8706 Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Rules and Regulations 

1The Affordable Care Act also adds section 

715(a)(1) to the Employee Retirement Income 

Security Act (ERISA) and section 9815(a)(1) to the 

Internal Revenue Code (the Code) to incorporate the 

provisions of part A of title XXVII of the PHS Act 

into ERISA and the Code, and make them 

applicable to group health plans, and health 

insurance issuers providing health insurance 

coverage in connection with group health plans. 

2A summary of the NAIC’s work can be found at 

76 FR 52476–77, August 22, 2011. 

3 76 FR 52442, August 22, 2011. 

4 76 FR 52475, August 22, 2011. 

separate offense for purposes of this 

paragraph (e). HHS will enforce these 

provisions in a manner consistent with 

45 CFR 150.101 through 150.465. 

(f) Applicability date—(1) This section 

is applicable to group health plans and 

group health insurance issuers in 

accordance with this paragraph (f). (See 

§ 147.140(d), providing that this section 

applies to grandfathered health plans.) 

(i) For disclosures with respect to 

participants and beneficiaries who 

enroll or re-enroll through an open 

enrollment period (including reenrollees and late enrollees), this 

section applies beginning on the first 

day of the first open enrollment period 

that begins on or after September 23, 

2012; and 

(ii) For disclosures with respect to 

participants and beneficiaries who 

enroll in coverage other than through an 

open enrollment period (including 

individuals who are newly eligible for 

coverage and special enrollees), this 

section applies beginning on the first 

day of the first plan year that begins on 

or after September 23, 2012. 

(2) For disclosures with respect to 

plans, and to individuals and 

dependents in the individual market, 

this section is applicable to health 

insurance issuers beginning September 

23, 2012. 

[FR Doc. 2012–3228 Filed 2–9–12; 11:15 am] 

BILLING CODE P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 54 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Part 2590 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

[CMS–9982–FN] 

45 CFR Part 147 

Summary of Benefits and Coverage 

and Uniform Glossary—Templates, 

Instructions, and Related Materials; 

and Guidance for Compliance 

AGENCIES: Internal Revenue Service, 

Department of the Treasury; Employee 

Benefits Security Administration, 

Department of Labor; Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services. 

ACTION: Guidance for compliance and 

notice of availability of templates, 

instructions, and related materials. 

SUMMARY: The Departments of Health 

and Human Services, Labor, and the 

Treasury are simultaneously publishing 

in the Federal Register this guidance 

document and final regulations under 

the Patient Protection and Affordable 

Care Act to implement the disclosure for 

group health plans and health insurance 

issuers of the summary of benefits and 

coverage (SBC), notice of modifications, 

and the uniform glossary. This guidance 

document provides guidance for 

compliance with section 2715 of the 

Public Health Service Act and the 

Departments’ final regulations, 

including a template for the SBC, 

instructions, sample language, a guide 

for coverage example calculations, and 

the uniform glossary. 

FOR FURTHER INFORMATION CONTACT: 

Amy Turner or Heather Raeburn, 

Employee Benefits Security 

Administration, Department of Labor, at 

(202) 693–8335; Karen Levin, Internal 

Revenue Service, Department of the 

Treasury, at (202) 622–6080; Jennifer 

Libster or Padma Shah, Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, at (301) 492–4222. 

Customer Service Information: 

Individuals interested in obtaining 

information from the Department of 

Labor concerning employment-based 

health coverage laws may call the EBSA 

Toll-Free Hotline at 1–866–444–EBSA 

(3272) or visit the Department of Labor’s 

Web site (http://www.dol.gov/ebsa). In 

addition, information from HHS on 

private health insurance for consumers 

can be found on the Centers for 

Medicare & Medicaid Services (CMS) 

Web site (http://www.cms.hhs.gov/ 

HealthInsReformforConsume/ 

01_Overview.asp) and information on 

health reform can be found at http:// 

www.healthcare.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

The Departments of Health and 

Human Services (HHS), Labor, and the 

Treasury (the Departments) are taking a 

phased approach to issuing regulations 

and guidance implementing the revised 

Public Health Service Act (PHS Act) 

sections 2701 through 2719A and 

related provisions of the Patient 

Protection and Affordable Care Act 

(Affordable Care Act).1 Section 2715 of 

the PHS Act directs the Departments to 

develop standards for use by a group 

health plan and a health insurance 

issuer in compiling and providing a 

summary of benefits and coverage (SBC) 

that ‘‘accurately describes the benefits 

and coverage under the applicable plan 

or coverage.’’ Section 2715 of the PHS 

Act also directs the Departments to 

provide for the development of 

‘‘standards for the definitions of terms 

used in health insurance coverage.’’ The 

statute directs the Departments, in 

developing such standards, to ‘‘consult 

with the National Association of 

Insurance Commissioners’’ (referred to 

in this guidance document as the 

‘‘NAIC’’), ‘‘a working group composed 

of representatives of health insurancerelated consumer advocacy 

organizations, health insurance issuers, 

health care professionals, patient 

advocates including those representing 

individuals with limited English 

proficiency, and other qualified 

individuals.’’ 

After consultation with the NAIC,2 on 

August 22, 2011, the Departments 

published proposed regulations to 

implement PHS Act section 2715,3 as 

well as a companion document that 

proposed an SBC template (with 

instructions, sample language, and a 

guide for coverage examples 

calculations to be used in completing 

the SBC template) and a uniform 

glossary.4 HHS also published on its 

Web site (at http://cciio.cms.gov, and 

accessible via hyperlink from 

www.dol.gov/ebsa/healthreform) the 

coding and pricing information 

necessary to perform calculations for the 

three proposed coverage examples. 

Comments were solicited on these 

materials. 

Final regulations under PHS Act 

section 2715 are being published 

elsewhere in this issue of the Federal 

Register (final regulations). This 

guidance document provides guidance 

for compliance with PHS Act section 

2715 and the final regulations, 

including information on how to obtain 

the SBC template (with instructions and 

sample language for completing the 

template) and the uniform glossary. 

These items are displayed at 

www.dol.gov/ebsa/healthreform and 

www.cciio.cms.gov. 

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Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Rules and Regulations 8707 

5This guidance makes references to various 

paragraphs of the final regulations. The final 

regulations are codified at 26 CFR 54.9815–2715, 29 

CFR 2590.715–2715, and 45 CFR 147.200. However, 

for simplicity, this guidance refers only to the 

relevant paragraph of the three regulations instead 

of using three parallel, full citations. 

6See Subpart I of Part A of Title XXVII of the PHS 

Act. 

7Examples suggested by comments included 

prostate cancer, colorectal cancer, hypertension, 

heart attack, stroke, major depression, and chronic 

kidney disease, among others. 

8A summary of the focus group testing done by 

America’s Health Insurance Plans is available at: 

http://www.naic.org/documents/

committees_b_consumer_information_101012_ahip

_focus_group_summary.pdf, a summary of the focus 

group testing done by Consumers Union on the 

coverage examples is available at: http://

prescriptionforchange.org/wordpress/wp-content/ 

uploads/2011/08/A_New_Way_of_Comparing_

Health_Insurance.pdf. 

II. Guidance 

A. Documents Authorized for the First 

Year of Applicability 

This guidance document authorizes 

an SBC template (with instructions, 

samples, and a guide for coverage 

example calculations to be used in 

completing the SBC template), and the 

uniform glossary, to comply with the 

disclosure requirements of PHS Act 

section 2715, pursuant to paragraph 

(a)(3) of the final regulations.5 These 

documents are authorized with respect 

to group health plan coverage and group 

and individual health insurance 

coverage for SBCs and uniform 

glossaries provided with respect to 

coverage beginning before January 1, 

2014 (referred to in this guidance 

document as ‘‘the first year of 

applicability’’). 

The materials described in this 

guidance document are authorized by 

the Departments for the first year of 

applicability only; the Departments 

intend to issue updated materials for 

later years. Specifically, these 

documents do not provide language to 

comply with paragraph (a)(2)(i)(G) of the 

final regulations, requiring a statement 

in the SBC about whether a plan or 

coverage provides minimum essential 

coverage and whether the plan’s or 

coverage’s share of the total allowed 

costs of benefits provided under the 

plan or coverage meets applicable 

minimum value requirements, because 

the final regulations do not require this 

material to be included in the first year 

of applicability. In addition, the 

Departments recognize that, beginning 

January 1, 2014, new market reforms 6

will take effect, which are expected to 

prompt additional changes to the SBC 

(for example, annual limits will no 

longer be permissible). 

Finally, the documents described in 

this guidance document contain 

information for two coverage 

examples—having a baby (normal 

delivery) and managing type 2 diabetes 

(routine maintenance of a wellcontrolled condition). This approach 

differs from the documents published in 

connection with the proposed 

regulations, which included three 

coverage examples (relating to having a 

baby (normal delivery), breast cancer, 

and diabetes). The Departments 

received many comments asserting that 

the necessary calculations for the 

coverage examples would be costly and 

complicated. Commenters asked the 

Departments to add flexibility in use of 

the coverage examples and expressed 

concerns about misleading consumers 

about the costs of the health care 

services associated with the coverage 

examples. The Departments also 

received a number of comments that 

expressed concern about the high 

variability in treatment plans for 

patients with breast cancer and diabetes. 

Therefore, the Departments have 

modified the coverage examples 

requirements and will continue to 

evaluate these coverage examples, as 

well as others suggested by 

commenters.7 Consumer testing 

performed on behalf of the NAIC8

demonstrated that the coverage 

examples facilitated individuals’ 

understanding of the benefits and 

limitations of a plan or policy and 

helped them make more informed 

choices about their options. Such testing 

also showed that individuals were able 

to comprehend that the examples were 

only illustrative. Additionally, while 

some plans provide useful coverage 

calculators to their enrollees to help 

them make health care decisions, they 

are not uniform across all plans and 

most are not available to shoppers, 

making it difficult for consumers to 

make coverage comparisons. Future 

guidance will add coverage examples 

and make other changes (including 

those described above) for SBCs 

required to be provided after the first 

year of applicability. 

In addition to the materials described 

in this guidance document, HHS is 

providing (at http://cciio.cms.gov, also 

accessible via hyperlink from 

www.dol.gov/ebsa/healthreform) the 

specific information necessary to 

simulate benefits covered under the 

plan or policy for the coverage example 

portion of the SBC (including relevant 

medical items and services, dates of 

service, billing codes, and allowed 

charges), pursuant to paragraph (a)(2)(ii) 

of the final regulations. This 

information must be used for SBCs 

provided during the first year of 

applicability. Future guidance will 

make changes to this information for 

SBCs required to be provided after the 

first year of applicability. 

B. Appearance 

The Departments’ 2011 proposed 

regulations would have required that a 

group health plan and a health 

insurance issuer provide an SBC as a 

stand-alone document. This 

requirement was eliminated with 

respect to group health plan coverage in 

the final regulations (as discussed more 

fully in the preamble to the final 

regulations). Instead, the final 

regulations provide for the Secretaries to 

issue guidance for the form of the SBC. 

Consistent with the authority set forth 

in paragraph (a)(3) of the final 

regulations, with respect to group health 

plan coverage, the Departments 

authorize the SBC to be provided either 

as a stand-alone document or in 

combination with other summary 

materials (for example, a summary plan 

description), if the SBC information is 

intact and prominently displayed at the 

beginning of the materials (such as 

immediately after the Table of Contents 

in a summary plan description). For 

health insurance coverage provided in 

the individual market, the SBC must be 

provided as a stand-alone document. 

The Departments will review and 

monitor SBCs provided as part of other 

plan materials and may modify their 

guidance as to appearance for SBCs 

required to be provided after the first 

year of applicability in response to plan 

and issuer practices. 

The NAIC stated in its December 2010 

transmittal letter that the NAIC working 

group intentionally designed the layout 

and color of the SBC template. The 

Departments noted in the document 

published contemporaneously with the 

proposed regulations, however, that 

color printing may be costly and 

proposed that a plan or issuer would be 

compliant with the requirement to 

provide the SBC if it used either the 

color version as recommended by the 

NAIC or the grayscale version. The 

Departments are retaining that approach 

in this guidance document, and will 

allow the SBC to be provided either in 

color or grayscale. 

C. Special Rule 

For group health plans and health 

insurance issuers in the group and 

individual markets, use of the full SBC 

template authorized by this guidance 

document is required, including for the 

first year of applicability. To the extent 

a plan’s terms that are required to be 

described in the SBC template cannot 

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8708 Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Rules and Regulations 

9See 75 FR 43330 (July 23, 2010), as amended by 

76 FR 37208 (June 24, 2011). 

10The Departments publish guidance on their 

Web site with a list of the counties that meet this 

threshold. This information is available at 

www.dol.gov/ebsa/healthreform and http:// 

cciio.cms.gov/. 11 76 FR 52475 (August 22, 2011). 

reasonably be described in a manner 

consistent with the template and 

instructions, the plan or issuer must 

accurately describe the relevant plan 

terms while using its best efforts to do 

so in a manner that is still consistent 

with the instructions and template 

format as reasonably possible. Such 

situations may occur, for example, if a 

plan provides a different structure for 

provider network tiers or drug tiers than 

is contemplated by the template and 

these instructions, if a plan provides 

different benefits based on facility type 

(such as hospital inpatient versus nonhospital 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. The Departments intend to 

update the template instructions for 

SBCs required to be provided after the 

first year of applicability. Whether the 

need for a special rule becomes moot in 

light of additional instructions, or 

whether the need continues to exist, 

will be addressed in future guidance. 

D. Language 

PHS Act section 2715 requires group 

health plans and health insurance 

issuers to provide the SBC in a 

culturally and linguistically appropriate 

manner. Paragraph (a)(5) of the final 

regulations provides that a plan or 

issuer satisfies this requirement by 

following the rules for providing claims 

and appeals notices in a culturally and 

linguistically appropriate manner under 

PHS Act section 2719, and paragraph (e) 

of its implementing regulations, as 

applied to the SBC.9 Under those rules, 

plans and issuers must provide notices 

in a culturally and linguistically 

appropriate manner when 10 percent or 

more of the population residing in the 

claimant’s county are literate only in the 

same non-English language, as 

determined based on American 

Community Survey data published by 

the United States Census Bureau. At the 

time of publication of this guidance 

document, 255 U.S. counties (78 of 

which are in Puerto Rico) meet this 

threshold. The overwhelming majority 

of these are Spanish; however, Chinese, 

Tagalog, and Navajo are present in a few 

counties, affecting five states 

(specifically, Alaska, Arizona, 

California, New Mexico, and Utah).10

To help plans and issuers meet the 

language requirements of paragraph 

(a)(5) of the final regulations, as 

requested by commenters, HHS will 

provide (at http://cciio.cms.gov, also 

accessible via hyperlink from 

www.dol.gov/ebsa/healthreform) written 

translations of the SBC template, sample 

language, and uniform glossary in 

Spanish, Tagalog, Chinese, and Navajo. 

HHS may also make these materials 

available in other languages to facilitate 

voluntary distribution of SBCs to other 

individuals with limited English 

proficiency. 

III. Templates, Instructions, and 

Related Materials 

As stated above, this guidance 

document authorizes documents to 

comply with the disclosure 

requirements of PHS Act section 2715, 

pursuant to paragraph (a)(3) of the final 

regulations. The Departments received 

comments in response to the previous 

guidance and proposed templates, 

instructions, and related materials.11

These comments addressed specific 

issues related to the SBC template, 

instructions, samples, and the uniform 

glossary. After consideration of these 

comments, the Departments are 

announcing the availability of the 

following documents, available at 

http://cciio.cms.gov and www.dol.gov/ 

ebsa/healthreform: 

1. SBC template. The document is 

available in modifiable format (MS 

Word), as suggested by commenters for 

ease of use. 

2. Sample completed SBC. This 

document was completed using 

information for sample health coverage 

and provides a general illustration of a 

completed SBC. 

3. Instructions. For assistance in 

completing the SBC template, separate 

instructions are available for group 

health coverage and for individual 

health insurance coverage. 

4. Why This Matters language. The 

SBC instructions include language that 

must be used when completing the 

‘‘Why This Matters’’ column on the first 

page of the SBC template. Two language 

options are provided depending on 

whether the answer in the applicable 

row is ‘‘yes’’ or ‘‘no’’, according to the 

terms of the plan or coverage. 

5. Coverage examples. This guidance 

document, together with information 

provided in Microsoft Excel format by 

HHS at http://cciio.cms.gov and 

accessible via hyperlink from 

www.dol.gov/ebsa/healthreform), 

provides all the information necessary 

to perform the coverage example 

calculations. 

6. Uniform glossary. The uniform 

glossary of health coverage and medical 

terms may not be modified by plans or 

issuers. 

In revising the proposed template, 

instructions, and other materials, the 

Departments made several changes that 

were suggested in comments. Some of 

these changes were made at the request 

of self-insured plans, which commented 

that terminology in the SBC template 

was appropriate only for insured 

coverage. For example, terms such as 

‘‘policy’’ and ‘‘insurer’’ have been 

changed to ‘‘coverage’’ and ‘‘plan’’, 

respectively. In addition, because rights 

to continue coverage vary based on 

many factors (including plan size, 

whether the plan is insured or selfinsured, and State law), the description 

of rights to continue coverage has been 

modified to reference Federal and State 

protections more generally and include 

contact information for questions. 

Additionally, the data element in the 

proposed template labeled as ‘‘Policy 

Period’’ has been revised to be labeled 

as ‘‘Coverage Period.’’ The instructions 

for this data element have also been 

updated, to allow for situations in 

which there is no known end date to the 

coverage period when the SBC is 

prepared, and for situations in which an 

updated SBC is being provided to satisfy 

the requirements of paragraph (b) of the 

final regulations, relating to notice of a 

modification. The Departments also 

revised the disclaimer language at the 

beginning of the uniform glossary, to 

make clear that the glossary is intended 

to be educational in nature and that the 

definitions contained in the glossary 

may not be the same as the definitions 

used by a particular plan or issuer. 

Certain changes were also made to the 

SBC template and instructions for 

completing the template to conform to 

changes made in the final regulations. 

The final regulations eliminated 

premiums from the required content for 

the SBC document. Therefore, the row 

for communicating premium 

information has been removed from the 

SBC template document and the 

instructions for completing this section 

have also been removed. Additionally, 

language was added to the instructions 

to address expatriate plans and policies. 

Specifically, the new instruction allows 

an expatriate plan or policy to include 

a reference on the SBC template in the 

‘‘Other Covered Services’’ box regarding 

where to find information about 

coverage provided outside of the United 

States. 

Additional flexibility was also added 

to the instructions for completing the 

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Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Rules and Regulations 8709 

SBC template. The instructions specify 

that, to the extent a plan’s terms that are 

required to be described in the SBC 

template cannot reasonably be described 

in a manner consistent with the 

template and instructions, the plan or 

issuer must accurately describe the 

relevant plan terms while using its best 

efforts to do so in a manner that is still 

as consistent with the instructions and 

template format as reasonably possible. 

The Departments also reduced the 

number of coverage examples required 

for SBCs issued during the first year of 

applicability to two examples, having a 

baby (normal delivery) and managing 

type 2 diabetes (routine maintenance of 

a well-controlled condition). The breast 

cancer example has been removed from 

the template and HHS will be providing 

treatment and reimbursement 

information only to complete the 

coverage examples relating to having a 

baby and managing diabetes. 

Additionally, the Departments modified 

some of the language to clarify that the 

coverage examples are not intended to 

demonstrate costs for an actual, specific 

person (for example the ‘‘You Pay’’ 

language was changed to ‘‘Patient 

Pays’’). 

Modifications were also made to the 

benefits scenarios. First, the underlying 

benefits scenarios were modified to 

more accurately reflect current accepted 

standards of care. For example, the 

proposed maternity scenario included 

two ultrasounds during the early stages 

of pregnancy, which is not necessary for 

a routine pregnancy, so the final 

scenario includes one ultrasound at 20 

weeks. In addition, the final maternity 

scenario no longer includes some 

services that are clinically appropriate, 

but not clinically required, such as 

circumcision. In the proposed diabetes 

scenario, the metformin dosage was 

1000 mg twice daily, which may not be 

appropriate for well-controlled type 2 

diabetes. The final scenario now states 

that metformin dosage is 500 mg twice 

daily. In addition, the proposed diabetes 

scenario included two podiatrist office 

visits, which has been reduced to one 

annual visit, which is clinically 

appropriate for well-controlled type 2 

diabetes. The pricing data in both 

scenarios (allowed amounts) has been 

refined to more closely reflect 

reimbursement rates in the private 

health insurance markets. The benefits 

scenario has also been updated to reflect 

correct coding practices, and HHS is 

now providing both ICD–9 and ICD–10 

codes for the maternity scenario, in 

anticipation of the October 1, 2013 

transition to ICD–10. 

IV. Paperwork Reduction Act 

According to the Paperwork 

Reduction Act of 1995 (Pub. L. 104–13) 

(PRA), no persons are required to 

respond to a collection of information 

unless such collection displays a valid 

OMB control number. The Departments 

note that a Federal agency cannot 

conduct or sponsor a collection of 

information unless it is approved by 

OMB under the PRA, and displays a 

currently valid OMB control number, 

and the public is not required to 

respond to a collection of information 

unless it displays a currently valid OMB 

control number. See 44 U.S.C. 3507. 

Also, notwithstanding any other 

provisions of law, no person shall be 

subject to penalty for failing to comply 

with a collection of information if the 

collection of information does not 

display a currently valid OMB control 

number. See 44 U.S.C. 3512. 

This document relates to the 

information collection request (ICR) 

contained in final regulations titled 

‘‘Summary of Benefits and Coverage and 

the Uniform Glossary,’’ which is 

published elsewhere in this issue of the 

Federal Register. For a discussion of the 

hour and cost burden associated with 

the ICR, please see those final 

regulations. 

Steven T. Miller, 

Deputy Commissioner for Services and 

Enforcement, Internal Revenue Service. 

Signed this 7th day of February 2012. 

Phyllis C. Borzi, 

Assistant Secretary, Employee Benefits 

Security Administration, Department of 

Labor. 

Dated: February 6, 2012. 

Marilyn Tavenner, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

Dated: February 6, 2012. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2012–3230 Filed 2–9–12; 11:15 am] 

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