2026 Newfront SBC for Employers Guide
Summary of Benefits and Coverage (SBC):
The Content and Distribution Rules for Employers
2026 Edition
Audio
Presented by: Brian Gilmore | Lead Benefits Counsel, VP
Guide Topics
The ACA Created an Additional Required
Plan Summary Document for Employees
The SBC’s Role Among Other Required Disclosures
• The ACA generally requires group health plans and
health insurance issuers to provide SBCs to employees
• Designed as a short document describing the benefits
and coverage offered under the plan in a uniform format
• Unlike the SPD, the SBC will look the same from plan
option to plan option, employer to employer, and even
when comparing vs. individual plans on the Exchange
• The SBC’s brevity (cannot exceed four double-sided
pages) and coverage examples for common situations
also make the document quite useful for employees
• In short, the SBC has proven to fill an appropriate role in
the employee-facing plan summary landscape by
providing a relatively simple overview that allows for
apples-to-apples comparison among multiple offerings
SBC for Employers Topics for Discussion:
Required Content: The SBC is subject to strict content,
appearance, and formatting limitations to ensure uniformity
When, What, How, Who?: Because carriers and TPAs
generally provide completed SBCs to the employer, these are
the primary issues employers face in satisfying the SBC rules
Mid-Year Changes: Material modifications come with a 60-day
advance notice requirement—a major shift from the SMM rules
Languages: SBCs must be provided in a “culturally and
linguistically appropriate manner,” with new DOL guidance
updating the language requirements going forward
Enforcement: The seemingly eternal good faith enforcement
standard keeps chugging along, but for how much longer?
Which Plans are Subject to the SBC Rules?
General Rule:
Group Health Plans Must Provide SBC Unless Exception Applies
SBCs were a new requirement in the ACA first effective as of
2012. The SBC rules are applicable to:
● Group & Individual Policies
● Small Group & Large Group Plan
● Self-Insured & Fully Insured Plans
● Grandfathered & Non-Grandfathered Plans
● ERISA & Non-ERISA Plans
The SBC rules generally apply to all major medical plans.
Stated Purpose of the SBC:
The ACA generally requires all group health plans and health
insurance carriers to provide an easy-to-read summary to help
consumers compare the different features of health plans with an
apples-to-apples comparison of costs, coverage, benefits, and
other features that may be important to participants. The SBC
must be in a short, uniform document that accurately describes
the benefits and coverage under the plan.
Exception: Dental/Vision Plans Not Subject to SBCs
● Excepted Dental Benefits (almost all dental plans qualify)
● Limited to treatment of the mouth, and under a separate
policy or not integral to the group health plan
● Excepted Vision Benefits (almost all vision plans qualify)
● Limited to treatment of the eye, and under a separate
policy or not integral to the group health plan
Exception: Health FSAs Not Subject to SBCs
● Excepted Health FSAs (almost all health FSAs qualify)
● Footprint Rule: All employees eligible for health FSA are also
eligible for the major medical plan
● $500 Rule: Employer nonelective contributions to the health
FSA do not exceed $500 (more permitted if matching)
Other Plans Subject to SBCs?
● HSAs are not subject to the SBC rule because not a plan
● HRAs have no technical exception but limited guidance as to
how to address—SBC format does not work well for an HRA
● Wellness programs that affect medical may be included in SBC
Content Requirements
Required SBC Content
Subject to Strict Appearance and Formatting Limitations, SBC Must Have:
Defined Terms
● Uniform definitions of standard insurance and medical
terms (defined in the Uniform Glossary)
Coverage Description
● Description of the coverage (in at least 12-point font)
● Exceptions, reductions, and limitations of the coverage
● Cost-sharing amounts (deductible, copays, coinsurance)
● Continuation of coverage provisions (COBRA)
● Coverage examples (model has three, six permitted)
ACA Standards
● Statement as to whether the plan constitutes minimum
essential coverage (i.e., satisfies individual mandate)
● Statement as to whether the plan provides minimum
value (i.e., is at least as rich as a Bronze-level plan)
Summary Only
● Statement that the SBC is only a summary of the
governing plan document
Contact/Access Information
● Contact information for questions
● An internet address for obtaining the certificate of
coverage (if applicable)
● An internet address for obtaining a list of network
providers (if applicable)
● An internet address for obtaining a list of formulary
prescription drugs (if applicable)
● An internet address for obtaining the Uniform Glossary of
Coverage and Medical Terms
● DOL EBSA Summary of Benefits and Coverage and
Uniform Glossary
Uniform Glossary https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/summary-of-benefits
How to Meet the SBC Content Requirements
Practical Reality
● Employers should almost
ne ver be in a position
where they have to prepare
the SBCs themselves
Fully Insured Plan:
• Insurance carrier almost
always prepares the SBC
Self-Insured Plan:
• Usually prepared by the
third-party administrator
(TPA)—make sure TPA has
agreed to perform this
service on plan’s behalf
Start at the DOL EBSA SBC Main Page
Use the SBC Template for Plan Years Beginning On or After 1/1/21
• Available in Word and PDF formats, cannot exceed four double-sided pages
Follow the Document “Instructions for Completing the SBC—Group Health
Plan Coverage”
Plan Coverage” Self-Insured Plan:
• Note: This document has very specific instructions to follow
Use the “HHS Coverage Example Calculator and Related Information” to
Prepare Coverage Examples
• Safe harbor approach until further guidance issued
Use Terms in a Manner Consistent with the Uniform Glossary Definitions
• For example, “coinsurance” must refer to employee-share percentage of costs
SBCs Through the Years…
The SBC Content Continues to Evolve
The template SBCs have gone through two major sets of revisions since their introduction in 2012.
Initial Revisions
2017 Update
● Trimmed template from eight pages (four double-sided) to five pages
(2 ½ double-sided)
● Added third coverage example for broken bone (simple fracture)
treated with an emergency room visit
● Clearer description of whether plan constitutes “minimum essential
coverage (i.e., satisfies individual mandate) and provided “minimum
value” (i.e., at least as rich as Bronze-level plan)
● Removal of annual limits section (ACA prohibits lifetime and annual
dollar limits on essential health benefits)
● Removal of Q&A page (including references to pre-existing conditions,
which are not longer permitted by the ACA)
● Updated Uniform Glossary of Health Coverage and Medical Terms
with new definitions (from four pages to six pages)
Current Revisions
2021 Update
● Updates the “minimum essential coverage” disclosure to remove
reference to tax penalty and instead focus on eligibility for premium
tax credit (TJCA reduced ACA individual mandate tax penalty to zero)
● Removes definition of “individual responsibility requirement” from the
Uniform Glossary to reflect TCJA
● Additional option for individual market policies to address “minimum
value” disclosure (because concept not relevant for individual
policies)
● Updates the coverage example calculator, guides, and narratives
with improved treatment protocols and better logic to align with
underlying assumptions for most plans’ cost-sharing structure
● New for 2025: Updated foreign language standards (slides 21-24)
The Sample
Completed
SBC Template
SBC Page Limit Fun Fact #1:
● ACA requires that the SBC “not
exceed four pages in length”
Where to Access:
Summary of Benefits and
Coverage and Uniform
Glossary
https://www.cms.gov/marketplace/resources/forms-reports-other
| Important Questions | Answers | Why This Matters: |
|---|---|---|
| What is the overall deductible? | $500/individual or $1,000/family | Generally, you must pay all of the costs from providers up to the deductible amount before this plan begins to pay. If you have other family members on the plan, each family member must meet their own individual deductible until the total amount of deductible expenses paid by all family members meets the overall family deductible. |
| Are there services covered before you meet your deductible? | Yes. Preventive care and primary care services are covered before you meet your deductible. | This plan covers some items and services even if you haven't yet met the deductible amount. But a copayment or coinsurance may apply. For example, this plan covers certain preventive services without cost sharing and before you meet your deductible. See a list of covered preventive services at https://www.healthcare.gov/coverage/preventive-care-benefits/. |
| Are there other deductibles for specific services? | Yes. $300 for prescription drug coverage and $300 for occupational therapy services. There are no other specific deductibles. | You must pay all of the costs for these services up to the specific deductible amount before this plan begins to pay for these services. |
| What is the out-of-pocket limit for this plan? | For network providers $2,500 individual/$5,000 family; for out-of-network providers $4,000 individual/$8,000 family | The out-of-pocket limit is the most you could pay in a year for covered services. If you have other family members in this plan, they have to meet their own out-of-pocket limits until the overall family out-of-pocket limit has been met. |
| What is not included in the out-of-pocket limit? | Copayments for certain services, premiums, balance-billing charges, and health care this plan doesn't cover. | Even though you pay these expenses, they don't count toward the out-of-pocket limit. |
| Will you pay less if you use a network provider? | Yes. See www.[insert].com or call 1-800[-insert] for a list of network providers. | This plan uses a provider network. You will pay less if you use a provider in the plan's network. You will pay the most if you use an out-of-network provider, and you might receive a bill from a provider for the difference between the provider's charge and what your plan pays (balance billing). Be aware, your network provider might use an out-of-network provider for some services (such as lab work). Check with your provider before you get services. |
The Sample
Completed
SBC Template
SBC Page Limit Fun Fact #2:
● 2012 SBC regulations interpret
ACA to provide “that the four-page limitation is four double-sided pages”
Where to Access:
| Important Questions | Answers | Why This Matters: |
|---|---|---|
| Do you need a referral to see a specialist? | Yes. | This plan will pay some or all of the costs to see a specialist for covered services but only if you have a referral before you see the specialist. |
| Common Medical Event | Services You May Need | What You Will Pay | Limitations, Exceptions, & Other Important Information | |
|---|---|---|---|---|
| Common Medical Event | Services You May Need | Network Provider(You will pay the least) | Out-of-Network Provider(You will pay the most) | Limitations, Exceptions, & Other Important Information |
| If you visit a health care provider's office or clinic | Primary care visit to treat an injury or illness | $35 copay/office visit and 20% coinsurance for other outpatient services; deductible does not apply | 40% coinsurance | None |
| If you visit a health care provider's office or clinic | Specialist visit | $50 copay/visit | 40% coinsurance | Preauthorization is required. If you don't get preauthorization, benefits could be reduced by 50% of the total cost of the service. |
| If you visit a health care provider's office or clinic | Preventive care/screening/immunization | No charge | 40% coinsurance | You may have to pay for services that aren't preventive. Ask your provider if the services needed are preventive. Then check what your plan will pay for. |
| If you have a test | Diagnostic test(x-ray,blood work) | $10 copay/test | 40% coinsurance | None |
| If you have a test | Imaging(CT/PET scans,MRIs) | $50 copay/test | 40% coinsurance | None |
| If you need drugs to treat your illness or conditionMore information about prescription drug coverageis available atwww.[insert].com | Generic drugs(Tier 1) | $10 copay/prescription(retail&mail order) | 40% coinsurance | Covers up to a 30-day supply(retail subscription);31-90 day supply(mail order prescription). |
| If you need drugs to treat your illness or conditionMore information about prescription drug coverageis available atwww.[insert].com | Preferred brand drugs(Tier 2) | $30 copay/prescription(retail&mail order) | 40% coinsurance | Covers up to a 30-day supply(retail subscription);31-90 day supply(mail order prescription). |
| If you need drugs to treat your illness or conditionMore information about prescription drug coverageis available atwww.[insert].com | Non-preferred brand drugs(Tier 3) | 40% coinsurance | 60% coinsurance | Covers up to a 30-day supply(retail subscription);31-90 day supply(mail order prescription). |
| If you need drugs to treat your illness or conditionMore information about prescription drug coverageis available atwww.[insert].com | Specialty drugs(Tier 4) | 50% coinsurance | 70% coinsurance | Covers up to a 30-day supply(retail subscription);31-90 day supply(mail order prescription). |
| If you have outpatient surgery | Facility fee(e.g.,ambulatory surgery center) | $100/day copay | 40% coinsurance | Preauthorization is required. If you don't get preauthorization, benefits could be reduced by50% of the total cost of the service. |
| If you have outpatient surgery | Physician/surgeon fees | 20% coinsurance | 40% coinsurance | 50% coinsurance for anesthesia. |
The Sample
Completed
SBC Template
SBC Page Limit Fun Fact #3:
● 2015 SBC regulations “retain the
interpretation set forth in the 2012
final regulations that the SBC can
be four double-sided pages”
Where to Access:
| Common Medical Event | Services You May Need | What You Will Pay | Limitations, Exceptions, & Other Important Information | |
|---|---|---|---|---|
| Common Medical Event | Services You May Need | Network Provider (You will pay the least) | Out-of-Network Provider (You will pay the most) | Limitations, Exceptions, & Other Important Information |
| If you need immediate medical attention | Emergency room care | 20% coinsurance | 20% coinsurance | None |
| If you need immediate medical attention | Emergency medical transportation | 20% coinsurance | 20% coinsurance | None |
| If you need immediate medical attention | Urgent care | $30 copay/visit | 40% coinsurance | None |
| If you have a hospital stay | Facility fee (e.g., hospital room) | 20% coinsurance | 40% coinsurance | Preauthorization is required. If you don't get preauthorization, benefits could be reduced by 50% of the total cost of the service. |
| If you have a hospital stay | Physician/surgeon fees | 20% coinsurance | 40% coinsurance | 50% coinsurance for anesthesia. |
| If you need mental health, behavioral health, or substance abuse services | Outpatient services | $35 copay/office visit and 20% coinsurance for other outpatient services | 40% coinsurance | None |
| If you need mental health, behavioral health, or substance abuse services | Inpatient services | 20% coinsurance | 40% coinsurance | None |
| If you are pregnant | Office visits | 20% coinsurance | 40% coinsurance | Cost sharing does not apply for preventive services. Depending on the type of services, a coinsurance may apply. Maternity care may include tests and services described elsewhere in the SBC (i.e., ultrasound). |
| If you are pregnant | Childbirth/delivery professional services | 20% coinsurance | 40% coinsurance | Cost sharing does not apply for preventive services. Depending on the type of services, a coinsurance may apply. Maternity care may include tests and services described elsewhere in the SBC (i.e., ultrasound). |
| If you are pregnant | Childbirth/delivery facility services | 20% coinsurance | 40% coinsurance | Cost sharing does not apply for preventive services. Depending on the type of services, a coinsurance may apply. Maternity care may include tests and services described elsewhere in the SBC (i.e., ultrasound). |
| If you need help recovering or have other special health needs | Home health care | 20% coinsurance | 40% coinsurance | 60 visits/year |
| If you need help recovering or have other special health needs | Rehabilitation services | 20% coinsurance | 40% coinsurance | 60 visits/year. Includes physical therapy, speech therapy, and occupational therapy. |
| If you need help recovering or have other special health needs | Habilitation services | 20% coinsurance | 40% coinsurance | 60 visits/calendar year |
| If you need help recovering or have other special health needs | Skilled nursing care | 20% coinsurance | 40% coinsurance | Excludes vehicle modifications, home modifications, exercise, and bathroom equipment. |
| If you need help recovering or have other special health needs | Durable medical equipment | 20% coinsurance | 40% coinsurance | Preauthorization is required. If you don't get preauthorization, benefits could be reduced by 50% of the total cost of the service. |
| If you need help recovering or have other special health needs | Hospice services | 20% coinsurance | 40% coinsurance | Preauthorization is required. If you don't get preauthorization, benefits could be reduced by 50% of the total cost of the service. |
| If your child needs dental or eye care | Children's eye exam | $35 copay/visit | Not covered | Preauthorization is required. If you don't get preauthorization, benefits could be reduced by 50% of the total cost of the service. |
| If your child needs dental or eye care | Children's glasses | 20% coinsurance | Not covered | Preauthorization is required. If you don't get preauthorization, benefits could be reduced by 50% of the total cost of the service. |
| If your child needs dental or eye care | Children's dental check-up | No charge | Not covered | None |
The Sample
Completed
SBC Template
SBC Page Limit Fun Fact #4:
● The current SBC template for use
starting in 2021 was trimmed from
eight pages (four double-sided) to
five pages (2 ½ double-sided)
Where to Access:
The Sample
Completed
SBC Template
SBC Page Limit Fun Fact #5:
● SBCs are almost always provided
electronically, where there’s no
such thing as double-sided
pages—but the Departments still
view them as double-sided!
Where to Access:
Summary of Benefits and Coverage and Uniform Glossary
https://www.cms.gov/marketplace/resources/forms-reports-other
| Cost Sharing | |
|---|---|
| Deductibles | $500 |
| Copayments | $200 |
| Coinsurance | $1,800 |
| What isn't covered | |
| Limits or exclusions | $60 |
| The total Peg would pay is | $2,560 |
| The plan's overall deductible | $500 |
|---|---|
| Specialist copayment | $50 |
| Hospital (facility) coinsurance | 20% |
| Other coinsurance | 20% |
| Cost Sharing | |
|---|---|
| Deductibles* | $800 |
| Copayments | $900 |
| Coinsurance | $100 |
| What isn't covered | |
| Limits or exclusions | $20 |
| The total Joe would pay is | $1,820 |
| Mia's Simple Fracture |
|---|
| (in-network emergency room visit and follow up care) |
| The plan's overall deductible | $500 | | --- | | Specialist copayment | $50 | | Hospital (facility) coinsurance | 20% | | Other coinsurance | 20% |
| Total Example Cost | $2,800 |
|---|
| Cost Sharing | |
|---|---|
| Deductibles* | $500 |
| Copayments | $200 |
| Coinsurance | $400 |
| What isn't covered | |
| Limits or exclusions | $0 |
| The total Mia would pay is | $1,100 |
02
When, What, How, Who?
When to Provide the SBC?
| Event | Timeframe |
|---|---|
| Upon Application | |
| Initial Enrollment(New Hires) | |
| Newly Eligible Employees | Provide as Part of Any Written Application Materials Distributed for Enrollment |
| If no written applications materials for enrollment, provide no later than the first date the participant is eligible | |
| If SBC information changes during period between application and first day of coverage, provide updated SBC no later than the first day of coverage | |
| No requirement to provide the SBC if employer has already provided it upon request and there has been no change since previously provided | |
| Special Enrollment | |
| Loss of Other Coverage | |
| Birth Adoption, Marriage | |
| Medicaid/CHIP Events | Provide Within 90 Days from Enrollment Upon Employee Experiencing HIPAA Special Enrollment Event |
| Same 90-day timeframe required as for SPD distribution when employees are first covered under the plan | |
| Open Enrollment | Provide No Later Than the Date Employer Distributes Written Open Enrollment Materials |
| If the plan has rolling elections(i.e., passive enrollment), deadline to provide is instead no later than 30 days prior to the first day of the new plan year | |
| For fully insured plans where the policy is not finalized before the 30-day period, exception provides that employers must provide no later than seven business days after policy issuance or receipt of written confirmation (does not apply for self-insured plans) | |
| Upon Request | Provide as Soon as Practicable, Not to Exceed Seven Business Days Following Receipt of the Request |
What SBCs to Provide?
| Event | What to Provide |
|---|---|
| Upon Application | |
| Initial Enrollment(New Hires) | |
| Newly Eligible Employees | Provide the SBC for Each Benefit Package(Plan Option)for Which the Employee is Eligible |
| SBCs for all the options offered under the plan in which the employee could choose to enroll | |
| Special Enrollment | |
| Loss of Other Coverage | |
| Birth, Adoption, Marriage | |
| Medicaid/CHIP Events | Provide the SBC for Each Benefit Package(Plan Option)for Which the Employee is Eligible |
| SBCs for all the options offered under the plan in which the employee could choose to enroll | |
| Open Enrollment | Currently Enrolled Employees |
| Only Required to Provide the SBC for the Benefit Package In Which Employee is Currently Enrolled | |
| SBCs for other benefit packages must be available upon request(as soon as practicable, within seven days) | |
| Not Currently Enrolled Employees | |
| Provide the SBC for Each Benefit Package(Plan Option)for Which the Employee is Eligible | |
| SBCs for all the options offered under the plan in which the employee could choose to enroll | |
| Upon Request | Provide the SBC for Each Benefit Package(Plan Option)for Which the Employee is Eligible |
SBC Electronic Disclosure Rules
The SBCs add additional electronic disclosure safe harbors.
Employees still always have the right to request a paper copy free of charge.
Special Relaxed SBC Rule: Online Enrollment
● SBCs may be distributed electronically in connection
with online enrollment to any employee
Employees with Work-Related Computer Access
● Applies for employees enrolling online (initial enrollment
or open enrollment) where SBCs are made available as
part of the employees’ online enrollment process
Special Relaxed SBC Rule: Online Request
● SBCs may be distributed electronically in response to an
online employee request for the SBC
Employees without Work-Related Computer Access
Special Relaxed SBC Rule: Eligible But Not Enrolled
SBC may be distributed electronically if:
- The format is readily accessible; and
- If provided on the internet, employer must notify the
employee in paper form (e.g., a postcard) or by email that
the documents are available on the internet, including the
internet address, plus include a notice that the documents
are available in paper form upon request
Other Situations: Standard ERISA Safe Harbor
Employees with Work-Related Computer Access
Integral to Their Job Duties
● No employee consent required—these employees can
receive electronic distribution of ERISA materials (e.g., SPD,
SMM) by default (i.e., opt-out)
Employees without Work-Related Computer Access
Integral to Their Job Duties
● Employee must electronically affirmatively consent
to electronic disclosure (i.e., opt-in)
● Form of affirmative consent must reasonably
demonstrate the individual's ability to access information
in the electronic form that will be used (e.g., the internet)
Who Must Receive SBCs?
Unlike the standard ERISA SPD/SMM rules, both employees and dependents have
the right to receive SBCs—but a major carve out applies.
Standard ERISA Rule
Applies to SPD and SMM Distribution
• Only required to provide to
employees (not dependents)
for health and welfare plans
• Includes COBRA participants
• No requirement to provide to
dependents (spouse, domestic
partner, children, etc.) even if
also covered under the plan
Special SBC Rule
Employees and Dependents Included
• Employers must provide the
SBC to both employees and
dependents (spouse, domestic
partner, children, etc.)
• Includes COBRA participants
• Different from the SPD/SMM
rules where the DOL rules
specifically exclude dependents
from required distribution
Major Carve Out
Employee and Dependent
Live at Same Address
• No requirement to separately
provide SBCs to dependents if
the dependent’s last known
address is the same as the
employee
• If a dependent’s last known
address is different from the
employee’s, employer must
provide separate SBC to the
dependent at the dependent’s
last known address
Who Must Provide SBCs to Employees?
For fully insured plans, both the group health plan (generally the employer as plan administrator) and the insurance carrier
are responsible and directly liable for providing the SBCs—no such rule applies directly to the TPA for self-insured plans.
Who is Responsible for Providing SBCs
Fully Insured vs. Self-Insured
Fully Insured Plans
● Both the plan (employer) and the insurance carrier are
legally responsible for providing SBCs
● Anti-Duplication Exception: No requirement for
employer to provide SBC if insurance carrier has
already provided (employer may still be liable for
failures if conditions in righthand column not satisfied)
Self-Insured Plans
● No insurance carrier, so only the plan (employer) is
directly responsible (not TPA)
● Contractual Delegation: Can contract with TPA to
handle SBC obligations (see righthand column)
Contractual Shifting of Liability
Applies for Both Insurance Carrier or TPA
The employer is considered to have satisfied its requirement to
provide the SBC if it contracts with the TPA/carrier to provide the
SBCs and meets the following three conditions:
1. Monitoring Performance: The employer monitors
performance under the contract;
2. Correcting Failures: If the employer has knowledge that the
TPA/carrier is not properly providing the SBCs, and the employer
has all information necessary to correct the failure, the
employer must correct the failures as soon as practicable
3. Addressing Uncorrectable Failures: If the employer has
knowledge that the TPA/carrier is not properly providing the
SBCs, and the employer does not have all of the information
necessary to correct the failure, the employer must communicate
with the affected participants regarding the failures, and begin
taking steps as soon as possible to avoid future violations
03
Mid-Year Changes
Mid-Year SBC Material Modifications
Applies only to a modification “that occurs other than in connection with renewal or
reissuance of coverage” (i.e., does not apply for new plan year changes).
SMM Material differently from the rules to which
• Mid-year SBC changes are treated
differently from the rules to which
employers have become
accustomed for SMMs
• 60-DAY ADVANCE NOTICE
REQUIREMENT FOR SBCs
• Applies to any mid-year material
modification that affects the
content of the SBC—even
enhancements!
• Requires distribution of an
updated SBC reflecting the
material modifications or a
separate notice describing only
the material modifications
SBC Material
Modifications
60-Days Advance Notice
• Updated SBC must be provided 60
days prior to the date on which the
modification will become effective
• Separate notice just describing
modifications is also permitted
• Applies to any material modification
affecting SBC content
“Material” Modification Defined
• Any modification that would be
considered by an average
participant to be an important
change in covered benefits or other
terms of coverage under the plan
SMM Material
Modifications
60+ Days After Adoption
General Rule: 210 Days
• SMM must be provided within 210
days after the close of the plan
year in which the modification was
adopted
Material Reduction in Health
Benefits: 60 Days
• SMM must be provided within 60
days after** the date of adoption of
material reduction of covered
services or benefits for a group
health plan (best practice still to
provide in advance if possible)
04
Required Languages
Required SBC Language Translations
SBCs Must be Provided In a “Culturally and Linguistically Appropriate Manner”
The SBC Language Requirements
● Employers must satisfy the following standards for the SBC:
● Oral language services (e.g., phone customer service hotline) that includes answering questions in the non-English language
● Upon request, the plan must provide the SBC translated in the non-English language
● Must include a prominently displayed statement in SBC in the non-English language of how to access these language services
● SBC template includes access taglines in non-English languages on page four of the SBC (“Language Access Services”)
When the SBC Language Services Requirement Applies
● SBC language services required (including translations upon request) where provided to an employee/dependent in county
where at least 10% of the the population residing in the county is literate only in the same non-English language
● Departments use survey and census information to periodically update which counties qualify
● Most recent Culturally and Linguistically Appropriate Services County Data (CLAS County Data) is from 2023
New 2023 CLAS County Data Applies Going Forward
• Applies to SBCs for Plan Years beginning on or after January 1, 2025
Where to Access 2023 CLAS County Data: https://www.dol.gov/sites/dolgov/files/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/clas-county-data-2023.pdf
Where to Access SBC Translations: https://www.cms.gov/marketplace/resources/forms-reports-other
Required SBC Language Translations
SBCs Must be Provided In a “Culturally and Linguistically Appropriate Manner”
Which Languages Qualify? (*New for 2025)
● Spanish
● 216 Counties in AZ, AK, CA, CO, FL, GA, ID, IA, KS,
MN, NE, NM, NY, NC, OK, OR, PR, TX, VA, WA
● Tagalog (includes Filipino)
● 10 Counties in AK, Northern Mariana Islands
● Samoan*
● 3 Counties in American Samoa
● Chamorro*
● 3 Counties in Northern Mariana Islands
● Pennsylvania Dutch (Includes Yiddish/West Germanic)***
● 2 Counties in IN, OH
● Chinese (includes Mandarin and Cantonese)
● 1 County in CA
● Navajo
● 1 County in AZ
● Note: Navajo oral translation also available (mp3 format)
● Carolinian***
● 1 County in Northern Mariana Islands
New 2023 CLAS County Data Applies Going Forward
• Applies to SBCs for Plan Years beginning on or after January 1, 2025
Required SBC Language Translations
SBCs Must be Provided In a “Culturally and Linguistically Appropriate Manner”
Updated Templates to Include New Languages
New 2023 CLAS County Data Applies Going Forward
- Applies to SBCs for Plan Years beginning on or after January 1, 2025
Where to Access 2023 CLAS County Data: https://www.dol.gov/sites/dolgov/files/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/clas-county-data-2023.pdf
Where to Access SBC Translations: https://www.cms.gov/marketplace/resources/forms-reports-other
05
Enforcement
Will SBC Enforcement Finally Ramp Up?
The Neverending Story: Good Faith Enforcement Safe Harbor
SBC Penalty Provisions
• An employer that willfully fails to provide SBCs in accordance with the SBC rules is subject to a
penalty of up to $1,443 (indexed) per failure
• Failure with respect to each employee or dependent constitutes a separate offense
• If the employee has a family of four, the penalty could be up to $5,772!
• Failures may also trigger the standard $100/day ACA excise tax liability under IRC §4980D
• Failures may also be considered a breach of fiduciary duty under ERISA
Temporary Good Faith Standard Appears to Still Apply
• Since SBCs took effect in 2012, Tri-Agencies (DOL/IRS/HHS) have stated that they “will not
impose penalties on plans and issuers that are working diligently and in good faith to provide
the required SBC content in an appearance that is consistent with the [SBC rules]”
• Tri-Agencies reiterated in 2014 that this good faith enforcement safe harbor from potential
penalties applies “until further guidance is provided”
• Although it raised eyebrows that the good faith standard went unaddressed in the most recent
2015 SBC regulations, no further guidance has wound down this long-lasting safe harbor
Will the IRS Finally Enforce
the SBC Rules?
● During the Obama
Administration when the good
f aith standard began, SBCs
were new and therefore it
made sense to have a
transitional period
● Given the long runway now
(over a decade) for
employers to adjust, it seems
appropriate to consider an
end to the penalty relief soon
● As we enter a new era of
SBC templates/translations, it
may be time to wind down the
relief and begin enforcement
WRAP-UP Takeaways
SBCs for Employers – Top Five Issues
Remember: SBC Templates, the Uniform Glossary, Instructions, Coverage Example Calculators, Translations, and More Available at:
https://www.cms.gov/marketplace/resources/forms-reports-other
| 1 Required Content | 2 When, What, How, Who? | 3 Mid-Year Changes | 4 Required Languages | 5 Enforcement |
|---|---|---|---|---|
| The SBC rules set forth very specific content, formatting, and appearance requirementsThe document cannot exceed four pages, but the Departments have interpreted that limitation to mean double-sided pagesPractical Reality:Everyone uses the cookie cutter templates from the DepartmentsWhere fully insured, the carrier almost always prepares the SBCFor self-insured, the TPA generally will also agree to prepare the SBCs | Provide SBCs upon initial enrollment, special enrollment, open enrollment, and upon request within set timeframesProvide the SBC for each plan option for which the employee is eligible in most cases—but at open enrollment only requirement is to provide current plan option SBC to enrolled EEsRelaxed electronic distribution rules allow employers to provide SBCs electronically in large majority of situations, especially if they have online enrollmentSBCs go to employees and dependents—but one is sufficient if the dependent lives with the employee | SBCs mid-year changes are different from the standard SMM rules!60-day advance notice requirement for SBC mid-year material modificationsApplies to any mid-year material modification of SBC content—even enhancements of coverageCan be handled through separate notice addressing changes or updated SBCSMM rule for non-SBC situations provides until 60 days after adoption of material reductions to health benefits, or 210 days after the plan year for other changes | ACA requires that SBC be provided in a “culturally and linguistically appropriate manner”Requires oral language services (phone hotline), translated SBCs, and statement in SBC of how to access language servicesApplies if at least 10% of the population residing in the county is literate only in the same non-English languageNew survey and census data applies for SBCs after ‘25 where language services are neededSBC Language Requirements:Spanish, Tagalog, Samoan, Chamorro, Pennsylvania Dutch, Chinese, Navajo, Carolinian | We’ve been in a good faith enforcement safe harbor since the SBC requirement first began in 2012When will it end?There does not appear to be a strong justification for continuing the good faith enforcement standard at this pointReasonable to assume that the IRS will turn to standard enforcement at some pointWhen standard enforcement applies, there are significant potential penalties for SBC failuresUp to $1,443 penalty applies for willful SBC failuresFailure with respect to each employee and dependent constitutes a separate offense! |
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Summary of Benefits and Coverage (SBC)
The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential
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policies or programs.
Thank you
Brian Gilmore
Lead Benefits Counsel, VP
brian.gilmore@newfront.com
License #0H55918 Newfront Disclaimer: The information provided is of a general nature and an educational resource. It is not intended to provide advice or address the situation of any particular individual or entity.
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