Question: Our company distributes an updated Summary Plan Description (SPD) every year. If we distribute the new SPD by the first day of open enrollment, do we also have to distribute the short Summary of Benefits and Coverage (SBC)?
Answer: Yes. A group health plan with medical benefits must provide the SBC to all enrolled participants, regardless of any other plan materials. At open enrollment, currently enrolled participants must be given the SBC for the plan in which they are enrolled (and they may request the SBC for a different plan if eligible.) Employees who are eligible but not enrolled may be given either the SBC or a notice explaining that the SBC is available and how to access it.
The SBC explains the plan’s benefits, cost-sharing requirements, coverage examples, and contact information in a standardized format. It does not take the place of any other required plan material, such as SPDs, evidence of coverage (EOC) booklets, or insurance certificates.
Your company may want to consider distributing the SBC along with your new SPD. The SBC may be a stand-alone document, or it may be included in the plan’s SPD for convenience, as long as it is distributed by the start of open enrollment. If included in the SPD, the SBC content must be intact and prominently displayed (such as immediately after the table of contents) and in the required format.
