Healthcare Law Requires New Employer Disclosures
On February 6, 2012, the Department of Health and Human Services extended the effective date of yet another mandate of the Patient Protection and Affordable Care Act. Effective September 23, 2012 (rather than March 23, 2012, as previously announced), employers will be required to provide employees and new hires with certain disclosures about the healthcare benefit plans offered by the employer. Employers will be required to provide a “Summary of Benefits and Coverage” (“SBC”) to employees summarizing and explaining the benefits and coverage provided by the company’s group healthcare plan (a sort of mini summary plan description). Employers also will have to supply a glossary of commonly used health plan terms. These notices will have to be provided to employees who enroll in the employer’s healthcare on or after September 23, 2012 and annually during each open enrollment period thereafter. The format and content of the SBC also must conform to several specific requirements. For example, the SBC cannot be more than four pages long and the print not less than 12-point font. It must be written in a “culturally and linguistically appropriate manner” and use language that is easily understandable by the average plan participant. The content of the SBC must include a summary description of the coverage that is available under the plan, using uniform definitions of standard terms. It must include explanations of the cost sharing features (e.g., deductibles, coinsurance, and co-payments) and provide examples of “common benefits scenarios” (e.g., pregnancy, serious and catastrophic medical conditions, etc.). The Department of Labor has online resources for plan sponsors to comply with the new SBC requirements that can be found at Model SBC and a Glossary of Health Coverage and Medical Terms.
Article courtesy of Worklaw Network firm Shawe Rosenthal.
