Employer Responsibility with Health Care ReformPosted: February 28, 2013
It’s been quite awhile since I’ve written a blog on Health Care Reform, or really anything related to employee benefits. I’ve had a lot going on in my life in the past year. My mom passed away in January of this year (check out my blog, but grab a tissue) and I finally have the opportunity to breathe a little after that responsibility ended. So I thought I would catch up on a few important issues.
One of the most important things that employers need to be aware of (right now) is the distribution of Summary of Benefits and Coverage or SBC’s. Here is a PDF from the Department of Labor for SBC Frequently asked questions on distribution requirements of the document.
Here’s the skinny on this issue. The SBC is a standardized document (designed by the DOL) that all insurance carriers must use to explain coverage for medical plans. The carriers are required to provide the SBC to the employer and the employer must distribute to employees.
Timing for the distribution by the employer is important. The SBC must be distributed to employees at the beginning of the employer’s open enrollment period or 30 days prior to the plan renewal. For example, if your plan renews May 1st, the SBC’s have to be distributed to your employees by April 1st. So now, you can’t wait until the last day before renewal to change plans. Decisions have to be made for your renewal earlier than in the past to comply with this requirement. And don’t think no one is watching either, because the PPACA police may get you! All kidding aside, if you are caught out of compliance, there are penalties.
You may have noticed starting in 2012 that insurance carriers (for medical plans) were sending their renewals out earlier than they had in the past. That was a precursor to the SBC requirement. As a broker, I will be contacting clients earlier to discuss renewals, but don’t wait for me if you have questions or want to get started on your renewal earlier. The challenge for me is the ancillary lines like dental plans, life plans and vision plans. They are not required to have this information in any particular format or by any particular time frame like the medical carriers. But if you are in any way like me, I want to address renewal items at the same time, not when the ancillary carriers get around to sending out their renewals. My job is to bug the ancillary line insurance carriers to get their renewals in sinq with the medical plan carries.
I actually like the new format of the SBC’s because it’s so much easier to compare benefits from plan to plan and carrier to carrier. And keep in mind the spirit of the law (at least this part) is to give your employees to opportunity have information in advance and make decisions that will work for them. After all, without employees, where would a business be?