Summary of Benefits and Coverage (SBC) and Glossary 

The ACA requires that employers provide a Summary of Benefits and Coverage (SBC) for each benefit package offered by a plan for which a participant is eligible. The SBC and Glossary of Health Coverage and Medical Terms must be provided to all members by the first day of open enrollment (or eligible enrollment); at least 90 days before Special Enrollment; if re-enrollment is automatic, at least 30 days prior to the new plan year; and upon request. Effective 1/15/2023, employers can be penalized up to $1,362 for each employee who fails to receive the SBC. 

An SBC is a customized document that: 

• Helps members better understand the benefits offered 

• Allows members to easily compare different coverage options 

• Explains the employer’s health plan benefits in easy-to-understand language and in the required consistent format 

According to the ACA, the document must include: 

• A detailed summary of the health plan’s coverage 

• Examples of how the plan would pay for healthcare services 

• The phone number and website for customer service 

• The Glossary of Health Coverage and Medical Terms 

The SBC provided by a group health plan must also indicate whether the health plan provides: 

• Minimum essential coverage1 and 

• Minimum value2 

New SBC Template for Plan Years Beginning Jan. 1, 2021 
The U.S. Department of Labor has issued a new Summary of Benefits and Coverage (SBC) template, instruction and related materials. Plans and insurers must use the documents beginning on the first day of the first open enrollment period for any plan/policy years that begin on or after Jan. 1, 2021, with respect to coverage for plan/policy years beginning on or after that date. 

Glossary 
The Glossary of Health Coverage and Medical Terms is updated to remove the definition of Individual Responsibility Requirement and update the definition of Minimum Essential Coverage to reflect this change. 

Other Changes 

• The update also adds the “Total Example Costs” for each of the three coverage examples to the template. 

• The release also updates the versions of the calculator, guides and narratives, in a number of ways. A complete list of updates to the Calculator, Guide, and Narratives is available here. 

• Lastly, the individual mandate penalty was reduced to zero. 

Here is the new template. 

Here is a sample of the completed new SBC. 

Group health plans should follow this link for help with completing the SBC. 

Here are answers to common questions.