Summary of Benefits and Coverage.

Health care reform expands ERISA's disclosure requirements by requiring that group health plans provide a summary of benefits and coverage (“SBC”) to plan participants and beneficiaries before enrollment or re-enrollment. The primary purpose of the SBC is to enable participants to compare coverage options easily and to help them better understand their health benefits.  The SBC must accurately describe the benefits and coverage available to the participant or beneficiary under the applicable plan. This SBC requirement applies in addition to the SPD and SMM requirements already in place.

On March 19, 2012, the Internal Revenue Service, Department of Labor, and Health and Human Services  jointly issued a set of Frequently Asked Questions (“FAQs”) regarding the final regulations that were issued on February 14, 2012, regarding the SBC.  The requirements are generally effective with open enrollment periods that begin on or after September 23, 2012.  While the agencies did not delay the effective date, the FAQs make it clear that they are focusing on helping plans become compliant, rather than imposing penalties.  Specifically, Q/A-2 provides that no penalties will apply during the first year of applicability to those working diligently and in good faith to provide the required SBC content in an appearance consistent with the final regulations.

While the FAQs provide helpful guidance with respect to the SBC requirements, the basic requirements, including the effective date, are largely unchanged from the final regulations.  For a sample SBC, go to the DOL website.   Remember, the plan sponsor is responsible for ensuring distribution of the SBCs at open enrollment, automatic enrollment, special enrollment (e.g., birth of a baby, COBRA event), and upon request. 

Fall is here.  Kids are back at school.  Leaves are turning red and orange.  College football is underway.  However, for the HR professional, the arrival of Fall means the start of open enrollment for benefit plans.  Below is money- and time-saving regulatory guidance to consider before, during, and after your open enrollment period for your employee benefit plans. 

Prepare

            To prepare for the open enrollment period, sit down and develop a plan.  The plan should include the dates for the enrollment period, what resources are at your disposal and how to allocate them.  Work with your service providers to see what types of resources they have to assist you.  Develop a checklist that contains all of the tasks relating to open enrollment and the due dates for such tasks.  Take into consideration how long it will take to train any staff members that may have to answer benefits-related questions from employees.

Communicate Effectively 

            Communication is always an important part of HR’s job and is even more important during open enrollment.  Consider having open enrollment meetings to communicate all the healthcare reform changes to employees.  Try to notify employees of open enrollment meetings 3-4 weeks prior to the date of the meetings.  Schedule the meetings so that the you have time to submit enrollment changes to insurance providers and verify that employees are appropriately enrolled in their chosen benefits.  You may want to have benefit providers present for individual employee meetings.  In addition, provide enrollment kits to employees that provide comprehensive information about the benefits and their portion of the cost. Be sure to provide employees with an adequate time frame that they can review all of the materials and consult with family members in order to make decisions regarding their benefits.

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