What an SBC Is
The Summary of Benefits and Coverage (SBC) is a short, standardized summary of a health plan’s benefits and costs, created under the ACA. Because every SBC uses the same federal format, people can compare plans side by side, whether the coverage comes from an employer or the individual market.
An SBC shows, among other things:
- Key benefits, cost sharing (deductibles, copays and coinsurance) and limitations
- Coverage examples showing how the plan would pay for common situations, such as having a baby
- Whether the plan provides Minimum Essential Coverage and Minimum Value
Which Plans Need One
All group health plans, fully insured and self-funded, and grandfathered plans. Excepted benefits, such as stand-alone dental and vision, aren’t required to have one.
Who Prepares It
- Fully insured plans: The insurance carrier generally prepares the SBC, and the carrier and employer share responsibility for providing it.
- Self-funded plans: The plan administrator, usually the employer, is responsible, typically with help from its TPA.
When It’s Provided
SBCs are provided at key points, including:
- When someone applies for or first becomes eligible for coverage
- At open enrollment or renewal
- At special enrollment
- On request
If a plan makes a mid-year change that would affect the SBC, a 60-day advance notice generally applies.
SBCs can be provided on paper or electronically, if the applicable electronic disclosure rules are met.
The Uniform Glossary
Every SBC links to the Uniform Glossary, a federal list of common health coverage and medical terms explained in plain language. It must also be provided free of charge on request.
SBC vs. SPD
An SBC is a short summary for comparing plans. It’s different from an ERISA Summary Plan Description (SPD), which is a full description of how the plan works and participants’ rights. Plans covered by ERISA generally need both.
Resources
- Federal SBC templates, instructions and the Uniform Glossary: U.S. Department of Labor
- Carrier SBCs: Word & Brown SBC Resource Page
Important: This information is provided for general educational purposes. It is not legal or tax advice. How these rules apply depends on each employer’s specific circumstances, so employers should review their situation with their own legal counsel, ERISA attorney, CPA or tax advisor.