Benefits Buzz
New SBCs for 2021 and Grandmothered Plan Extension
Posted on February 12th, 2020
New SBCs Required in 2021
The Affordable Care Act (ACA) includes a requirement for most individual and group health insurance plans to provide a Summary of Benefits and Coverage (SBC) document to covered members at various times. The SBC is intended to help people understand their insurance benefits and/or compare plans. From time to time, the Department of Labor (DOL) and Department of Health and Human Services (HHS) have made changes to the SBC, and they’ve recently announced an updated version will be required to be used in 2021.
The primary change is language pertaining to minimum essential coverage. The minimum essential coverage language that has been used in previous SBC templates was intended to help people understand if the coverage satisfied the Individual Mandate requirement; however, since the Individual Mandate has been eliminated at the federal level the DOL and HHS decided this language needed to be changed.
Access to the 2021 template and related materials can be found here.
Grandmothered Plan Extension
Health plans in the individual and small group markets that were issued after March 23, 2010 and prior to January 1, 2014 are commonly referred to as grandmothered plans. March 23, 2010 is the date the Affordable Care Act (ACA) was signed into law, while January 1, 2014 is the so-called full implementation date of the ACA.
Grandmothered plans were supposed to be terminated on the full implementation date of the ACA because they failed to satisfy all of the ACA’s market reforms, but the federal government has offered temporary, transitional relief which has allowed these plans to continue to exist. This relief was set to expire later this year, but the Centers for Medicare and Medicaid Services (CMS) has indicated they are authorizing an additional extension. This is now the sixth extension that has been authorized.
In a recently issued bulletin, CMS announced that grandmothered plans can continue to be renewed for plan years beginning on or before October 1, 2021, provided that the plans end by December 31, 2021. States and insurance carriers must also agree to the extension. In other words, the CMS guidance is an option for states and carriers, not a requirement. Additionally, a state or carrier may choose to extend grandmothered plans in just the individual market, just the small group market, or both markets. We should expect to see guidance soon.
It should be noted that this guidance has no impact on grandfathered plans which were in effect on or before March 23, 2010. Grandfathered plans can continue to exist permanently without having to comply with all of the ACA’ s market reforms.
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