1. April 30, 2013
Health Care Reform Update: Week of April 29
Agencies Release FAQs on SBCs
The agencies charged with implementing the health care reform law (the Departments of Labor,
Treasury and Health and Human Services) recently released another set of FAQs that address
employers’ questions regarding compliance with the law. The FAQs, which specifically focus on the
summary of benefits and coverage (SBC) requirement, can be found here:
http://www.dol.gov/ebsa/faqs/faq-aca14.html.
The SBC is intended to help individuals better understand their health coverage. Information about
the SBC requirements can be found in the Willis Human Capital Practice Alert, March 2012, “
Summary of Benefits and Coverage: Final Regulations Released.”
SBC Changes: Year Two
When the agencies released final regulations on the SBC requirements in February 2012, they also
announced the availability of templates, instructions, and related materials for implementing the
disclosure requirements for the first year of applicability of the SBC requirements (for SBCs and
uniform glossary provided with respect to coverage beginning before January 1, 2014). The recent
FAQs provide answers to employers regarding the second-year applicability of the SBC (coverage
beginning on or after January 1, 2104 and before January 1, 2015). Specifically, the SBC template
has been updated to include required information on whether the coverage “provides minimum
essential coverage (MEC) and whether the plan's or coverage's share of the total allowed costs of
benefits provided under the plan or coverage meets applicable minimum value (MV) requirements.”
For additional information about these requirements, please see Willis’ Human Capital Practice Alert,
February 2013, "Employer Pay or Play Excise Taxes - Where Are We Now?"
There are no changes to the uniform glossary. There are also no changes to the Instructions for
Completing the SBC (for either group or individual health coverage), the “Why This Matters”
language for the SBC or to the coverage examples (additional coverage examples are not required for
2014). The FAQs also extend existing safe harbors and enforcement relief related to the requirement
to provide an SBC and uniform glossary to the second year of applicability. The agencies had
previously provided that, during the first year of applicability, they would not impose penalties on
group health plans and insurers that were “working diligently and in good faith to provide the
required SBC content in an appearance that is consistent with the final regulations.”
An updated SBC template (and sample completed SBC) are now available at cciio.cms.gov and
www.dol.gov/ebsa/healthreform. To the extent the employer or insurer is unable to modify the SBC
template for disclosures required to be provided with respect to the second year of applicability (e.g.,
because the plan is already in the process of preparing SBCs for issuance in the second year of
applicability and adding the new information to the template would be an administrative burden), the
FAQs state that the agencies will not take any enforcement action against the employer or insurer if

2. April 30, 2013
the SBC is furnished with a cover letter or similar disclosure that provides the required information.
The agencies have provided sample language for this disclosure in the FAQs (see FAQ #2).
This information is not intended to represent legal or tax advice and has been prepared solely for informational
purposes. You may wish to consult your attorney or tax adviser regarding issues raised in this publication.