Benefits Briefs in the Time of COVID-19, Part 1: Federal Agencies Relax Summary of Benefits and Coverage (“SBC”) Disclosure Deadlines

Recent guidance from the Department of Labor (“DOL”), Health and Human Services (“HHS”) and Treasury (the “Departments”) provides limited enforcement relief from the summary of benefits and coverage (“SBC”) disclosure rules during the COVID-19 crisis for employers to comply with the CARES Act or to add other benefits to their group health plans.

Dickinson Wright’s All Things HR Blog is beginning a multi-part series on frequent issues and questions faced by employers during the COVID-19 crisis. They are intended to be brief, readable, and informative summaries to help bring human resources personnel and employers up to speed.

Basic SBC Rules

As part of the Affordable Care Act’s (“ACA”) reforms, all group health plans subject to the ACA are required to provide a SBC to employees eligible for coverage prior to enrollment or re-enrollment.

If during a plan year, the plan is materially amended in such a way that changes the information on the SBC, the plan must supply an updated SBC or at least a notice of the change at least 60 days in advance of the change. A “material” change is one that would be considered important by the average plan participant.

Limited SBC Relief for CARES Act Changes

With respect to group health plans, the CARES Act made a number of changes for group health plans that applied retroactively, including:

  • Coverage for COVID-19 testing;
  • Allowing plans to permit the purchase of over-the-counter medical products using HSAs, FSAs, MSAs, and HRAs; and
  • Permitting high-deductible-health-plans to pay for telehealth services pre-deductible.

Given that these changes were made retroactively, it would be impossible for group health plan sponsors to comply with the SBC requirement. Therefore, the Departments have provided that changes made consistent with the CARES Act are not subject to the 60-day advanced notice requirement, so long as notice is provided “as soon as reasonably practicable.”

Notice may be provided by distributing an updated SBC reflecting the modification or providing a separate notice describing the modifications.

Additional Relief for Greater Coverage Related to COVID-19

Additionally, sponsors of group health plans may expand coverage related to the diagnosis or treatment of COVID-19 beyond the requirements of the CARES Act without complying with the 60-day advanced notice rules.

Changes Not Covered

The Departments will continue to take enforcement action, however, against any plan that attempts to limit or eliminate other benefits, increase cost-sharing, or reduces other benefits to offset the cost of increasing COVID-19 benefits, without complying with the disclosure requirements.

Time Period for the Relief

The non-enforcement period applies for applicable changes made during the period during which a public health emergency declared under the Public Health Service Act or a national emergency declaration related to COVID-19 declared under the National Emergencies Act is in effect. To the extent that the changes extend beyond the emergency period, plans must comply with all other applicable requirements to update plan documents and terms of coverage.

About the Author

Eric W. Gregory is a Member in Dickinson Wright’s Troy office where he assists clients in all areas of employee benefits law, including qualified retirement plans, welfare plans, and non-qualified compensation programs. Eric can be reached at 248-433-7669 or and you can visit his bio here.