The U.S. Treasury Department, Department of Labor, and Department of Health and Human Services issued final regulations under the Patient Protection and Affordable Care Act on February 9. They require administrators of group health plans (usually the employer) and insurers of group health plans to provide participants and beneficiaries with a Summary of Benefits and Coverage (SBC). An SBC must accurately describe the benefits and coverage of the plans/policy applicable to the participant or beneficiary in no more than four double-sided pages. The SBC requirement in itself does not supplant ERISA’s existing requirement to furnish a summary plan description (SPD). However, if certain requirements are met, the SBC may be furnished as part of an SPD.
The final rules require compliance starting on September 23, 2012, and specifically target the 2012 open enrollment season. Employers that fail to satisfy this requirement are subject to penalties of $1,000 per failure, per participant. Excise taxes of $100 per day for each participant apply, and employers that provide inaccurate disclosures may be subject to fiduciary breach claims under ERISA.