FAQQSS ABOUTT AFFOORDABLEE
     
CAREE ACTT IMPLEMMENTTATION
     
(PARRT VIIII) 
 
March 19, 20012 
 
 
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 hhave been 
prepared joointly by the  Departments of Labor,  Health and  Human Servvices (HHS),  and the Treeasury 
(the Departtments).  Like previouslyy issued FAQQs (available  at 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..  
 
SUMMARYY OF BENEFITS AND CCOVERAGEE (SBC) 
 
On Februaryy 14, 2012, tthe Departmments publisshed the finaal rules regaarding the SBBC.1  These FFAQs aim 
to answer some of the questions thhat have beeen raised to  date.  We inntend to releease additioonal FAQs.  
The Administration is ccommitted too promotingg operationaal efficienciees and clariffyying the finaal 
regulations  to ensure successful immplementatioon.  
 
Q1:    Wheen must pllans and isssuers beggin providing the SBCC?  
 
For group hhealth plan ccoverage, the regulationns provide thhat, for discllosures withh respect to  
participantss and beneficiaries who  enroll or re-enroll throuugh an openn enrollmentt period (inccluding 
late enrollees and re-ennrollees), thee SBC must bbe providedd beginning on the first day of the ffiirst open 
enrollment  period that  begins on oor after Septtember 23, 22012.  For diisclosures wwith respect to 
participantss and beneficiaries who  enroll in covverage otheer than throuugh an openn enrollmentt period 
(including inndividuals wwho are newwly eligible foor coverage  and special  enrollees), tthe SBC musst be 
provided beeginning on  the first dayy of the firstt plan year thhat begins oon or after SSeptember 223, 2012.   
 
For disclosuures from isssuers to group health pllans, and with respect tto individuall market covverage, 
the SBC muust be providded beginninng Septembeer 23, 2012.. 
 
Q2:  Whaat is the Deepartmentss basic appproach too implemenntation of tthe SBC 
requuirement dduring the first year oof applicabbility?  
 
The Departments basicc approach tto ACA impleementation,, as stated inn a previouss FAQ (see 
http://www.dol.gov/ebssa/faqs/faq-aaca.html), is:: [to work]  together wiith employers, issuers, SStates, 
providers annd other staakeholders tto help themm come into  compliance with the neew law and [[to work] 
with familiees and indiviiduals to hellp them undderstand the  new law annd benefit froom it, as inttended. 
Compliancee assistance is a high priiority for thee Departmennts. Our appproach to immplementatioon is and 
will continuue to be marrked by an eemphasis on  assisting (raather than immposing pennalties on) pplans, 
                                                 
1  See 26 CFRR 54.9815-27155, 29 CFR 25900.715-2715, annd 45 CFR 1477.200, publisheed February 14,, 2012 at 77 FRR 8668.   
 
  issuers and others that are working diligently and in good faith to understand and come into 
compliance with the new law. This approach includes, where appropriate, transition provisions, grace 
periods, safe harbors, and other policies to ensure that the new provisions take effect smoothly, 
minimizing any disruption to existing plans and practices. 
 
In addition to the general approach to implementation, in the instructions for completing the SBC, we 
stated: To the extent a plans terms do not reasonably correspond to these instructions, the template 
should be completed in a manner that is as consistent with the instructions as possible, while still 
accurately reflecting the plans terms.  This may occur, for example, if a plan provides a different 
structure for provider network tiers or drug tiers than is represented in the SBC template and these 
instructions, if a plan provides different benefits based on facility type (such as hospital inpatient 
versus non-hospital inpatient), in a case where a plan is denoting the effects of a related health 
flexible spending arrangement or a health reimbursement arrangement, or if a plan provides different 
cost sharing based on participation in a wellness program.  
 
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 provide the required 
SBC content in an appearance that is consistent with the final regulations.  The Departments intend 
to work with stakeholders over time to achieve maximum uniformity for consumers and certainty for 
the regulated community. 
 
Q3:  Are plans and issuers required to provide a separate SBC for each coverage tier 
(e.g., self-only coverage, employee-plus-one coverage, family coverage) within a 
benefit package? 
  
No, plans and issuers may combine information for different coverage tiers in one SBC, provided the 
appearance is understandable.  In such circumstances, the coverage examples should be completed 
using the cost sharing (e.g., deductible and out-of-pocket limits) for the self-only coverage tier (also 
sometimes referred to as the individual coverage tier).  In addition, the coverage examples should 
note this assumption.   
 
Q4:  If the participant is able to select the levels of deductible, copayments, and co-
insurance for a particular benefit package, are plans and issuers required to 
provide a separate SBC for every possible combination that a participant may 
select under that benefit package? 
 
No, as with the response to Q-3, plans and issuers may combine information for different cost-sharing 
selections (such as levels of deductibles, copayments, and co-insurance) in one SBC, provided the 
appearance is understandable. This information can be presented in the form of options, such as 
deductible options and out-of-pocket maximum options.  In these circumstances, the coverage 
examples should note the assumptions used in creating them.  An example of how to note 
assumptions used in creating coverage examples is provided in the Departments sample completed 
SBC.2    
 
                                                 
2 The Departments sample completed SBC is available at: www.dol.gov/ebsa/pdf/SBCSampleCompleted.pdf or 
http://cciio.cms.gov/resources/files/Files2/02102012/sample-completed-sbcfinal.pdf.pdf. 
 
  Q5:  If a group health plan is insured and utilizes carve-out arrangements (such as 
pharmacy benefit managers and managed behavioral health organizations) to 
help manage certain benefits, who is responsible for providing the SBC with 
respect to the plan?   
 
The Departments recognize that different combinations of plans, issuers, and their service providers 
may have different information necessary to provide an SBC, including the coverage examples.   
 
The Departments have determined that, until further guidance is issued, where a group health plan or 
group health insurance issuer has entered into a binding contractual arrangement under which 
another party has assumed responsibility (1) to complete the SBC, (2) to provide required information 
to complete a portion of the SBC,  or (3) to deliver an SBC with respect to certain individuals in 
accordance with the final regulations, the plan or issuer generally will not be subject to any 
enforcement action by the Departments for failing to provide a timely or complete SBC, provided the 
following conditions are satisfied: 
 
  The plan or issuer monitors performance under the contract, 
  If a plan or issuer has knowledge of a violation of the final regulations and the plan or issuer 
has the information to correct it, it is corrected as soon as practicable, and 
  If a plan or issuer has knowledge of a violation of the final regulations and the plan or issuer 
does not have the information to correct it, the plan or issuer communicates with participants 
and beneficiaries regarding the lapse and begins taking significant steps as soon as practicable 
to avoid future violations. 
 
Q6:  If a plan offers participants add-ons to major medical coverage that could affect 
their cost sharing and other information in the SBC (such as a health flexible 
spending arrangement (health FSA), health reimbursement arrangement (HRA), 
health savings account (HSA), or wellness program), is the plan permitted to 
combine information for all of these add-ons and reflect them in a single SBC?  
 
Yes.  As stated in the preamble to the final regulations and the instructions for completing the SBC 
template,3 plans and issuers are permitted to combine such information in one SBC, provided the 
appearance is understandable.  That is, the effects of such add-ons can be denoted in the appropriate 
spaces on the SBC for deductibles, copayments, coinsurance, and benefits otherwise not covered by 
the major medical coverage.  In such circumstances, the coverage examples should note the 
assumptions used in creating them.  (The Departments sample completed SBC4 provides an example 
of how to denote the effects of a diabetes wellness program.)  
 
Q7:  The final regulations require the SBC to be provided in certain circumstances 
within 7 business days.   Does that mean the plan or issuer has 7 business days 
to send the SBC, or that the SBC must be received within 7 business days?   
 
In the context of the final regulations, the term provided means sent.  Accordingly, the SBC is timely 
if sent out within 7 business days, even if it is not received until after that period. 
                                                 
3 See 77 FR 8668, 8670-71 (February 14, 2012) and page 1 of Instruction Guide for Group Coverage at 
http://www.dol.gov/ebsa/pdf/SBCInstructionsGroup.pdf. 
4 See www.dol.gov/ebsa/pdf/SBCSampleCompleted.pdf or http://cciio.cms.gov/resources/files/Files2/02102012/sample-
completed-sbcfinal.pdf.pdf. 
 
   
Q8:  Are plans and issuers required to provide SBCs to individuals who are COBRA 
qualified beneficiaries? 
 
Yes.  While a qualifying event does not, itself, trigger an SBC, during an open enrollment period, any 
COBRA qualified beneficiary who is receiving COBRA coverage must be given the same rights to elect 
different coverage as are provided to similarly situated non-COBRA beneficiaries.  See 26 CFR 
54.4980B-5, Q&A-4(c) (requirement to provide election) and 54.4980B-3, Q&A-3 (definition of similarly 
situated non-COBRA beneficiary). In this situation, a COBRA qualified beneficiary who has elected 
coverage has the same rights to receive an SBC as a similarly situated non-COBRA beneficiary.  There 
are also limited situations in which a COBRA qualified beneficiary may need to be offered different 
coverage at the time of the qualifying event than the coverage he or she was receiving before the 
qualifying event and this may trigger the right to an SBC.  See 26 CFR 54.4980B-5, Q&A-4(b). 
 
Q9:  What circumstances will trigger the requirement to provide an SBC to a 
participant or beneficiary in a group health plan?  In particular, how do the terms 
application and renewal apply to a self-insured plan?   
 
The final regulations require that the SBC be provided in several instances: 
 
  Upon application.  If a plan (including a self-insured group health plan) or an issuer 
distributes written application materials for enrollment, the SBC must be provided as part 
of those materials.  For this purpose, written application materials include any forms or 
requests for information, in paper form or through a website or email, that must be 
completed for enrollment.  If the plan or issuer does not distribute written application 
materials for enrollment (in either paper or electronic form), the SBC must be provided no 
later than the first date on which the participant is eligible to enroll in coverage. 
 
  By first day of coverage (if there are any changes).  If there is any change in the information 
required to be in the SBC that was provided upon application and before the first day of 
coverage, the plan or issuer must update and provide a current SBC no later than the first 
day of coverage. 
 
  Special enrollees.  The SBC must be provided to special enrollees no later than the date on 
which a summary plan description is required to be provided (90 days from enrollment). 
 
  Upon renewal.  If a plan or issuer requires participants and beneficiaries to actively elect to 
maintain coverage during an open season, or provides them with the opportunity to 
change coverage options in an open season, the plan or issuer must provide the SBC at the 
same time it distributes open season materials.  If there is no requirement to renew 
(sometimes referred to as an evergreen election), and no opportunity to change coverage 
options, renewal is considered to be automatic and the SBC must be provided no later 
than 30 days prior to the first day of the new plan or policy year.5 
                                                 
5 The final regulations provide an accommodation for insured coverage if the policy, certificate, or contract of insurance has 
not been renewed or reissued prior to the date that is 30 days prior to the first day of the new plan or policy year.  In such 
 
   
  Upon request.  The SBC must be provided upon request for an SBC or summary 
information about the health coverage as soon as practicable but in no event later than 
seven business days following receipt of the request. 
 
Q10:  What are the circumstances in which an SBC may be provided electronically?   
 
With respect to group health plan coverage, an SBC may be provided electronically: (1) by an issuer to 
a plan, and (2) by a plan or issuer to participants and beneficiaries who are eligible but not enrolled for 
coverage, if: 
 
  The format is readily accessible (such as in an html, MS Word, or pdf format);  
  The SBC is provided in paper form free of charge upon request; and  
  If the SBC is provided via an Internet posting (including on the HHS web portal), the issuer 
timely advises the plan (or the plan or issuer timely advises the participants and beneficiaries) 
that the SBC is available on the Internet and provides the Internet address.  Plans and issuers 
may make this disclosure (sometimes referred to as the e-card or postcard requirement) by 
email. 
 
An SBC may also be provided electronically by a plan or issuer to a participant or beneficiary who is 
covered under a plan in accordance with the Department of Labors disclosure regulations at 29 CFR 
2520.104b-1.  Those regulations include a safe harbor for disclosure through electronic media to 
participants who have the ability to effectively access documents furnished in electronic form at any 
location where the participant is reasonably expected to perform duties as an employee and with 
respect to whom access to the employers or plan sponsors electronic information system is an 
integral part of those duties.  Under the safe harbor, other individuals may also opt into electronic 
delivery. 
 
With respect to individual market coverage, a health insurance issuer must provide the SBC, in either 
paper or electronic form, in a manner that can reasonably be expected to provide actual notice. The 
SBC may not be provided in electronic form unless: 
 
  The format is readily accessible; 
  If the SBC is provided via an Internet posting, it is placed in a location that is prominent and 
readily accessible;  
  The SBC is provided in an electronic form which can be retained and printed; and  
  The issuer notifies the individual that the SBC is available free of charge in paper form upon 
request. 
 
In addition, a health insurance issuer offering individual market coverage, that provides 
HealthCare.gov with all the content required to be provided in the SBC, will be deemed compliant 
with the requirement to provide an SBC upon request prior to application.  However, issuers must 
                                                                                                                                                                         
cases, the SBC must be provided as soon as practicable but in no event later than seven business days after issuance of the 
new policy, certificate, or contract of insurance, or the receipt of written confirmation of intent to renew, whichever is earlier. 
 
  provide the SBC in paper form upon request for a paper copy, and at all other times as specified in 
the regulations.  
 
In addition, as stated in the regulations, unless the plan or issuer has knowledge of a separate address 
for a beneficiary, the SBC may be provided to the participant on behalf of the beneficiary (including by 
furnishing the SBC to the participant in electronic form). 
 
Q11:  Are issuers who have provided individual market plan information to 
HealthCare.gov in compliance with PHS Act section 2715 and its implementing 
regulations already? 
 
The deemed compliance provision in the regulation requires issuers in the individual market to 
provide all of the data elements that are needed to complete the SBC template to HealthCare.gov.  If 
the issuer fails to provide all of the data elements, it would not be deemed to be in compliance with 
the regulation.  Today, HealthCare.gov does not collect all of the elements of an SBC, such as 
information necessary to complete the coverage examples.  However, HHS will collect this 
information and display it in the format of the SBC template by September 23, 2012, so that providing 
information to HealthCare.gov fulfills the deemed compliance provision.   
 
Q12:  Can the Departments provide model language to meet the requirement to provide 
an e-card or postcard in connection with evergreen website postings? 
 
Yes.  Plans and issuers have flexibility with respect to the postcard and may choose to tailor it in many 
ways.  One example is:  
 
 
  AVAILABILITY OF SUMMARY HEALTH INFORMATION 
 
 
As an employee, the health benefits available to you represent a 
 
significant component of your compensation package. They also 
 
provide important protection for you and your family in the case 
 
  of illness or injury.   
   
  Your plan offers a series of health coverage options.  Choosing a 
  health coverage option is an important decision.  To help you 
  make an informed choice, your plan makes available a Summary 
  of Benefits and Coverage (SBC), which summarizes important 
  information about any health coverage option in a standard 
  format, to help you compare across options.   
   
  The SBC is available on the web at:  www.website.com/SBC.  A 
  paper copy is also available, free of charge, by calling 1-XXX-
  XXX-XXXX (a toll-free number).   
 
 
 
  Q13:  The regulations state that in order to satisfy the requirement to provide the SBC 
in a culturally and linguistically appropriate manner, a plan or issuer follows the 
rules in the claims and appeals regulations under PHS Act section 2719.  Does 
this mean that the SBC must include a sentence on the availability of language 
assistance services? 
 
Yes, if the notice is sent to an address in a county in which ten percent or more of the population is 
literate only in a non-English language.  The final SBC regulations provide that a plan or issuer is 
considered to provide the SBC in a culturally and linguistically appropriate manner if the thresholds 
and standards of the claims and appeals regulations are met.6  The claims and appeals regulations 
outline three requirements that must be satisfied for notices sent to an address in a county in which 
ten percent or more of the population is literate only in a non-English language.  In such cases, the 
plan or issuer is generally required to provide oral language services in the non-English language, 
provide notices upon request in the non-English language, and include in all English versions of the 
notices a statement in the non-English language clearly indicating how to access the language services 
provided by the plan or issuer.   
 
Accordingly, plans and issuers must include, in the English versions of SBCs sent to an address in a 
county in which ten percent or more of the population is literate only in a non-English language, a 
statement prominently displayed in the applicable non-English language clearly indicating how to 
access the language services provided by the plan or issuer.  In this circumstance, the plan or issuer 
should include this statement on the page of the SBC with the Your Rights to Continue Coverage 
and Your Grievance and Appeals Rights sections. 
 
Sample language for this statement is available on the model notice of adverse benefit determination 
at http://www.dol.gov/ebsa/IABDModelNotice2.doc.  Current county-by-county data can be accessed 
at http://www.cciio.cms.gov/resources/factsheets/clas-data.html.   
 
Even in counties where no non-English language meets the ten percent threshold, a plan or issuer can 
voluntarily include such a statement in the SBC in any non-English language.  Moreover, nothing in 
the SBC regulations limits an individuals rights to meaningful access protections under other 
applicable Federal or State law, including Title VI of the Civil Rights Act of 1964.   
 
Q14:  Where can plans and issuers find the written translations of the SBC template 
and the uniform glossary in the non-English languages? 
 
Written translations in Spanish, Chinese, Tagalog and Navajo will be available at 
http://cciio.cms.gov/programs/consumer/summaryandglossary/index.html.   
 
Q15:  Is an SBC permitted to simply substitute a cross-reference to the summary plan 
description (SPD) or other documents for a content element of the SBC?   
 
No, an SBC is not permitted to substitute a reference to the SPD or other document for any content 
element of the SBC.  However, an SBC may include a reference to the SPD in the SBC footer.   (For 
example, Questions: Call 1-800-[insert] or visit us at www.[insert].com for more information, 
including a copy of your plans summary plan description.)  In addition, wherever an SBC provides 
information that fully satisfies a particular content element of the SBC, it may add to that information 
                                                 
6 See 26 CFR 54.9815-2719T(e), 29 CFR 2590.715-2719(e), and 45 CFR 147.136(e), originally published on July 23, 2010, 
at 75 FR 43330 and amended on June 24, 2011, at 76 FR 37208. 
 
  a reference to specified pages or portions of the SPD in order to supplement or elaborate on that 
information. 
 
Q16:  Can a plan or issuer add premium information to the SBC form voluntarily? 
 
Yes.  If a plan or issuer chooses to add premium information to the SBC, the information should be 
added at the end of the SBC form. 
 
Q17:  Must the header and footer be repeated on every page of the SBC? 
 
No.  If a plan or issuer chooses, it may include the header only on the first page of the SBC.  In 
addition, a plan or issuer may include the footer only on the first and last page of the SBC, instead of 
on every page.   
 
The OMB control numbers (which were displayed on the SBC template and the Departments sample 
completed SBC to inform plans and issuers that the Departments had complied with the Paperwork 
Reduction Act) should not be displayed on SBCs provided by plans or issuers. 
 
Q18:  For group health plan coverage, may the coverage period in the SBC header 
reflect the coverage period for the group plan as a whole, or must the coverage 
period be the period applicable to each particular individual enrolled in the plan? 
 
The SBC may reflect the coverage period for the group health plan as a whole.  Therefore, if a plan is 
a calendar year plan and an individual enrolls on January 19, the coverage period is permitted to be 
the calendar year.  Plans and issuers are not required to individualize the coverage period for each 
individuals enrollment. 
 
Q19:  Can issuers and plans make minor adjustments to the SBC format, such as 
changing row and column sizes?  What about changes such as rolling over 
information from one page to another, which was not permitted by the 
instructions? 
 
Minor adjustments are permitted to the row or column size in order to accommodate the plans 
information, as long as the information is understandable. The deletion of columns or rows is not 
permitted. 
 
Rolling over information from one page to another is permitted. 
 
Q20:  Can plan names be generic, such as Standard Option or High Option? 
 
Yes, generic terms may be used. 
 
Q21:  Can the issuers name and the plan name be interchangeable in order?   
 
Yes. 
 
Q22:  Can barcodes or control numbers be added to the SBC for quality control 
purposes? 
 
Yes, they can be added. 
 
   
Q23:  Is the SBC required to include a statement about whether the plan is a 
grandfathered health plan?   
 
No, although plans may voluntarily choose to add a statement to the end of the SBC about whether 
the plan is a grandfathered health plan.  
 
Q24:  My plan is moving forward to implement the SBC template for the first year of 
applicability.  Are significant changes anticipated for 2014?   
 
No.  The Departments identified in the preamble to the final regulations certain discrete changes that 
would be necessary for plan years (or, in the individual market, policy years) beginning after the first 
year of applicability.  These changes include the addition of a minimum value statement and a 
minimum essential coverage statement, changes to be consistent with the Affordable Care Acts 
requirement to eliminate all annual limits on essential health benefits, and the Departments intent to 
add additional coverage examples.  The Departments are also considering making some refinements 
consistent with these FAQs and other requests from plans and issuers for clarification and to promote 
operational efficiencies.  No other changes are planned at this time.