What Is a Summary of Benefits? 

Health insurance and employee benefits can be complicated and even confusing subjects. However, policyholders cannot afford to lack complete comprehension of their plans and options, as misunderstandings could lead to lacking coverage and unmanageable health care costs. With these stakes in mind, insurance companies and employers providing group benefits options are required to provide essential information to policyholders via a document called a summary of benefits.

Understanding Summary of Benefits Documents

Also known as a summary of benefits and coverage (SBC), these documents live up to their name by including key information about a person’s health plan. SBCs play a critical role in helping policyholders maximize the cost-effectiveness of their coverage selections while avoiding any gaps that could leave them without access to essential medical services.

Under the Affordable Care Act, qualifying health insurance providers and those who oversee group health plans, such as employers, must provide SBCs to members. These documents should be provided to policyholders by the first day their health plan is active.

What Is Included in an SBC?

SBCs are required to include the following information:

• Uniform definitions of standard medical and insurance terms
• Descriptions of coverage sorted by specific benefit categories
• Exceptions, reductions and limitations within the health plan
• Cost-sharing information, such as regarding deductibles, coinsurance and copayments
• Provisions related to renewal and continuation of coverage
• Examples of how benefits can be used in real-life scenarios
• A statement ensuring awareness that the SBC represents only a summary of the plan in question and that more detailed coverage documents should be consulted for additional information
• A statement regarding whether coverage meets minimum applicable requirements
• Contact information for where policyholders can obtain a copy of their policy, certificate or contract of insurance
• Contact information to help policyholders acquire a list of network providers (applicable to plans and issuers that maintain provider networks)
• Contact information for reviewing details of prescription drug coverage (applicable to plans and issuers that use a formulary to provide coverage for prescription drugs)
• A web address directing policyholders to a uniform glossary of health care and insurance terms, as well as a disclosure that paper copies of the glossary are available and contact information to obtain one

We’re Here to Help

Health insurance is essential to maintaining, recovering and otherwise managing your daily well-being. However, you must understand its details to utilize your coverage and benefits fully. Fortunately, SBCs can help provide this essential information, ensuring you are aware of your coverage’s capabilities and limitations and avoid any surprises or unexpected hurdles.

Contact Sunstar Insurance of Arkansas for more information about health plans and to ensure you are adequately covered.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.