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Wednesday, May 30, 2012

Even though health reform’s legal status is up in the air, plan sponsors are still taking cautious steps forward to make sure they are ready if it survives the Supreme Court challenge. One of those steps, which is coming soon, is the Summary of Benefits and Coverage requirement, which has to be initially provided for the first open enrollment period beginning on or after September 23, 2012.

Many plan sponsors mistakenly assume that their employee assistance programs (EAPs) or wellness programs are not subject to these requirements. However, as we discussed in our post on W-2 reporting of health coverage, EAPs that provide counseling (even for only a few sessions) and wellness programs that provide medical care are technically group health plans under ERISA. Among other implications, this means they are subject to SBC requirements.

That said, plan sponsors do have some structuring alternatives that may help ease compliance with this requirement and avoid the need for a separate SBC. For example, if a plan sponsor documents the EAP or wellness program as part of its group health plan, a separate SBC for the EAP or wellness program may not be required. However, the plan sponsor may need to tweak the SBC disclosures to take into account these additional benefits. The EAP or wellness provider may not be equipped to help complete the SBC, and any insurer or TPA (for a self-funded plan) may not be aware that EAP or wellness services are being offered separately. Plan sponsors should be mindful of this in putting SBCs together which only serves as further proof of the axiom that no good deed (such as providing EAP or wellness services) goes unpunished.

Related Links

Summary of Benefits and Coverage FAQs Parts VII and IX

SBC Template

SBC Sample

CCIIO List of Internet SBC Resources

Other SBC Resources

Other Health Care Reform Posts

Disclaimer/IRS Circular 230 Notice

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