 the Departments basic approach to ACA implementation is: [to work] 
together with employers, issuers, States, providers and other stakeholders to help them come into 
compliance with the new law and [to work] with families and individuals to help them understand the 
new law and benefit from it, as intended. Compliance assistance is a high priority for the 
Departments. Our approach to implementation is and will continue to be marked by an emphasis on 
assisting (rather than imposing penalties on) plans, issuers and others that are working diligently and 
in good faith to understand and come into compliance with the new law.  Accordingly, consistent 
with this guidance, during this first year of applicability, the Departments will not impose penalties 
on plans and issuers that are working diligently and in good faith to comply. 
 
                                                 
3 See FAQs Part I Q1 (available at http://www.dol.gov/ebsa/faqs/faq-aca.html and 
http://cciio.cms.gov/resources/factsheets/aca_implementation_faqs.html) and FAQs Part VIII Q2 (available at 
http://www.dol.gov/ebsa/faqs/faq-aca8.html and 
http://cciio.cms.gov/resources/factsheets/aca_implementation_faqs8.html). 
 
  Q9:  For the first year of applicability,4 can the Departments provide further assistance 
with regard to the coverage examples, such as a streamlined calculator? 
 
Yes.  The Departments are developing a calculator that plans and issuers can use as a safe harbor for 
the first year of applicability to complete the coverage examples in a streamlined fashion; because 
this approach will be less accurate, it will be allowed as a transitional tool for the first year of 
applicability.5  The calculator will allow plans and issuers to input a discrete number of elements 
about the benefit package.  Calculator inputs generally are expected to be taken from data fields used 
to populate the front portion of the SBC template. (See 
http://cciio.cms.gov/resources/other/index.html#sbcug for a list of calculator inputs.)  The output will 
be a coverage example that can be added to the corresponding SBC.  The Departments will also 
provide the algorithm that was used to create the calculator.  The calculator and algorithm will be 
posted at http://cciio.cms.gov/resources/other/index.html#sbcug soon.   
 
Q10:  A previous FAQ discussed the utilization of carve-out arrangements under 
which a plan or issuer contracts with a service provider to help manage certain 
benefits under the plan or policy.6  In another type of carve-out arrangement, a 
plan sponsor may purchase an insurance product for certain coverage from a 
particular issuer and purchase a separate insurance product or self-insure with 
respect to other coverage (such as outpatient prescription drug coverage).  In 
these circumstances, the first issuer may or may not even know of the existence 
of other coverage, or whether the plan sponsor has arranged the two benefit 
packages as a single plan or two separate plans.   
 
What are an issuers obligations to provide an SBC with respect to benefits it 
does not insure? 
 
Unless it contracts otherwise, an issuer has no obligation to provide coverage information for benefits 
that it does not insure.  However, group health plan administrators are responsible for providing 
complete SBCs with respect to a plan.  A plan administrator that uses two or more insurance products 
provided by separate issuers with respect to a single group health plan may synthesize the 
information into a single SBC, or may contract with one of its issuers (or other service providers) to 
perform that function.   
 
Due to the administrative challenges of combining benefit package information from multiple issuers, 
during the first year of applicability, for enforcement purposes, with respect to a group health plan 
that uses two or more issuers, the Departments will consider the provision of multiple partial SBCs 
that, together, provide all the relevant information to meet the SBC content requirements.  In such 
circumstances, the plan administrator should take steps (such as a cover letter or a notation on the 
SBCs themselves) to indicate that the plan provides coverage using multiple different insurers and 
that individuals who would like assistance understanding how these products work together may 
contact the plan administrator for more information (and provide the contact information).7 
                                                 
4 In the Federal Register notice dated February 14, 2012, FAQs Part VIII, and in these FAQs, the term first year of 
applicability refers to SBCs and uniform glossaries provided with respect to coverage beginning before January 1, 2014.    
5 The SBC template makes clear that the coverage examples are not a cost estimator and should not be used to estimate a 
particular individuals actual expenses under the plan. 
6 See Q5 of FAQs Part VIII at http://www.dol.gov/ebsa/faqs/faq-aca8.html and 
http://cciio.cms.gov/resources/factsheets/aca_implementation_faqs8.html. 
7 See the sample completed SBC template, as well as Q3, Q4, and Q6 of FAQs Part VIII at 
http://www.dol.gov/ebsa/faqs/faq-aca8.html and 
 
   
Q11:  A previous FAQ provided a link where written translations for the SBC template 
and the uniform glossary would be available in the future.8  Are these translations 
available?    
 
Written translations in Spanish, Chinese, and Tagalog are now available. Navajo translations will be 
available shortly.  For more information, see CCIIO website at 
http://cciio.cms.gov/programs/consumer/summaryandglossary/index.html. 
  
Q12:  Are health insurance issuers required to provide SBCs for insurance products 
that are no longer being offered for purchase?  
 
The Departments understand that most plans and issuers have to develop new databases and 
technology systems in order to extract information about coverage terms and provide SBCs.  The 
Departments also understand that, with respect to insurance products that are no longer being 
offered for purchase (sometimes referred to as closed blocks of business), there is a significant 
volume of data that is not stored in electronic form or is not stored in an information system that that 
is compatible with the new electronic systems being developed for the SBC.  Accordingly, due to the 
additional administrative complexities with respect to providing SBCs with respect to closed blocks of 
business, the Departments will not take any enforcement action against a plan or issuer for failing to 
provide an SBC before September 23, 2013 with respect to an insured product that is no longer being 
actively marketed for business, provided the SBC is provided no later than September 23, 2013 (at 
which time, enrollees and small employers will have new opportunities to compare coverage options  
available through an Exchange).  
 
Q13:  Expatriate plans and policies face special circumstances and considerations in 
complying with the SBC requirements.  Can the Departments provide any 
assistance or relief with respect to expatriate coverage?  
 
Yes.  The Departments recognize that expatriate coverage carries additional administrative costs and 
barriers in filling out SBCs, including benefit and claims systems that are distinct from those for 
domestic coverage, which makes compliance more difficult.  Therefore, for purposes of enforcement, 
the Departments will not take any enforcement action against a group health plan or group health 
insurance issuer for failing to provide an SBC with respect to expatriate coverage during the first year 
of applicability.   
 
Q14:  Other than the FAQs, are there any updates to the SBC template and related 
documents on the Departments websites that I need to know about?  
 
Yes.  In the diabetes treatment scenario, the version originally posted contained a typographical 
error, listing the allowed amount for insulin as $11.92, rather than $119.20  a difference that 
impacts the total cost of care for diabetes in the coverage example calculations. 
 
To correct this error, the Departments have posted updated versions of the SBC template, the sample 
completed SBC, and the guide for coverage examples calculations  diabetes scenario.    The updated 
                                                                                                                                                                         
http://cciio.cms.gov/resources/factsheets/aca_implementation_faqs8.html for more information on circumstances when it 
may be helpful to note assumptions or other information in connection with the SBC coverage examples. 
8 See Q14 of FAQs Part VIII at http://www.dol.gov/ebsa/faqs/faq-aca8.html and 
http://cciio.cms.gov/resources/factsheets/aca_implementation_faqs8.html. 
 
  SBC template and sample completed SBC also include sample taglines for obtaining translated 
documents, to be included if appropriate consistent with paragraph (a)(5) of the regulations, as well 
as updated Sample Care Costs amounts for the diabetes coverage example, due to more accurate 
rounding in making these calculations.  Finally, the updated versions include some appearance 
modifications (such as changes in bolding, underlining, shading, capitalization, margin justification, 
use of hyphens, and row and column sizing) to ensure the document is accessible to individuals with 
disabilities, consistent with section 508 of the Rehabilitation Act.  Plans and issuers may use either 
version, or may make similar modifications to their own SBCs, without violating the appearance 
requirements for an SBC. 
 
The updated versions of these documents are labeled corrected on May 11, 2012 in the lower right 
corner of the first page and are available at http://www.dol.gov/ebsa/healthreform and 
http://cciio.cms.gov.  These three documents replace the prior versions issued contemporaneously 
with the final regulations in February 2012.