Understanding the Summary of Benefits and Coverage (SBC): What Employers Need to Know
Clear communication is one of the most important parts of a successful benefits strategy. The Summary of Benefits and Coverage (SBC) is designed to help employees understand their health plan options using standardized, easy-to-compare information.
While the SBC has been required under the Affordable Care Act (ACA) for years, it remains an area where employers can strengthen both compliance and employee experience.
Here’s what employers should understand.
What Is the SBC?
The Summary of Benefits and Coverage is a standardized document that outlines key details about a health plan, including:
- Covered services and benefits
- Cost-sharing responsibilities such as deductibles and copays
- Plan limitations and exclusions
- Examples of how coverage works in common medical scenarios
The goal is simple: give employees clear, comparable information so they can make informed decisions about their healthcare coverage.
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Why the SBC Matters
The SBC isn’t just a compliance requirement. It’s also a communication tool.
Because all SBCs follow a consistent format, employees can compare different plans more easily. This helps reduce confusion during enrollment and supports more confident decision-making.
For employers, providing accurate and accessible SBCs demonstrates transparency and helps reduce misunderstandings about coverage.
When Employers Must Provide an SBC
Employers generally need to distribute SBCs at several key moments:
- During initial enrollment
- As part of annual open enrollment materials
- Upon employee request
- When significant changes are made to plan coverage
The document must also be delivered in a way that is easy for employees to access and understand, whether electronically or in print.
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Common Compliance Considerations
While the SBC format is standardized, employers should still review their processes regularly to ensure accuracy and consistency.
Key areas to watch include:
- Ensuring SBC content matches actual plan design
- Providing updated versions when changes occur
- Including required elements like the Uniform Glossary
- Making sure distribution timelines are followed
Often, compliance challenges come from operational details rather than intentional oversight.
The Maddock Perspective
At Maddock & Associates, we view the SBC as more than a regulatory requirement. It’s an opportunity to improve clarity and strengthen employee understanding of their benefits.
When SBCs are integrated thoughtfully into broader communication strategies, they can help reduce confusion, support better plan choices, and improve overall employee satisfaction.
A proactive review of your SBC process can help ensure compliance while enhancing the employee experience.
If you have questions about your SBC or overall benefits communication strategy, we’re always here as a resource.
For more insights and practical guidance, explore the article, "Compliance Corner: Understanding the Summary of Benefits and Coverage - A Primer for Employers" by Colin Clark in this month’s Benefitting You newsletter.
