Regulators Provide Guidance on Summary of Benefits Rules

Adding additional certainty to previous guidance, federal regulators made clear last week that they will not impose financial penalties on employers that do not fully comply with health care reform law requirements that will require them to distribute to employees a new summary of benefits and coverage statement.

In February, the Obama administration delayed by six months the requirement to distribute to employees the new summary of benefits and coverage statement.

The requirement will go into effect for plan years that begin on or after Sept. 23, 2012. For example, if a plan year begins on Jan. 1, 2013, and the employer’s open enrollment period is from Oct. 1 to Nov. 1, the new SBC would have to be available by Oct. 1, 2012.

At the time, regulators said they did not “intend” to impose penalties during the first year the requirement is in effect so long as employers are working in “good faith” to comply.

In the latest guidance, released as part of frequently asked questions and answers, regulators said during the first year the requirement is in effect agencies “will not impose penalties on plans and issuers that are working diligently and in good faith to comply.”

Benefits experts welcome the latest clarification.

“The new FAQs provide welcome assurance for employers and insurers that, if they are working diligently and in good faith to comply, they will not be penalized the first year,” said Andy Anderson, a partner with Morgan, Lewis & Bockius L.L.P. in Chicago.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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