Insight to Action

Benefits & Healthcare Update: Agencies Propose a Revised Summary of Benefits Coverage Template

2 March 2016

On February 25, 2016, the Department of Health and Human Services, the Department of Labor, and the Internal Revenue Service proposed significant revisions to the Summary of Benefits Coverage ("SBC") template. The proposed changes will require additional questions to be included in the SBC as well as new disclosures from health plans. If the changes are adopted, they will apply to the 2017 plan year SBCs that plans must distribute during fall 2016 open enrollment.The proposed SBC template is available for public comment for 30 days.

Counting Services toward Deductible

The proposed SBC template includes a new question, "Are these services covered before you meet your deductible?" to identify health plans that cover some primary care services as well as generic or preferred drugs before the deductible amount is reached.

Embedded Limits

The proposed instructions requires family plans to disclose whether a plan has embedded or non-embedded deductibles and out-of-pocket limits.With an embedded deductible or out-of-pocket limit, family members can meet individual deductibles before the family deductible or out-of-pocket limit is met. A non-embedded deductible or out-of-pocket limit requires the family to fully reach the deductible or our-of-pocket limit before any family member benefits from the limit.

Tiered Networks

When responding to the question "Will you pay less if you use a network provider?" plans must make clear which provider tiers are the most and least expensive.

Core Benefit Limitations

There is also a requirement to disclose "core" limitations, including:
    • When a service category or substantial part of a category is not covered;
    • When cost sharing for covered in-network services does not count toward the out-of-pocket limit;
    • When limits apply to the number of visits or specific dollar amounts payable under the plan; and
    • When prior authorization is required for service.

New Coverage Example

The proposed SBC template adds a new coverage example: breaking a leg. This is in addition to the two previous example scenarios, treating Type II diabetes and having a baby.

Effective Date: Open Enrollment for 2017

If the Agencies finalize the proposed template SBC, the new template must be used to describe coverage for plan years beginning on or after January 1, 2017. Insurers must provide SBCs and self-insured group health plans must revise their SBCs using the new template for open enrollment in fall 2016.

The Proposed SBC Template can be found here:

The proposed SBC template's instructions can be found here: