How to Help Your Members Understand the 'Summary of Benefits Coverage' Issued to Them by Health Plans and Insurers
Q: I just received a document called a Summary of Benefits Coverage (“SBC”). What is it?
A: The Affordable Care Act (“Obamacare”) requires insurance companies and health plans to provide an SBC to individuals looking for health care coverage at important points in the enrollment process. The purpose of the SBC is: (1) to summarize the plan’s benefits and coverage; and (2) to do so in a standard format that allows an “apples-to-apples” comparison.
Q: What does the SBC look like?
A: Insurance companies and group health plans must use the same standard SBC form to help you compare health plans. The form is eight pages long and can be printed front-and-back. Generally, it is printed in white and pale blue. You can find a model of the form by clicking here.
Q: What information is in the SBC?
A: The SBC has four types of information:
- “Important Questions,” listing deductibles, coinsurance and out-of-pocket spending limits, and stating whether the plan uses network providers and whether a patient needs a referral to see a specialist.
- “Common Medical Events,” describing the patient’s financial responsibility for the following medical services:
- - primary care physician or specialist visit;
- diagnostic test;
- prescription drugs (generic, brand, specialty);
- outpatient surgery or inpatient hospitalization;
- emergency room visit;
- prenatal care and childbirth
- “Excluded Services & Other Covered Services,” listing what services are not covered (e.g. infertility treatments, cosmetic surgery, etc.) or are covered (e.g. acupuncture, bariatric surgery, chiropractic care, etc.)
- “Coverage Examples,” showing how much a patient would pay for having a baby or for managing type 2 diabetes relative to how much he would pay under a number of different plans.
Q: Our health fund told me that the “Coverage Examples” don’t reflect the costs that our particular fund pays for having a baby or managing type 2 diabetes. Is this true and, if so, how does that help our members?
A: The “Coverage Examples” are a little tricky to understand but the first thing to tell members is that they are can’t be used as “cost estimators” and that they will not tell you exactly how much you would owe under different plans. The actual amounts you may have to pay will differ.
In coming up with the examples, every health plan must start from the same fixed cost, and then apply its own deductible, coinsurance and copayments to this fixed starting point. That way, even if the payable amount isn’t exactly correct, patients can compare whether one health plan is more expensive than another.
Q: How often does a health plan have to issue SBC’s?
A: A health plan must provide SBC’s at least annually before the plan’s open enrollment period, as well as for new enrollees.