[Federal Register Volume 80, Number 115 (Tuesday, June 16, 2015)]
[Rules and Regulations]
[Pages 34292-34315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-14559]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD-9724]
RIN 1545-BM53

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AB69

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 147

[CMS-9938-F]
RIN 0938-AS54


Summary of Benefits and Coverage and Uniform Glossary

AGENCY: Internal Revenue Service, Department of the Treasury; Employee 
Benefits Security Administration, Department of Labor; Centers for 
Medicare & Medicaid Services, Department of Health and Human Services.

ACTION: Final rules.

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SUMMARY: This document contains final regulations regarding the summary 
of benefits and coverage (SBC) and the uniform glossary for group 
health plans and health insurance coverage in the group and individual 
markets under the Patient Protection and Affordable Care Act. It 
finalizes changes to the regulations that implement the disclosure 
requirements under section 2715 of the Public Health Service Act to 
help plans and individuals better understand their health coverage, as 
well as to gain a better understanding of other coverage options for 
comparison.

DATES: Effective Date: These final regulations are effective on August 
17, 2015.

FOR FURTHER INFORMATION CONTACT: Elizabeth Schumacher or Amber Rivers, 
Employee Benefits Security Administration, Department of Labor, at 
(202) 693-8335; Karen Levin, Internal Revenue Service, Department of 
the Treasury, at (202) 317-5500; Heather Raeburn, Centers for Medicare 
& Medicaid Services, Department of Health and Human Services, at (301) 
492-4224.
    Customer Service Information: Individuals interested in obtaining

[[Page 34293]]

information from the Department of Labor concerning employment-based 
health coverage laws may call the EBSA Toll-Free Hotline at 1-866-444-
EBSA (3272) or visit the Department of Labor's Web site (http://www.dol.gov/ebsa). In addition, information from HHS on private health 
insurance for consumers can be found on CMS's Web site (www.cms.gov/cciio) and information on health reform can be found at http://www.healthcare.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    The Patient Protection and Affordable Care Act, Public Law 111-148, 
was enacted on March 23, 2010; the Health Care and Education 
Reconciliation Act, Public Law 111-152, was enacted on March 30, 2010. 
These statutes are collectively known as the Affordable Care Act. The 
Affordable Care Act reorganizes, amends, and adds to the provisions of 
part A of title XXVII of the Public Health Service Act (PHS Act) 
relating to group health plans and health insurance issuers in the 
group and individual markets. The term ``group health plan'' includes 
both insured and self-insured group health plans.\1\ The Affordable 
Care Act adds section 715(a)(1) to the Employee Retirement Income 
Security Act (ERISA) and section 9815(a)(1) to the Internal Revenue 
Code (the Code) to incorporate the provisions of part A of title XXVII 
of the PHS Act into ERISA and the Code, and make them applicable to 
group health plans, and health insurance issuers providing health 
insurance coverage in connection with group health plans. The PHS Act 
sections incorporated by this reference are sections 2701 through 2728.
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    \1\ The term ``group health plan'' is used in title XXVII of the 
PHS Act, part 7 of ERISA, and chapter 100 of the Code, and is 
distinct from the term ``health plan,'' as used in other provisions 
of title I of the Affordable Care Act. The term ``health plan'' does 
not include self-insured group health plans.
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    Section 2715 of the PHS Act, as added by the Affordable Care Act, 
directs the Departments of Labor, Health and Human Services (HHS), and 
the Treasury (the Departments) \2\ to develop standards for use by a 
group health plan and a health insurance issuer offering group or 
individual health insurance coverage in compiling and providing a 
summary of benefits and coverage (SBC) that ``accurately describes the 
benefits and coverage under the applicable plan or coverage.'' PHS Act 
section 2715 also calls for the ``development of standards for the 
definitions of terms used in health insurance coverage.''
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    \2\ Note, however, that in sections under headings listing only 
two of the three Departments, the term ``Departments'' generally 
refers only to the two Departments listed in the heading.
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    In accordance with the statute, the Departments, in developing such 
standards, consulted with the National Association of Insurance 
Commissioners (referred to in this document as the ``NAIC''),\3\ and 
the NAIC provided its final recommendations to the Departments 
regarding the SBC on July 29, 2011. On August 22, 2011, the Departments 
published proposed regulations (2011 proposed regulations) and an 
accompanying document soliciting comments on the template, 
instructions, and related materials for implementing the disclosure 
provisions under PHS Act section 2715.\4\ After consideration of all 
the comments received on the 2011 proposed regulations and accompanying 
documents, the Departments published joint final regulations to 
implement the disclosure requirements under PHS Act section 2715 on 
February 14, 2012 (2012 final regulations) and an accompanying document 
with the template, instructions, and related materials.\5\
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    \3\ The NAIC convened a working group (NAIC working group) 
comprised of a diverse group of stakeholders. This working group met 
frequently for over one year while developing its recommendations. 
In developing its recommendations, the NAIC considered the results 
of various consumer testing sponsored by both insurance industry and 
consumer associations. Throughout the process, NAIC working group 
draft documents and meeting notes were displayed on the NAIC's Web 
site for public review, and several interested parties filed formal 
comments. In addition to participation from the NAIC working group 
members, conference calls and in-person meetings were open to other 
interested parties and individuals and provided an opportunity for 
non-member feedback. See www.naic.org/committees_b_consumer_information.htm.
    \4\ See proposed regulations, published at 76 FR 52442 (August 
22, 2011) and guidance document published at 76 FR 52475 (August 22, 
2011).
    \5\ See final regulations, published at 77 FR 8668 (February 14, 
2012) and guidance document published at 77 FR 8706 (February 14, 
2012).
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    After the 2012 final regulations were published, the Departments 
released Frequently Asked Questions (FAQs) regarding implementation of 
the SBC provisions as part of six issuances. The Departments released 
FAQs about Affordable Care Act Implementation Parts VII, VIII, IX, X, 
XIV, and XIX to answer outstanding questions, including questions 
related to the SBC.\6\ These FAQs addressed questions related to 
compliance with the requirements of the 2012 final regulations, 
implemented additional safe harbors,\7\ and released updated SBC 
materials.
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    \6\ See Frequently Asked Questions about Affordable Care Act 
Implementation Part VII (available at www.dol.gov/ebsa/faqs/faq-aca7.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs7.html); Part VIII (available at 
www.dol.gov/ebsa/faqs/faq-aca8.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs8.html); Part 
IX (available at www.dol.gov/ebsa/faqs/faq-aca9.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs9.html); Part X (available at www.dol.gov/ebsa/faqs/faq-aca10.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs10.html); Part XIV 
(available at www.dol.gov/ebsa/faqs/faq-aca14.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs14.html); and Part XIX (available at 
www.dol.gov/ebsa/faqs/faq-aca19.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs19.html).
    \7\ As discussed more fully herein, some of the enforcement safe 
harbors and transitions are being made permanent (several with 
modifications) by these final regulations.
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    On December 30, 2014, the Departments issued proposed regulations 
(December 2014 proposed regulations), as well as a new proposed SBC 
template, instructions, an updated uniform glossary, and other 
materials to incorporate some of the feedback the Departments have 
received and to make some improvements to the template.\8\ The draft 
updated template, instructions, and supplementary materials are 
available at http://cciio.cms.gov and http://www.dol.gov/ebsa/healthreform/regulations/summaryofbenefits.html.
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    \8\ See proposed regulations published at 79 FR 78577 (December 
30, 2014).
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    On March 30, 2015, the Departments released an FAQ stating that the 
Departments intend to finalize changes to the regulations in the near 
future but intend to utilize consumer testing and offer an opportunity 
for the public, including the NAIC, to provide further input before 
finalizing revisions to the SBC template and associated documents.\9\ 
The Departments anticipate the new template and associated documents 
will be finalized by January 2016 and will apply to coverage that would 
renew or begin on the first day of the first plan year (or, in the 
individual market, policy year) that begins on or after January 1, 2017 
(including open season periods that occur in the Fall of 2016 for 
coverage beginning on or after January 1, 2017).
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    \9\ See Frequently Asked Questions about Affordable Care Act 
Implementation Part XXIV, available at http://www.dol.gov/ebsa/faqs/faq-aca24.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs24.html.
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    After consideration of the comments and feedback received from 
stakeholders in response to the December 2014 proposed regulations, the 
Departments are publishing these final regulations. In response to the 
2014 proposed regulations, the Departments received comments on the 
regulations as well as the template and

[[Page 34294]]

associated documents. The Departments received many comments on the 
proposed changes to the template and associated documents but received 
very few comments relating to the regulations. As stated in the FAQ 
issued on March 30, 2015, the Departments anticipate the new template 
and associated documents will be finalized by January 2016, and, 
therefore, only the comments on the regulations will be addressed in 
this final rule. Comments relating to the template and associated 
documents will be addressed when those documents are finalized.

II. Overview of the Final Regulations

A. Requirement To Provide a Summary of Benefits and Coverage

1. Provision of the SBC by an Issuer to a Plan
    Under paragraph (a)(1)(i) of the 2012 final regulations, a health 
insurance issuer offering group health insurance coverage must provide 
an SBC to a group health plan (or its sponsor) upon an application by 
the plan for health coverage. The issuer must provide the SBC as soon 
as practicable following receipt of the application, but in no event 
later than seven business days following receipt of the application. 
The Departments proposed to add language to clarify that, under the 
2012 final regulations, a health insurance issuer offering group health 
insurance coverage (or plan, if applicable, under paragraph (a)(1)(ii), 
as discussed below) is not required to automatically provide the SBC 
again if the issuer already provided the SBC before application to any 
entity or individual, provided there is no change in the information 
required to be in the SBC.
    The comments the Departments received on this clarification 
generally supported the proposed language and, accordingly, these final 
regulations finalize the language of the proposed regulations without 
change. Therefore, these final regulations include language clarifying 
that, if the issuer provides the SBC upon request before application 
for coverage, the requirement to provide an SBC upon application is 
deemed satisfied, and the issuer is not required to automatically 
provide another SBC upon application to the same entity or individual, 
provided there is no change to the information required to be in the 
SBC. However, if there has been a change in the information required to 
be included in the SBC, a new SBC that includes the changed information 
must be provided upon application (that is, as soon as practicable 
following receipt of the application, but in no event later than seven 
business days following receipt of the application).
    Under paragraph (a)(i)(B) of the 2012 final regulations, if there 
is any change in the information required to be in the SBC that was 
provided upon application and before the first day of coverage, the 
issuer must update and provide a current SBC to the plan (or its 
sponsor) no later than the first day of coverage. If the information is 
unchanged, the issuer does not need to provide the SBC again in 
connection with coverage for that plan year, except upon request. The 
December 2014 proposed regulations stated that if the plan sponsor is 
negotiating coverage terms after an application has been filed and the 
information required to be in the SBC changes, an updated SBC is not 
required to be provided to the plan or its sponsor (unless an updated 
SBC is requested) until the first day of coverage. The updated SBC 
should reflect the final coverage terms under the policy, certificate, 
or contract of insurance that was purchased.
    Some commenters supported the clarification and stated that if 
there is a change in the information required, a new SBC that includes 
the changed information must be provided upon application. Other 
commenters stated that enrollees in both the group and individual 
markets need to know of pending plan changes during open and special 
enrollment periods so that they can make informed decisions about their 
plan options.
    These final regulations finalize the language of the proposed 
regulations without change. Therefore, if the plan sponsor is 
negotiating coverage terms after an application has been filed and the 
information required to be in the SBC changes, an updated SBC is not 
required to be provided to the plan or its sponsor (unless an updated 
SBC is requested) until the first day of coverage. The updated SBC is 
required to reflect the final coverage terms under the policy, 
certificate, or contract of insurance that was purchased.
2. Provision of the SBC by a Plan or Issuer to Participants and 
Beneficiaries
    Under paragraph (a)(1)(ii) of 2012 final regulations, a group 
health plan (including the plan administrator), and a health insurance 
issuer offering group health insurance coverage, must provide an SBC to 
a participant or beneficiary \10\ with respect to each benefit package 
offered by the plan or issuer for which the participant or beneficiary 
is eligible.\11\ The December 2014 proposed regulations clarified that 
if the plan or issuer provides the SBC prior to application for 
coverage, the plan or issuer is not required to automatically provide 
another SBC upon application, if there is no change to the information 
required to be in the SBC. If there is any change to the information 
required to be in the SBC by the time the application is filed, the 
plan or issuer must update and provide a current SBC as soon as 
practicable following receipt of the application, but in no event later 
than seven business days following receipt of the application.
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    \10\ ERISA section 3(7) defines a participant as: any employee 
or former employee of an employer, or any member or former member of 
an employee organization, who is or may become eligible to receive a 
benefit of any type from an employee benefit plan which covers 
employees of such employers or members of such organization, or 
whose beneficiaries may be eligible to receive any such benefit. 
ERISA section 3(8) defines a beneficiary as: a person designated by 
a participant, or by the terms of an employee benefit plan, who is 
or may become entitled to a benefit thereunder.
    \11\ With respect to insured group health plan coverage, PHS Act 
section 2715 generally places the obligation to provide an SBC on 
both the group health plan and health insurance issuer. As discussed 
below, under section III.A.1.d., ``Special Rules to Prevent 
Unnecessary Duplication with Respect to Group Health Coverage'', if 
either the issuer or the plan provides the SBC, both will have 
satisfied their obligations. As they do with other notices required 
of both plans and issuers under part 7 of ERISA, title XXVII of the 
PHS Act, and Chapter 100 of the Code, the Departments expect plans 
and issuers to make contractual arrangements for sending SBCs. 
Accordingly, the remainder of this preamble generally refers to 
requirements for plans or issuers.
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    The comments the Departments received on this proposal generally 
supported adopting the language of the proposed regulations, which 
incorporates this clarification of the 2012 final regulations. 
Therefore, these final regulations provide that if an SBC was provided 
upon request before application, the requirement to provide the SBC 
upon application is deemed satisfied, provided there is no change to 
the information required to be in the SBC. However, if there has been a 
change in the information required to be in the SBC, a new SBC that 
includes the updated information must be provided as soon as 
practicable following receipt of the application, but in no event later 
than seven business days following receipt of the application.
    Under the 2012 final regulations, if there is any change to the 
information required to be in the SBC that was provided upon 
application and before the first day of coverage, the plan or issuer 
must update and provide a current SBC to a participant or beneficiary 
no later than the first day of coverage. The December 2014 proposed 
regulations addressed how to satisfy the requirement to provide an SBC 
when the terms of coverage are not finalized.

[[Page 34295]]

Those proposed regulations proposed that if the plan sponsor is 
negotiating coverage terms after an application has been filed and the 
information required to be in the SBC changes, the plan or issuer is 
not required to provide an updated SBC (unless an updated SBC is 
requested) until the first day of coverage. The updated SBC would be 
required to reflect the final coverage terms under the policy, 
certificate, or contract of insurance that was purchased. The 
Departments did not receive comments relating to this provision, and, 
therefore, these final regulations finalize the language of the 
proposed regulations without change.
    Under the 2012 final regulations, the plan or issuer must also 
provide the SBC to individuals enrolling through a special enrollment 
period, also called special enrollees.\12\ Special enrollees must be 
provided with an SBC no later than when a summary plan description is 
required to be provided under the timeframe set forth in ERISA section 
104(b)(1)(A) and its implementing regulations, which is 90 days from 
enrollment.
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    \12\ See special enrollment regulations published at 26 CFR 
54.9801-6, 29 CFR 2590.701-6, and 45 CFR 146.117.
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    The December 2014 proposed regulations followed the approach of the 
2012 final rules with respect to this requirement and did not include a 
proposed change. The proposed regulations provided that, to the extent 
individuals who are eligible for special enrollment would like to 
receive SBCs earlier than this timeframe, they may request an SBC with 
respect to any particular plan, policy, or benefit package and the SBC 
is required to be provided as soon as practicable, but in no event 
later than seven business days following receipt of the request. The 
Departments received several comments relating to the timeframe. While 
some commenters supported the existing requirement, other commenters 
stated that the Departments should require plans and issuers to provide 
the SBC to special enrollees upon enrollment or by the first day of 
coverage. Some commenters stated that rules should require plans and 
issuers to treat special enrollees the same as applicants for coverage, 
which would require provision of the SBC as soon as practicable 
following receipt of an application, but in no event later than seven 
business days following receipt of the application.
    The Departments recognize the importance of special enrollees 
having information about a plan, policy, or benefit package for which 
they are eligible; however, special enrollees have the opportunity to 
obtain this information by requesting the SBC. Accordingly, these 
regulations retain the provision of the proposed regulations regarding 
special enrollees without change. To the extent that individuals who 
are eligible for special enrollment and are contemplating their 
coverage options would like to receive SBCs earlier, they may always 
request an SBC with respect to any particular plan, policy, or benefit 
package, and the SBC is required to be provided as soon as practicable, 
but in no event later than seven business days following receipt of the 
request. Therefore, these final regulations continue to provide that 
the plan or issuer must provide the SBC to individuals enrolling 
through a special enrollment period, also called special enrollees, no 
later than when a summary plan description is required to be provided 
under the timeframe set forth in ERISA section 104(b)(1)(A) and its 
implementing regulations, which is 90 days from enrollment.

B. Special Rules To Prevent Unnecessary Duplication With Respect to 
Group Health Coverage

    Paragraph (a)(1)(iii) of the 2012 final regulations sets forth 
three special rules to streamline provision of the SBC and avoid 
unnecessary duplication with respect to group health coverage. In 
addition to retaining these three existing special rules, the 
Departments proposed adding two additional provisions, and codifying an 
enforcement safe harbor set forth in a previous FAQ,\13\ to ensure 
participants and beneficiaries receive information while preventing 
unnecessary duplication. The first proposed provision sought to address 
circumstances where an entity required to provide an SBC with respect 
to an individual has entered into a binding contract with another party 
to provide the SBC to the individual. In such a case, the proposed 
regulations stated that the entity would be considered to satisfy the 
requirement to provide the SBC with respect to the individual if 
specified conditions are met:
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    \13\ See Affordable Care Act Implementation FAQs Part IX, 
question 10, available at http://www.dol.gov/ebsa/faqs/faq-aca9.html 
and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs9.html.
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    (1) The entity monitors performance under the contract; \14\
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    \14\ The selection and monitoring of service providers for a 
group health plan, including parties assuming responsibility to 
complete, provide information for, or deliver SBCs, is a fiduciary 
act subject to prudence and loyalty duties and prohibited 
transaction provisions of ERISA. No single fiduciary procedure will 
be appropriate in all cases; the procedure for selecting and 
monitoring service providers may vary in accordance with the nature 
of the plan and other facts and circumstances relevant to the choice 
of the service provider. More general information on hiring and 
monitoring service providers is contained in the Department of Labor 
publication ``Understanding Your Fiduciary Responsibilities Under a 
Group Health Plan,'' which is available at: www.dol.gov/ebsa/publications/ghpfiduciaryresponsibilities.html.
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    (2) If the entity has knowledge that the SBC is not being provided 
in a manner that satisfies the requirements of this section and the 
entity has all information necessary to correct the noncompliance, the 
entity corrects the noncompliance as soon as practicable; and
    (3) If the entity has knowledge the SBC is not being provided in a 
manner that satisfies the requirements of this section and the entity 
does not have all information necessary to correct the noncompliance, 
the entity communicates with participants and beneficiaries who are 
affected by the noncompliance regarding the noncompliance, and begins 
taking significant steps as soon as practicable to avoid future 
violations.
    In response to this proposal, some commenters expressed concern 
that the proposed approach would permit circumstances where a group 
health plan that contracts with a third party administrator is deemed 
compliant with the requirements, although certain participants and 
beneficiaries under the plan have not received an SBC. On the other 
hand, the Departments received comments recommending the final 
regulations eliminate the requirement to monitor the performance of 
contractors, arguing that it is unnecessary and unduly burdensome.
    In light of all the comments received, the Departments finalize the 
proposed approach without change. The approach set forth by the 
Departments works to achieve the goals of preventing unnecessary 
duplication for plans and issuers, while incorporating safeguards to 
ensure that participants and beneficiaries receive the requisite 
information. The Departments believe that the requirement to monitor 
the performance under the contract is necessary to ensure that 
participants and beneficiaries receive the information to which they 
are entitled. The Departments may provide additional guidance if the 
Departments become aware of situations where participants and 
beneficiaries are not being provided SBCs in accordance with these 
final regulations.
    The second provision proposed by the Departments addressed 
unnecessary duplication with respect to a group health plan that uses 
two or more

[[Page 34296]]

insurance products provided by separate issuers to insure benefits 
under the plan. The Departments recognize that a plan sponsor may 
purchase an insurance product for certain coverage from a particular 
issuer and purchase a separate insurance product or self-insure with 
respect to other coverage (such as outpatient prescription drug 
coverage). In these circumstances, the first issuer may or may not know 
of the existence of other coverage, or whether the plan sponsor has 
arranged the two benefit packages as a single plan or two separate 
plans.
    To address these arrangements, the December 2014 proposed 
regulations proposed that, with respect to a group health plan that 
uses two or more insurance products provided by separate issuers, the 
group health plan administrator is responsible for providing complete 
SBCs with respect to the plan. The group health plan administrator may 
contract with one of its issuers (or other service providers) to 
perform that function. Absent a contract to perform the function, an 
issuer has no obligation to provide coverage information for benefits 
that it does not insure. The comments the Departments received on this 
proposed provision generally supported the approach, and therefore 
these regulations also finalize this rule without change.
    To address concerns regarding unnecessary duplication in situations 
where plans may have benefits provided by more than one issuer, the 
Departments set forth an enforcement safe harbor in an FAQ on May 11, 
2012,\15\ which permitted the provision of multiple partial SBCs if 
certain conditions were satisfied. The Departments extended this 
enforcement safe harbor for one year on April 23, 2013,\16\ and 
indefinitely on May 2, 2014.\17\ The Departments requested comment on 
whether to codify this policy in the final regulations.
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    \15\ Affordable Care Act Implementation FAQs Part IX, question 
10, available at http://www.dol.gov/ebsa/faqs/faq-aca9.html and 
http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs9.html.
    \16\ Affordable Care Act Implementation FAQs Part XIV, question 
5, available at www.dol.gov/ebsa/faqs/faq-aca14.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs14.html.
    \17\ Affordable Care Act FAQ Part XIX, question 8, available at 
www.dol.gov/ebsa/faqs/faq-aca19.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs19.html.
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    Some commenters supported the policy in the enforcement safe harbor 
and either requested the Departments extend the enforcement safe harbor 
or codify it in regulations. Other commenters requested that the 
Departments require plan administrators to synthesize the information 
into a single SBC in order to meet the SBC content requirements when 
two or more insurance products are provided by separate issuers with 
respect to a single group health plan.
    These final regulations codify this enforcement safe harbor, which 
permits a group health plan administrator to synthesize the information 
into a single SBC or provide multiple partial SBCs that, together, 
provide all the relevant information to meet the SBC content 
requirements.

C. Provision of the SBC by an Issuer Offering Individual Market 
Coverage

    Paragraph (a)(1)(iv) of the HHS 2012 final regulations sets forth 
standards applicable to individual health insurance coverage, under 
which the provision of the SBC by an issuer offering individual market 
coverage largely parallels the group market requirements described 
above, with only those changes necessary to reflect the differences 
between the two markets. The rules provide that a health insurance 
issuer offering individual health insurance coverage must provide an 
SBC to an individual or dependent upon receiving an application for any 
health insurance policy as soon as practicable following receipt of the 
application, but in no event later than seven business days following 
receipt of the application.\18\ If there is any change in the 
information required to be in the SBC that was provided upon 
application and before the first day of coverage, the issuer must 
update and provide a current SBC to an individual or dependent no later 
than the first day of coverage.
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    \18\ We clarify for issuers participating in an Exchange for the 
individual market, an issuer's obligation to provide the SBC upon 
``application'' is triggered by the issuer's receipt of notice from 
the Exchange of the individual's plan selection, rather than the 
Exchange's receipt of the individual's eligibility application.
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    The December 2014 proposed regulations proposed to clarify when the 
issuer must provide the SBC again if the issuer already provided the 
SBC prior to application. HHS proposed that if the issuer provides the 
SBC prior to application for coverage, the issuer is not required to 
automatically provide another SBC upon application, if there is no 
change to the information required to be in the SBC. If there is any 
change to the information required to be in the SBC that was provided 
prior to application for coverage by the time the application is filed, 
the issuer must update and provide a current SBC to the same individual 
or dependent as soon as practicable following receipt of the 
application, but in no event later than seven business days following 
receipt of the application.
    The comments received on this proposal generally supported adopting 
the language of the proposed regulation. Therefore, these final 
regulations provide that if an SBC was provided upon request before 
application, the requirement to provide the SBC upon application is 
deemed satisfied, provided there is no change to the information 
required to be in the SBC. However, if there has been a change in the 
information that is required to be in the SBC, a new SBC that includes 
the changed information must be provided as soon as practicable 
following receipt of the application, but in no event later than seven 
business days following receipt of the application.
    HHS also proposed to address situations where an issuer offering 
individual market insurance coverage, consistent with applicable 
Federal and State law, automatically reenrolls an individual and any 
dependents into a different plan or product than the plan in which 
these individuals were previously enrolled. If the issuer automatically 
re-enrolls an individual covered under a policy, certificate, or 
contract of insurance (including every dependent) into a policy, 
certificate, or contract of insurance under a different plan or 
product, HHS proposed that the issuer would be required to provide an 
SBC with respect to the coverage in which the individual (including 
every dependent) will be enrolled, consistent with the timing 
requirements that apply when the policy is renewed or reissued. The 
comments received regarding this proposal supported this proposed 
approach. Therefore, these final regulations finalize the proposed 
approach without change.

D. Special Rules To Prevent Unnecessary Duplication With Respect to 
Individual Health Insurance Coverage

    Student health insurance coverage is a type of individual health 
insurance coverage provided pursuant to a written agreement between an 
institution of higher education and a health insurance issuer to 
students enrolled in that institution of higher education, and their 
dependents, that meet certain specified conditions.\19\ The December 
2014 proposed regulations proposed to extend an anti-duplication rule 
similar to that provided with respect to group health coverage to 
student health

[[Page 34297]]

insurance coverage. HHS proposed that the requirement to provide an SBC 
with respect to an individual would be considered satisfied for an 
entity (such as an institution of higher education) if another party 
(such as a health insurance issuer) provides a timely and complete SBC 
to the individual. HHS solicited comments on whether or not a 
requirement to monitor the provisioning of the SBC in this circumstance 
should be added.
---------------------------------------------------------------------------

    \19\ See 45 CFR 147.145, published at 77 FR 16453 (March 21, 
2012).
---------------------------------------------------------------------------

    The comments received generally supported this proposal. Most of 
the commenters supported requiring the entity that is contracting the 
provisioning of the SBC to a different entity to monitor the contract 
to ensure individuals receive an SBC. However, a few commenters stated 
that such a requirement would be unnecessary and unduly burdensome.
    Considering the comments received, these final regulations adopt an 
anti-duplication provision with respect to providing SBCs for student 
health insurance coverage, with the addition of a duty to monitor that 
parallels the duty to monitor that is being finalized with respect to 
the anti-duplication rule for group health plans. HHS believes that the 
requirement to monitor the performance under the contract is necessary 
to ensure that individuals receive the information to which they are 
entitled. HHS may provide additional guidance if the Departments become 
aware of situations where individuals are not being provided SBCs in 
accordance with these final regulations.

E. Content

    PHS Act section 2715(b)(3) generally provides that the SBC must 
include nine statutory content elements. The 2012 final regulations 
added three content elements: (1) for plans and issuers that maintain 
one or more networks of providers, an Internet address (or similar 
contact information) for obtaining a list of the network providers; (2) 
for plans and issuers that use a formulary in providing prescription 
drug coverage, an Internet address (or similar contact information) for 
obtaining information on prescription drug coverage under the plan or 
coverage; and (3) an Internet address for obtaining the uniform 
glossary, as well as a contact phone number to obtain a paper copy of 
the uniform glossary, and a disclosure that paper copies of the uniform 
glossary are available.
1. Minimum Essential Coverage and Minimum Value Statement
    One of the statutory content elements is a statement of whether the 
plan or coverage provides minimum essential coverage (MEC) as defined 
under section 5000A(f) of the Code, and whether the plan's or 
coverage's share of the total allowed costs of benefits provided under 
the plan or coverage is not less than 60% of those costs. In April 
2013, the Departments issued an updated SBC template (and sample 
completed SBC) with the addition of statements regarding whether the 
plan or coverage provides MEC (as defined under section 5000A(f) of the 
Code) and whether the plan or coverage meets the minimum value (MV) 
requirements.\20\ In Affordable Care Act Implementation FAQs Part XIV, 
issued contemporaneously with the updated SBC template in April 2013, 
the Departments stated that this language is required to be included in 
SBCs provided with respect to coverage beginning on or after January 1, 
2014.\21\
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    \20\ See Affordable Care Act Implementation FAQs Part XIV, 
question 1, available at www.dol.gov/ebsa/faqs/faq-aca14.html and 
http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs14.html.
    \21\ The guidance with respect to statements regarding MEC and 
MV was originally issued for SBCs provided with respect to coverage 
beginning on or after January 1, 2014, and before January 1, 2015 
(referred to as the ``second year of applicability''). See 
Affordable Care Act Implementation FAQs Part XIV, question 1, 
available at www.dol.gov/ebsa/faqs/faq-aca14.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs14.html. This guidance was extended to be 
applicable until further guidance was issued. See Affordable Care 
Act Implementation FAQs Part XIX, question 7, available at 
www.dol.gov/ebsa/faqs/faq-aca19.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs19.html
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    The Departments also stated in Affordable Care Act Implementation 
FAQs Part XIV that if a plan or issuer was unable to modify the SBC 
template for these disclosures, the Departments would not take any 
enforcement action against a plan or issuer for using the original 
template authorized at the time the 2012 final regulations were issued, 
provided that the SBC was furnished with a cover letter or similar 
disclosure stating whether the plan or coverage does or does not 
provide MEC and whether the plan's or coverage's share of the total 
allowed costs of benefits provided under the plan or coverage does or 
does not meet the MV standard under the Affordable Care Act.\22\ As 
stated in the FAQ issued on March 30, 2015, the Departments anticipate 
finalizing the new template and associated documents by January 2016. 
Therefore, until the new template and associated documents are 
finalized and applicable, plans and issuers may continue to rely on the 
flexibility provided in Affordable Care Act Implementation FAQs Part 
XIV \23\ and the Departments will not take enforcement action against a 
plan or issuer that provides an SBC with a cover letter or similar 
disclosure with the required MEC and MV statements.\24\
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    \22\ See Affordable Care Act Implementation FAQs Part XIV, 
question 2, available at www.dol.gov/ebsa/faqs/faq-aca14.html and 
http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs14.html.
    \23\ Affordable Care Act Implementation FAQs Part XIV, question 
2, available at www.dol.gov/ebsa/faqs/faq-aca14.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs14.html.
    \24\ HHS also notes that until the new template and associated 
documents are finalized and applicable, it will not take enforcement 
action against an individual market issuer for omitting such a 
statement for minimum value, which is not relevant with respect to 
individual market coverage.
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2. QHP and Abortion Services
    Under section 1303(b)(3)(A) of the Affordable Care Act and 
implementing regulations at 45 CFR 156.280(f), a Qualified Health Plan 
(QHP) issuer that elects to offer a QHP that provides coverage of 
abortion services for which federal funding is prohibited (non-excepted 
abortion services) must provide a notice to enrollees, as part of the 
SBC provided at the time of enrollment, of coverage of such services.
    The December 2014 proposed regulations proposed to require issuers 
of QHPs sold through an individual market Exchange to disclose on the 
SBC these QHPs whether abortion services are covered or excluded, and 
whether coverage is limited to services for which federal funding is 
allowed (excepted abortion services). Several commenters supported this 
proposal. Some commenters recommended that the requirement to disclose 
coverage or exclusion of abortion services be expanded to all plans and 
issuers offering coverage in all markets, not only issuers of QHPs in 
the individual market. Finally, some commenters recommended limiting 
the required disclosure to only a QHP issuer that offers a QHP 
providing coverage of non-excepted abortion services.
    After consideration of all the comments regarding this proposal, 
these final regulations adopt the proposed approach without change. 
These final regulations require that QHP issuers must disclose on the 
SBC for QHPs sold through an individual market Exchange whether 
abortion services are covered or excluded, and whether coverage is 
limited to excepted abortion services.

[[Page 34298]]

HHS feels that this level of transparency is important to facilitate 
comparisons across individual market QHPs, and to avoid confusion 
regarding which abortion services are or are not covered.
    The December 2014 proposed regulations were published 
contemporaneously with proposed updates to the SBC template, 
instructions, and associated documents. The proposed updates to the SBC 
template instructions and associated documents included guidance for 
QHP issuers regarding the wording and placement of the abortion 
disclosure requirement on the SBC. We received numerous comments 
regarding the proposed language for the disclosure, as well as the 
placement of the disclosure on the SBC template. As previously stated, 
the Departments anticipate finalizing the new template and associated 
documents, separately from this final rule, by January 2016. HHS will 
consider and address the comments regarding the wording and placement 
of the disclosure in finalizing the new template and associated 
documents. HHS acknowledges that QHP issuers will not have final 
guidance regarding the specific wording and placement of this 
disclosure until the template, instructions, and associated documents 
are finalized. Therefore, until the new template and associated 
documents are finalized and applicable, individual market QHP issuers 
may adopt any reasonable wording and placement of the disclosure on the 
SBC. Individual market QHP issuers may also provide the disclosure in a 
cover letter or other similar disclosure provided with the SBC. 
Consistent with the effective dates described in section K of this 
final rule, this requirement is applicable for individual market QHP 
issuers for SBCs issued in connection with coverage that begins on or 
after January 1, 2016.
    For Multi-State Plan issuers, the Office of Personnel Management 
will issue guidance about the wording and placement of the abortion 
disclosure requirement on the SBC.
3. Contact Information for Questions
    The statute provides that the SBC must include ``a contact number 
for the consumer to call with additional questions and an Internet web 
address where a copy of the actual individual coverage policy or group 
certificate of coverage can be reviewed and obtained.'' The 2012 final 
regulations state that the SBC must include ``contact information for 
questions and obtaining a copy of the plan document or the insurance 
policy, certificate, or contract of insurance (such as a telephone 
number for customer service and an Internet address for obtaining a 
copy of the plan document or the insurance policy, certificate, or 
contract of insurance).'' These final regulations clarify that all 
plans and issuers must include on the SBC contact information for 
questions.
4. Internet Address To Obtain the Actual Individual Underlying Policy 
or Group Certificate
    Questions have arisen as to whether PHS Act section 2715(b)(3)(i) 
(which requires that an SBC include ``. . . an Internet web address 
where a copy of the actual individual coverage policy or group 
certificate of coverage can be reviewed and obtained'') and associated 
regulations require that all plans and issuers must post underlying 
plan documents automatically on an Internet Web site. Some commenters 
stated that plans and issuers should be required to post actual policy 
and underlying plan documents as well as direct links to the plan's 
prescription drug formulary. Other commenters stated that the 
Departments should permit plan sponsors to decide whether the 
underlying plan documents are posted online. Others stated that 
mandating self-insured group health plans to post underlying plan 
information online is redundant and burdensome.
    The statutory language regarding this requirement refers 
specifically to an ``individual coverage policy'' and ``group 
certificate of coverage.'' This statutory provision does not reference 
group health plan coverage that provides benefits on a self-insured 
basis. While the Departments recognize that such information may be 
useful to consumers, based on the statutory language, the Departments 
may only require issuers to post the underlying individual coverage 
policy or group certificate of coverage to an Internet address. 
Accordingly, these final regulations provide that issuers must also 
include an Internet web address where a copy of the actual individual 
coverage policy or group certificate of coverage can be reviewed and 
obtained. The Departments note that these final regulations require 
these documents to be easily available to individuals, plan sponsors, 
and participants and beneficiaries shopping for coverage prior to 
submitting an application for coverage. For the group market only, 
because the actual ``certificate of coverage'' is not available until 
after the plan sponsor has negotiated the terms of coverage with the 
issuer, an issuer is permitted to satisfy this requirement with respect 
to plan sponsors that are shopping for coverage by posting a sample 
group certificate of coverage for each applicable product. After the 
actual certificate of coverage is executed, it must be easily available 
to plan sponsors and participants and beneficiaries via an Internet web 
address.
    The Departments note that nothing in this section prohibits issuers 
and group health plan sponsors from making additional underlying group 
health plan or policy documents more readily available to participants 
and beneficiaries, including by posting them on the internet. HHS 
encourages issuers to make all relevant policy documents easily 
accessible to individuals shopping for, and enrolled in, coverage to 
facilitate comparison of policy options and understanding of benefits 
available under a particular plan or policy.
    The Departments also note that, separate from the SBC requirement, 
provisions of other applicable laws require disclosure of plan 
documents and other instruments governing the plan. For example, ERISA 
section 104 and the Department of Labor's implementing regulations \25\ 
provide that, for plans subject to ERISA, the plan documents and other 
instruments under which the plan is established or operated must 
generally be furnished by the plan administrator to plan participants 
\26\ upon request. In addition, the Department of Labor's claims 
procedure regulations (applicable to ERISA plans), as well as the 
Departments' claims and appeals regulations under the Affordable Care 
Act (applicable to all non-grandfathered group health plans and health 
insurance issuers in the group and individual markets),\27\ set forth 
rules regarding claims and appeals, including the right of claimants 
(or their authorized representatives) upon appeal of an adverse benefit 
determination (or a final internal adverse benefit determination) to be 
provided by the plan or issuer, upon request and free of charge, 
reasonable access to and copies of all documents, records, and other 
information relevant to the claimant's

[[Page 34299]]

claim for benefits. Plans and issuers must continue to comply with 
these provisions and any other applicable laws.
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    \25\ 29 CFR 2520.104b-1.
    \26\ ERISA section 3(7) defines a ``participant'' to include any 
employee or former employee who is or may become eligible to receive 
a benefit of any type from an employee benefit plan or whose 
beneficiaries may be eligible to receive any such benefit. 
Accordingly, employees who are not enrolled but are, for example, in 
a waiting period for coverage, or who are otherwise shopping amongst 
benefit package options at open season, generally are considered 
plan participants for this purpose.
    \27\ 29 CFR 2560.503-1. See also 29 CFR 2590.715-2719(b)(2)(i) 
and 45 CFR 147.136(b)(2)(i), requiring nongrandfathered plans and 
issuers to incorporate the internal claims and appeals processes set 
forth in 29 CFR 2560.503-1.
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F. Appearance

    PHS Act section 2715 sets forth standards related to the appearance 
and language of the SBC. Specifically, the SBC is to be presented in a 
culturally and linguistically appropriate manner utilizing terminology 
understandable by the average plan enrollee, in a uniform format that 
does not exceed four double-sided pages in length, and does not include 
print smaller than 12-point font. Plans and issuers have informed the 
Departments that they are concerned about including all of the required 
information in the SBC while also satisfying the limitation on the 
length of the document of four double-sided pages. Comments were 
invited on potential ways to reconcile the statutory page limit with 
the statutory content, appearance, and format requirements, 
particularly the need for the summary to present information in an 
understandable, accurate, and meaningful way that facilitates 
comparisons of health options, including those that have disparate and 
comparatively complex features. Specifically, the Departments invited 
comments on the sorts of plans that have difficulty meeting the 
statutory limit, and what other sorts of accommodations may be 
appropriate for those plans.
    Some commenters expressed concern regarding the difficulty of 
complying with the statutory page limit. One commenter stated that it 
is difficult to provide customers with clear and accurate information 
while describing the benefits provided under certain complex plan 
designs. As discussed above, the statute requires that the SBC not 
exceed four pages, and these final regulations retain the 
interpretation set forth in the 2012 final regulations that the SBC can 
be four double-sided pages. The Departments will address specific 
issues related to completing the four-page template, as well as the 
issues plans and issuers encounter meeting these requirements with the 
finalization of the new template and associated documents, separate 
from this final rule.

G. Form

1. Group Health Plan Coverage
    To facilitate faster and less burdensome disclosure of the SBC and 
to be consistent with PHS Act section 2715(d)(2), which permits 
disclosure in either paper or electronic form, the 2012 final 
regulations set forth rules to permit greater use of electronic 
transmittal of the SBC. For SBCs provided electronically by a plan or 
issuer to participants and beneficiaries, the 2012 final regulations 
make a distinction between a participant or beneficiary who is already 
covered under the group health plan and a participant or beneficiary 
who is eligible for coverage but not enrolled in a group health plan. 
For participants and beneficiaries who are already covered under the 
group health plan, the 2012 final regulations permit provision of the 
SBC electronically, if the requirements of the Department of Labor's 
regulations at 29 CFR 2520.104b-1 are met. Paragraph (c) of those 
regulations includes an electronic disclosure safe harbor.\28\ For 
participants and beneficiaries who are eligible for but not enrolled in 
coverage, the 2012 final regulations permit the SBC to be provided 
electronically, if the format is readily accessible \29\ and a paper 
copy is provided free of charge upon request. Additionally, to reduce 
paper copies that may be unnecessary, if the electronic form is an 
Internet posting, the plan or issuer must timely advise the individual 
in paper form (such as a postcard) or email that the documents are 
available on the Internet, provide the Internet address, and notify the 
individual that the documents are available in paper form upon request. 
The Departments note that the rules for participants and beneficiaries 
who are eligible for but not enrolled in coverage are substantially 
similar to the requirements for an issuer providing an electronic SBC 
to a group health plan (or its sponsor) under paragraph (a)(4)(i) of 
the regulations. Finally, plans, and participants and beneficiaries 
(both those covered and those eligible but not enrolled), have the 
right to receive an SBC in paper form, free of charge, upon request.
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    \28\ On April 7, 2011, the Department of Labor published a 
Request for Information regarding electronic disclosure at 76 FR 
19285. In it, the Department of Labor stated that it is reviewing 
the use of electronic media by employee benefit plans to furnish 
information to participants and beneficiaries covered by employee 
benefit plans subject to ERISA. Because these SBC regulations adopt 
the ERISA electronic disclosure rules by cross-reference, any 
changes that may be made to 29 CFR 2520.104b-1 in the future would 
also apply to the SBC.
    \29\ The Departments note that our use of the phrase ``readily 
accessible'' in this context is not intended to connote terms of 
art, such as ``reasonable accommodation,'' ``readily achievable,'' 
and ``accessible,'' as used in connection with the determination of 
legal requirements with regard to disability.
---------------------------------------------------------------------------

    In Affordable Care Act Implementation FAQs Part IX, question 1, the 
Departments adopted an additional safe harbor related to electronic 
delivery of SBCs.\30\ In the December 2014 proposed regulations, the 
Departments proposed to codify this safe harbor through rulemaking. 
Commenters generally supported permitting electronic delivery of SBCs. 
Some commenters requested the Departments adopt the safe harbor 
outlined in the FAQ. Other commenters recommended adopting the safe 
harbor standard for all individuals receiving the SBC without making 
any distinction as to whether the individual is already enrolled in the 
plan.
---------------------------------------------------------------------------

    \30\ See Affordable Care Act Implementation FAQs Part IX, 
question 4, available at http://www.dol.gov/ebsa/faqs/faq-aca9.html 
and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs9.html.
---------------------------------------------------------------------------

    These final regulations adopt the safe harbor for electronic 
delivery set forth in the FAQ without expanding the application of the 
safe harbor to all individuals entitled to receive the SBC. The 
Departments note that these rules provide a mechanism by which all SBCs 
may be provided electronically. The Departments believe that the 
approach set forth in the FAQ achieves an appropriate balance between 
ensuring participants and beneficiaries receive the necessary 
information, while allowing plans and issuers to provide such 
information electronically. Thus, SBCs may be provided electronically 
to participants and beneficiaries in connection with their online 
enrollment or online renewal of coverage under the plan. SBCs also may 
be provided electronically to participants and beneficiaries who 
request an SBC online. In either case, the individual must have the 
option to receive a paper copy upon request.
2. Individual Health Insurance Coverage and Self-insured Non-Federal 
Governmental Plans
    The HHS 2012 final regulations established a provision under 
paragraph (a)(4)(iii)(C) that deems health insurance issuers in the 
individual market to be in compliance with the requirement to provide 
the SBC to an individual requesting summary information about a health 
insurance product prior to submitting an application for coverage if 
the issuer provides the content required under paragraph (a)(2) of the 
regulations to the federal health reform Web portal described in 45 CFR 
159.120. Issuers must submit all of the content required under 
paragraph (a)(2), as specified in guidance by the Secretary, to be 
deemed compliant with the requirement to provide an SBC to an 
individual requesting summary information prior to submitting an 
application for coverage. HHS intends to continue to

[[Page 34300]]

facilitate the operation of this deemed compliance option for 
individual market issuers. An issuer must provide all SBCs other than 
the ``shopper'' SBC contemplated in the deemed compliance provision as 
required under the 2012 final regulations (and any future final 
regulations), including providing the SBC at the time of application 
and renewal.
    The Departments note that, consistent with the 2012 final 
regulations, an issuer in the individual market must provide the SBC in 
a manner that can reasonably be expected to provide actual notice 
regardless of the format. An issuer in the individual market satisfies 
the form requirements set forth in the 2012 final regulations if it 
does at least one of the following: (1) Hand-delivers a paper copy of 
the SBC to the individual or dependent; (2) mails a paper copy of the 
SBC to the mailing address provided to the issuer by the individual or 
dependent; (3) provides the SBC by email after obtaining the 
individual's or dependent's agreement to receive the SBC or other 
electronic disclosures by email; (4) posts the SBC on the Internet and 
advises the individual or dependent in paper or electronic form, in a 
manner compliant with 45 CFR 147.200(a)(4)(iii)(A)(1) through (3), that 
the SBC is available on the Internet and includes the applicable 
Internet address; or (5) provides the SBC by any other method that can 
reasonably be expected to provide actual notice.
    The 2012 final regulations also provide that the obligation to 
provide an SBC cannot be satisfied electronically in the individual 
market unless: The format is readily accessible; the SBC is displayed 
in a location that is prominent and readily accessible; the SBC is 
provided in an electronic form that can be electronically retained and 
printed; the SBC is consistent with the appearance, content, and 
language requirements; and the issuer notifies the individual that a 
paper SBC is available upon request without charge.\31\
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    \31\ We clarify that an issuer's posting of the SBC on its Web 
site is not sufficient by itself; paragraph (a)(4)(iii) of the 2012 
final regulations requires the SBC to be provided in a manner that 
can reasonably be expected to provide actual notice in paper or 
electronic form.
---------------------------------------------------------------------------

    The December 2014 proposed regulations proposed to clarify the form 
and manner for SBCs provided by a self-insured non-Federal governmental 
plan. Under the proposal, such SBCs could be provided in paper form. 
Alternatively, such SBCs could be provided electronically if the plan 
conforms to either the substance of the provisions applicable to ERISA 
plans (in paragraph (a)(4)(ii) of the regulations) or to individual 
health insurance coverage (in paragraph (a)(4)(iii) of the 
regulations).
    The Departments did not receive any comments regarding this 
proposal. Therefore, the Departments are finalizing the proposal 
without change, to allow for self-insured non-Federal governmental 
plans to provide an SBC in either paper form, or electronically if the 
plan conforms to either the substance of the provisions applicable to 
ERISA plans (in paragraph (a)(4)(ii) of the regulations) or to 
individual health insurance coverage (in paragraph (a)(4)(iii) of the 
regulations).

H. Language

    PHS Act section 2715(b)(2) provides that standards shall ensure 
that the SBC ``is presented in a culturally and linguistically 
appropriate manner.'' The 2012 final regulations provide that a plan or 
issuer for this purpose is considered to provide the SBC in a 
culturally and linguistically appropriate manner if the thresholds and 
standards of 45 CFR 147.136(e), implementing standards for the form and 
manner of notices related to internal claims appeals and external 
review, are met as applied to the SBC.\32\
---------------------------------------------------------------------------

    \32\ See 75 FR 43330 (July 23, 2010), as amended by 76 FR 37208 
(June 24, 2011). Guidance on the HHS Web site contains a list of the 
counties that meet this threshold. This information is available at 
http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/2009-13-CLAS-County-Data_12-05-14_clean_508.pdf.
---------------------------------------------------------------------------

    To help plans and issuers meet the language requirements of 
paragraph (a)(5) of the 2012 final regulations, as requested by 
commenters, HHS provided written translations of the SBC template, 
sample language, and the uniform glossary in Chinese, Navajo, Spanish, 
and Tagalog (the four languages with populations meeting the thresholds 
outlined in 45 CFR 147.136(e)).\33\ HHS may also make these materials 
available in other languages to facilitate voluntary distribution of 
SBCs to other individuals with limited English proficiency. The 
Departments requested comment on this standard, and on other potential 
standards that could facilitate consistency across the Departments' 
programs.
---------------------------------------------------------------------------

    \33\ Translations are available at http://cciio.cms.gov/programs/consumer/summaryandglossary/index.html.
---------------------------------------------------------------------------

    Some commenters requested an additional standard that would require 
the translation of the SBC into any language spoken by 500 individuals 
or 5 percent of individuals in the plan's service area or an employer's 
workforce, whichever is less, and to include taglines in at least 15 
languages on all SBCs that indicate the availability of translated SBCs 
and oral language services. Some commenters were concerned that the 10 
percent standard for language and translation services is insufficient 
to present the SBC in a culturally and linguistically appropriate 
manner and cited different Federal standards for other disclosures. 
Other commenters supported the existing requirement from the 2012 final 
regulations or stated that the prevalence of speakers of a language in 
a particular state is the best criteria for identifying which language 
services should be provided.
    The Departments believe that it is important to provide SBCs in a 
culturally and linguistically appropriate manner to ensure that 
individuals get the important information needed to properly evaluate 
coverage options. The standard established under the 2012 final 
regulations addresses the need to provide language services to ensure 
that consumers receive SBCs in an understandable format while balancing 
that need with the goal of keeping administrative costs down. 
Additionally, a rule based on a particular number or percentage of a 
plan's population, rather than a county's population, may increase 
administrative costs and make it difficult for plans and issuers to 
provide SBCs that comply with the page limitations. Therefore, these 
final rules continue to provide that a plan or issuer is considered to 
provide the SBC in a culturally and linguistically appropriate manner 
if the thresholds and standards of 45 CFR 147.136(e), implementing 
standards for the form and manner of notices related to internal claims 
appeals and external review, are met as applied to the 
SBC.34 35
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    \34\ See 75 FR 43330 (July 23, 2010), as amended by 76 FR 37208 
(June 24, 2011).
    \35\ Nothing in these regulations should be construed as 
limiting an individual's rights under other Federal authorities 
applicable to recipients of Federal financial assistance, such as 
Section 504 of the Rehabilitation Act of 1973, which includes 
effective communication requirements for individuals with 
disabilities, and Title VI of the Civil Rights Act of 1964, which 
includes language assistance requirements for individuals with 
limited English proficiency.
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I. Process for Imposition of Fine in the Case of Willful Violation

    In general, PHS Act section 2715(f) provides that a group health 
plan (including its administrator), and a health insurance issuer 
offering group or individual health insurance coverage, that willfully 
fails to provide the information required under this section are 
subject to a fine. In the December 2014 proposed regulations, the 
Department of Labor proposed that it will use the same process and

[[Page 34301]]

procedures for assessment of the civil fine as used for failure to file 
an annual report under 29 CFR 2560.502c-2 and 29 CFR part 2570, subpart 
C. In accordance with ERISA section 502(b)(3), 29 U.S.C. 1132(b)(3), 
the Secretary of Labor is not authorized to assess this fine against a 
health insurance issuer. Moreover, the IRS proposed to clarify that the 
IRS will enforce this section using a process and procedure consistent 
with section 4980D of the Code. The Departments did not receive 
comments on this proposal to utilize existing processes and procedures 
under ERISA and the Code and therefore finalize these proposals without 
change.

J. Applicability

    In August 2012, the Departments issued FAQs \36\ that provided a 
temporary nonenforcement policy with respect to group health plans 
providing Medicare Advantage benefits, which are Medicare benefits 
financed by the Medicare Trust Funds, for which the benefits are set by 
Congress and regulated by the Centers for Medicare & Medicaid Services. 
The December 2014 proposed regulations proposed to add language to 
codify this temporary relief and exempt from the SBC requirements a 
group health plan benefit package that provides Medicare Advantage 
benefits. Medicare Advantage benefits are not health insurance 
coverage, and Medicare Advantage organizations are not required to 
provide an SBC with respect to such benefits. Additionally, there are 
separately required disclosures required to be provided by Medicare 
Advantage organizations to ensure that enrollees in these plans receive 
the necessary information about their coverage and benefits.
---------------------------------------------------------------------------

    \36\ See Affordable Care Act Implementation FAQs Part X, 
question 1, available at http://www.dol.gov/ebsa/faqs/faq-aca10.html 
and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs10.html.
---------------------------------------------------------------------------

    The Departments did not receive comments opposing the proposal to 
exempt group health plans providing Medicare Advantage benefits from 
the SBC requirements. Therefore, these final regulations finalize 
without change the proposal to codify the relief and exempt from the 
SBC requirements a group health plan benefit package that provides 
Medicare Advantage benefits.
    In May 2012, the Departments issued FAQs addressing insurance 
products that are no longer being offered for purchase (``closed blocks 
of business''). The Departments had provided temporary enforcement 
relief through an FAQ provided that certain conditions were met: (1) 
The insurance product is no longer being actively marketed; (2) the 
health insurance issuer stopped actively marketing the product prior to 
September 23, 2012, when the requirement to provide an SBC was first 
applicable to health insurance issuers; and (3) the health insurance 
issuer has never provided an SBC with respect to such product.\37\ The 
Departments reiterated that relief in the December 2014 proposed 
regulations, and we do so again in these final regulations. But, we 
again note that if an insurance product was actively marketed for 
business on or after September 23, 2012, and is no longer being 
actively marketed for business, or if the plan or issuer ever provided 
an SBC in connection with the product, the plan and issuer must provide 
the SBC with respect to such coverage, as required by PHS Act section 
2715 and these final regulations.
---------------------------------------------------------------------------

    \37\ See Affordable Care Act Implementation FAQs Part IX, 
question 12, available at http://www.dol.gov/ebsa/faqs/faq-aca9.html 
and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs9.html.
---------------------------------------------------------------------------

K. Applicability Date

    The December 2014 proposed regulations proposed that these rules, 
if finalized, would apply for disclosures with respect to participants 
and beneficiaries who enroll or re-enroll in group health coverage 
through an open enrollment period (including re-enrollees and late 
enrollees) beginning on the first day of the first open enrollment 
period that begins on or after September 1, 2015. With respect to 
disclosures to participants and beneficiaries who enroll in group 
health coverage other than through an open enrollment period (including 
individuals who are newly eligible for coverage and special enrollees), 
the requirements were proposed to apply beginning on the first day of 
the first plan year that begins on or after September 1, 2015. For 
disclosures to plans, and to individuals and dependents in the 
individual market, these requirements were proposed to apply to health 
insurance issuers beginning on September 1, 2015. Comments received 
generally supported these applicability dates, except that a number of 
commenters suggested that the requirements apply with respect to the 
individual market for coverage beginning on or after January 1, 2016. 
These final regulations adopt the applicability dates as proposed, 
except that for disclosures to individuals and dependents in the 
individual market, the requirements apply to health insurance issuers 
with respect to SBCs issued for coverage that begins on or after 
January 1, 2016. Until these final regulations become applicable, plans 
and issuers must continue to comply with the 2012 final regulations, as 
applicable.

III. Economic Impact and Paperwork Burden

A. Executive Orders 12866 and 13563--Departments of Labor and HHS

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects; distributive impacts; and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated a ``significant regulatory 
action'' under section 3(f) of Executive Order 12866. Accordingly, the 
rule has been reviewed by the Office of Management and Budget.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any one 
year). As discussed below, the Departments have concluded that these 
final regulations would not have economic impacts of $100 million or 
more in any one year or otherwise meet the definition of an 
``economically significant rule'' under Executive Order 12866. 
Nonetheless, consistent with Executive Orders 12866 and 13563, the 
Departments have provided an assessment of the potential benefits and 
the costs associated with these final regulations.
    These final regulations are expected to have only small benefits 
and costs as they primarily provide clarifications of the previous 2012 
final regulations and also incorporate into regulations previous 
guidance issued by the Departments that has taken the form of responses 
to frequently asked questions or enforcement safe harbors.\38\ The 
Departments have not been able to quantify these costs and benefits, 
but they are qualitatively discussed below.
---------------------------------------------------------------------------

    \38\ See Affordable Care Act Implementation FAQs Part XXIV 
available at http://www.dol.gov/ebsa/faqs/faq-aca24.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs24.html.
---------------------------------------------------------------------------

    The clarifications would help lower costs as they establish that 
duplicate SBCs do not have to be provided upon application if a 
previous SBC was provided and there have been no changes to the 
required information. The clarification also prevents

[[Page 34302]]

unnecessary duplications for plans and issuers, while incorporating 
safeguards to ensure that participants and beneficiaries (and covered 
individuals and dependents) receive the required information. These 
final regulations also provide flexibility in providing SBCs for the 
situation where a plan has multiple issuers and also adopt the safe 
harbor for electronic delivery previously set forth in an FAQ, thereby 
reducing the cost of delivery.
    These final regulations also require an issuer to provide an 
internet web address where a copy of the actual individual coverage 
policy or group certificate of coverage can be reviewed and obtained. 
The costs associated with this requirement are discussed in the 
Paperwork Reduction Act section below.

B. Paperwork Reduction Act

1. Departments of Labor and the Treasury
    These final rules are not subject to the requirements of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), because these 
final regulations make no changes to the existing collection of 
information as defined in 44 U.S.C. 3502(3).
    Please note that the proposed regulations included an ICR related 
to the revision of the SBC template that has been omitted in these 
final regulations as the Departments intend to utilize consumer testing 
and offer an opportunity for public comment before finalizing revisions 
to the SBC template. An analysis under the PRA will be conducted when 
the SBC template is finalized.
2. Department of Health and Human Services
    These final regulations require health insurance issuers offering 
group and individual health insurance coverage must include in the SBC 
an Internet web address where a copy of the actual individual coverage 
policy or group certificate of coverage can be reviewed and obtained. 
These documents are required to be easily available to individuals, 
plan sponsors, and participants and beneficiaries shopping for coverage 
prior to submitting an application for coverage. With respect to group 
health coverage, because the actual ``certificate of coverage'' is not 
available until after the plan sponsor has negotiated the terms of 
coverage with the issuer, an issuer is permitted to satisfy this 
requirement with respect to plan sponsors that are shopping for 
coverage by posting a sample group certificate of coverage for each 
applicable product. After the actual certificate of coverage is 
executed, it must be easily available to plan sponsors and participants 
and beneficiaries via an Internet web address.
    Some commenters stated that requiring the individual coverage 
policy documents and group certificates of coverage be made available 
by posting to an Internet web address would be unduly burdensome 
because of the requirement to make the documents available to 
individuals and plan sponsors shopping for coverage, but not yet 
enrolled in coverage. The December 2014 proposed regulations estimated 
the burden for this requirement to be de minimis because the documents 
already exist and issuers already have web addresses where the 
materials can be made available. Additionally, HHS understands that 
issuers already frequently make these materials available online to 
individuals, plan sponsors, and participants and beneficiaries after 
enrollment in coverage. These final regulations clarify that these 
documents must be made available online to those shopping for coverage 
prior to enrollment as well. It is not expected that group health 
insurance issuers will be providing access to group certificates of 
coverage prior to execution of the final group certificate of coverage. 
Instead, HHS anticipates and expects that the sample group certificate 
of coverage that underlies the product being marketed and sold, and 
that have been filed with and approved by a state Department of 
Insurance, are what will be provided prior to the execution of the 
actual group certificate of coverage. Based on this HHS still believes 
that the requirement to make these documents available via an Internet 
web address will result in only a de minimis burden on issuers.
    These final regulations make no other revisions to the existing 
collection of information. The December 2014 proposed regulations 
included an ICR related to the revision of the SBC template that has 
been omitted in these final regulations as the Departments intend to 
utilize consumer testing and offer an opportunity for public comment 
before finalizing revisions to the SBC template. An analysis under the 
PRA will be conducted when the SBC template is finalized.
    The Department notes that persons are not required to respond to, 
and generally are not subject to any penalty for failing to comply 
with, an ICR unless the ICR has a valid OMB control number.
    The 2015-2017 paperwork burden estimates are summarized as follows:
    Type of Review: Revision.
    Agency: Department of Health and Human Services.
    Title: Summary of Benefits and Coverage Uniform Glossary
    CMS Identifier (OMB Control Number): CMS-10407 (0938-1146).
    Affected Public: Private sector.
    Total Respondents: 126,500.
    Total Responses: 41,153,858.
    Frequency of Response: On-going.
    Estimated Total Annual Burden Hours (three year average): 322,411 
hours.
    Estimated Total Annual Cost Burden (three year average): 
$7,207,361.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to Federal rules that are subject to 
the notice and comment requirements of section 553(b) of the 
Administrative Procedure Act (5 U.S.C. 551 et seq.) and which are 
likely to have a significant economic impact on a substantial number of 
small entities. Unless the head of an agency certifies that a proposed 
rule is not likely to have a significant economic impact on a 
substantial number of small entities, section 603 of the RFA requires 
that the agency present an initial regulatory flexibility analysis 
(IRFA) describing the rule's impact on small entities and explaining 
how the agency made its decisions with respect to the application of 
the rule to small entities.
    The RFA generally defines a ``small entity'' as (1) a proprietary 
firm meeting the size standards of the Small Business Administration 
(SBA) (13 CFR 121.201) pursuant to the Small Business Act (15 U.S.C. 
631 et seq.), (2) a nonprofit organization that is not dominant in its 
field, or (3) a small government jurisdiction with a population of less 
than 50,000. (States and individuals are not included in the definition 
of ``small entity.'')
    There are several different types of small entities affected by 
these final regulations. For issuers and third party administrators, 
the Departments use as their measure of significant economic impact on 
a substantial number of small entities a change in revenues of more 
than 3 to 5 percent. For plans, the Departments continue to consider a 
small plan to be an employee benefit plan with fewer than 100 
participants.\39\

[[Page 34303]]

Further, while some large employers may have small plans, in general 
small employers maintain most small plans. Thus, the Departments 
believe that assessing the impact of this final rule on small plans is 
an appropriate substitute for evaluating the effect on small entities. 
The definition of small entity considered appropriate for this purpose 
differs, however, from a definition of small business that is based on 
size standards promulgated by the Small Business Administration (SBA) 
(13 CFR 121.201) pursuant to the Small Business Act (15 U.S.C. 631 et 
seq.).
---------------------------------------------------------------------------

    \39\ The basis for this definition is found in section 104(a)(2) 
of ERISA, which permits the Secretary of Labor to prescribe 
simplified annual reports for pension plans that cover fewer than 
100 participants.
---------------------------------------------------------------------------

    The Departments carefully considered the likely impact of these 
final rules on small entities in connection with their assessment under 
Executive Order 12866. The incremental changes of these final 
regulations impose minimal additional costs, but also serve to reduce 
the costs of compliance by providing help to plans and service 
providers by providing clarifications. These final regulations also 
incorporate into regulations previous guidance from the Departments 
that has taken the form of responses to frequently asked questions or 
enforcement safe harbors. Accordingly, pursuant to section 605(b) of 
the RFA, the Departments hereby certify that these final regulations 
will not have a significant economic impact on a substantial number of 
small entities.

D. Unfunded Mandates Reform Act--Department of Labor and Department of 
Health and Human Services

    Section 202 of the Unfunded Mandates Reform Act (UMRA) of 1995 
requires that agencies assess anticipated costs and benefits before 
issuing any final rule that includes a Federal mandate that could 
result in expenditure in any one year by State, local or Tribal 
governments, in the aggregate, or by the private sector, of $100 
million in 1995 dollars updated annually for inflation. In 2015, that 
threshold level is approximately $144 million. These final regulations 
include no mandates on State, local, or Tribal governments. These final 
regulations propose requirements regarding standardized consumer 
disclosures that would affect private sector firms (for example, health 
insurance issuers offering coverage in the individual and group 
markets, and third-party administrators providing administrative 
services to group health plans), but we conclude that these costs would 
not exceed the $144 million threshold. Thus, the Departments of Labor 
and HHS conclude that these final regulations would not impose an 
unfunded mandate on State, local or Tribal governments or the private 
sector. Regardless, consistent with policy embodied in UMRA, the final 
requirements described in this notice of final rulemaking has been 
designed to be the least burdensome alternative for State, local and 
Tribal governments, and the private sector while achieving the 
objectives of the Affordable Care Act.

E. Federalism Statement--Department of Labor and Department of Health 
and Human Services

    Executive Order 13132 outlines fundamental principles of 
federalism, and requires the adherence to specific criteria by Federal 
agencies in the process of their formulation and implementation of 
policies that have ``substantial direct effects'' on the States, the 
relationship between the national government and States, or on the 
distribution of power and responsibilities among the various levels of 
government. Federal agencies promulgating regulations that have 
federalism implications must consult with State and local officials and 
describe the extent of their consultation and the nature of the 
concerns of State and local officials in the preamble to the 
regulation.
    In the Departments of Labor's and HHS' view, these final 
regulations have federalism implications because they would have direct 
effects on the States, the relationship between the national government 
and the States, or on the distribution of power and responsibilities 
among various levels of government relating to the disclosure of health 
insurance coverage information to consumers. Under these final 
regulations, all group health plans and health insurance issuers 
offering group or individual health insurance coverage, including self-
funded non-federal governmental plans as defined in section 2791 of the 
PHS Act, would be required to follow uniform standards for compiling 
and providing a summary of benefits and coverage to consumers. Such 
Federal standards developed under PHS Act section 2715(a) would preempt 
any related State standards that require a summary of benefits and 
coverage that provides less information to consumers than that required 
to be provided under PHS Act section 2715(a).
    In general, through section 514, ERISA supersedes State laws to the 
extent that they relate to any covered employee benefit plan, and 
preserves State laws that regulate insurance, banking, or securities. 
While ERISA prohibits States from regulating a plan as an insurance or 
investment company or bank, the preemption provisions of section 731 of 
ERISA and section 2724 of the PHS Act (implemented in 29 CFR 
2590.731(a) and 45 CFR 146.143(a)) apply so that the requirements in 
title XXVII of the PHS Act (including those added by the Affordable 
Care Act) are not to be construed to supersede any provision of State 
law which establishes, implements, or continues in effect any standard 
or requirement solely relating to health insurance issuers in 
connection with individual or group health insurance coverage except to 
the extent that such standard or requirement prevents the application 
of a requirement of a Federal standard. The conference report 
accompanying HIPAA indicates that this is intended to be the 
``narrowest'' preemption of State laws (See House Conf. Rep. No. 104-
736, at 205, reprinted in 1996 U.S. Code Cong. & Admin. News 2018).
    States may continue to apply State law requirements except to the 
extent that such requirements prevent the application of the Affordable 
Care Act requirements that are the subject of this rulemaking. 
Accordingly, States have significant latitude to impose requirements on 
health insurance issuers that are more restrictive than the Federal 
law. However, under these final rules, a State would not be allowed to 
impose a requirement that modifies the summary of benefits and coverage 
required to be provided under PHS Act section 2715(a), because it would 
prevent the application of these final rules' uniform disclosure 
requirements.
    In compliance with the requirement of Executive Order 13132 that 
agencies examine closely any policies that may have federalism 
implications or limit the policy making discretion of the States, the 
Departments of Labor and HHS have engaged in efforts to consult with 
and work cooperatively with affected States, including consulting with, 
and attending conferences of, the National Association of Insurance 
Commissioners and consulting with State insurance officials on an 
individual basis. It is expected that the Departments of Labor and HHS 
will act in a similar fashion in enforcing the Affordable Care Act, 
including the provisions of section 2715 of the PHS Act. Throughout the 
process of developing these final regulations, to the extent feasible 
within the applicable preemption provisions, the Departments of Labor 
and HHS have attempted to balance the States' interests in regulating 
health insurance issuers, and Congress' intent to provide uniform 
minimum protections to consumers in every State. By doing so, it is the 
Departments of Labor's and HHS' view

[[Page 34304]]

that they have complied with the requirements of Executive Order 13132.
    Pursuant to the requirements set forth in section 8(a) of Executive 
Order 13132, and by the signatures affixed to this final rule, the 
Departments certify that the Employee Benefits Security Administration 
and the Centers for Medicare & Medicaid Services have complied with the 
requirements of Executive Order 13132 for the attached final rules in a 
meaningful and timely manner.

F. Special Analyses--Department of the Treasury

    For purposes of the Department of the Treasury it has been 
determined that this notice of final rulemaking is not a significant 
regulatory action as defined in Executive Order 12866, as supplemented 
by Executive Order 13563. Therefore, a regulatory assessment is not 
required. It has also been determined that section 553(b) of the 
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to 
these final regulations. For a discussion of the impact of this final 
rule on small entities, please see section V.C. of this preamble. 
Pursuant to section 7805(f) of the Code, this notice of final 
rulemaking has been submitted to the Small Business Administration for 
comment on its impact on small business.

G. Congressional Review Act

    These final regulations are subject to the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801 et seq.), which specifies that before a rule can 
take effect, the Federal agency promulgating the rule shall submit to 
each House of the Congress and to the Comptroller General a report 
containing a copy of the rule along with other specified information, 
and has been transmitted to Congress and the Comptroller General for 
review.

IV. Statutory Authority

    The Department of the Treasury regulations are adopted pursuant to 
the authority contained in sections 7805 and 9833 of the Code.
    The Department of Labor regulations are adopted pursuant to the 
authority contained in 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 
1181-1183, 1181 note, 1185, 1185a, 1185b, 1185d, 1191, 1191a, 1191b, 
and 1191c; sec. 101(g), Public Law 104-191, 110 Stat. 1936; sec. 
401(b), Public Law 105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 
512(d), Public Law 110-343, 122 Stat. 3881; sec. 1001, 1201, and 
1562(e), Public Law 111-148, 124 Stat. 119, as amended by Public Law 
111-152, 124 Stat. 1029; Secretary of Labor's Order 1-2011, 77 FR 1088 
(January 9, 2012).
    The Department of Health and Human Services regulations are adopted 
pursuant to the authority contained in sections 2701 through 2763, 
2791, and 2792 of the PHS Act (42 U.S.C. 300gg through 300gg-63, 300gg-
91, and 300gg-92), as amended.

List of Subjects

26 CFR Part 54

    Excise taxes, Health care, Health insurance, Pensions, Reporting 
and recordkeeping requirements.

29 CFR Part 2590

    Continuation coverage, Disclosure, Employee benefit plans, Group 
health plans, Health care, Health insurance, Medical child support, 
Reporting and recordkeeping requirements.

45 CFR Part 147

    Health care, Health insurance, Reporting and recordkeeping 
requirements, State regulation of health insurance.

    Dated: June 8, 2015.
John Dalrymple,
Deputy Commissioner for Services and Enforcement, Internal Revenue 
Service.
    Approved: June 9, 2015.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
    Signed this 5th day of June, 2015.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
    Dated: June 2, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Dated: June 9, 2015.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.

DEPARTMENT OF THE TREASURY

    Internal Revenue Service



26 CFR Chapter 1

    Accordingly, 26 CFR part 54 is amended as follows:

PART54 --PENSION EXCISE TAXES

0
Paragraph 1. The authority citation for part 54 continues to read in 
part as follows:

    Authority:  Authority: 26 U.S.C. 7805 * * *.
    Section 54.9815-2715 also issued under 26 U.S.C. 9833;
* * * * *

0
Par. 2. Section 54.9815-2715 is revised to read as follows:


Sec.  54.9815-2715  Summary of benefits and coverage and uniform 
glossary.

    (a) Summary of benefits and coverage--(1) In general. A group 
health plan (and its administrator as defined in section 3(16)(A) of 
ERISA)), and a health insurance issuer offering group health insurance 
coverage, is required to provide a written summary of benefits and 
coverage (SBC) for each benefit package without charge to entities and 
individuals described in this paragraph (a)(1) in accordance with the 
rules of this section.
    (i) SBC provided by a group health insurance issuer to a group 
health plan--(A) Upon application. A health insurance issuer offering 
group health insurance coverage must provide the SBC to a group health 
plan (or its sponsor) upon application for health coverage, as soon as 
practicable following receipt of the application, but in no event later 
than seven business days following receipt of the application. If an 
SBC was provided before application pursuant to paragraph (a)(1)(i)(D) 
of this section (relating to SBCs upon request), this paragraph 
(a)(1)(i)(A) is deemed satisfied, provided there is no change to the 
information required to be in the SBC. However, if there has been a 
change in the information required, a new SBC that includes the changed 
information must be provided upon application pursuant to this 
paragraph (a)(1)(i)(A).
    (B) By first day of coverage (if there are changes). If there is 
any change in the information required to be in the SBC that was 
provided upon application and before the first day of coverage, the 
issuer must update and provide a current SBC to the plan (or its 
sponsor) no later than the first day of coverage.
    (C) Upon renewal, reissuance, or reenrollment. If the issuer renews 
or reissues a policy, certificate, or contract of insurance for a 
succeeding policy year, or automatically re-enrolls the policyholder or 
its participants and beneficiaries in coverage, the issuer must provide 
a new SBC as follows:
    (1) If written application is required (in either paper or 
electronic form) for renewal or reissuance, the SBC must be provided no 
later than the date the written application materials are distributed.
    (2) If renewal, reissuance, or reenrollment is automatic, the SBC 
must be provided no later than 30 days prior

[[Page 34305]]

to the first day of the new plan or policy year; however, with respect 
to an insured plan, if the policy, certificate, or contract of 
insurance has not been issued or renewed before such 30-day period, the 
SBC must be provided as soon as practicable but in no event later than 
seven business days after issuance of the new policy, certificate, or 
contract of insurance, or the receipt of written confirmation of intent 
to renew, whichever is earlier.
    (D) Upon request. If a group health plan (or its sponsor) requests 
an SBC or summary information about a health insurance product from a 
health insurance issuer offering group health insurance coverage, an 
SBC must be provided as soon as practicable, but in no event later than 
seven business days following receipt of the request.
    (ii) SBC provided by a group health insurance issuer and a group 
health plan to participants and beneficiaries--(A) In general. A group 
health plan (including its administrator, as defined under section 
3(16) of ERISA), and a health insurance issuer offering group health 
insurance coverage, must provide an SBC to a participant or beneficiary 
(as defined under sections 3(7) and 3(8) of ERISA), and consistent with 
the rules of paragraph (a)(1)(iii) of this section, with respect to 
each benefit package offered by the plan or issuer for which the 
participant or beneficiary is eligible.
    (B) Upon application. The SBC must be provided as part of any 
written application materials that are distributed by the plan or 
issuer for enrollment. If the plan or issuer does not distribute 
written application materials for enrollment, the SBC must be provided 
no later than the first date on which the participant is eligible to 
enroll in coverage for the participant or any beneficiaries. If an SBC 
was provided before application pursuant to paragraph (a)(1)(ii)(F) of 
this section (relating to SBCs upon request), this paragraph 
(a)(1)(ii)(B) is deemed satisfied, provided there is no change to the 
information required to be in the SBC. However, if there has been a 
change in the information that is required to be in the SBC, a new SBC 
that includes the changed information must be provided upon application 
pursuant to this paragraph (a)(1)(ii)(B).
    (C) By first day of coverage (if there are changes). (1) If there 
is any change to the information required to be in the SBC that was 
provided upon application and before the first day of coverage, the 
plan or issuer must update and provide a current SBC to a participant 
or beneficiary no later than the first day of coverage.
    (2) If the plan sponsor is negotiating coverage terms after an 
application has been filed and the information required to be in the 
SBC changes, the plan or issuer is not required to provide an updated 
SBC (unless an updated SBC is requested) until the first day of 
coverage.
    (D) Special enrollees. The plan or issuer must provide the SBC to 
special enrollees (as described in Sec.  54.9801-6) no later than the 
date by which a summary plan description is required to be provided 
under the timeframe set forth in ERISA section 104(b)(1)(A) and its 
implementing regulations, which is 90 days from enrollment.
    (E) Upon renewal, reissuance, or reenrollment. If the plan or 
issuer requires participants or beneficiaries to renew in order to 
maintain coverage (for example, for a succeeding plan year), or 
automatically re-enrolls participants and beneficiaries in coverage, 
the plan or issuer must provide a new SBC, as follows:
    (1) If written application is required for renewal, reissuance, or 
reenrollment (in either paper or electronic form), the SBC must be 
provided no later than the date on which the written application 
materials are distributed.
    (2) If renewal, reissuance, or reenrollment is automatic, the SBC 
must be provided no later than 30 days prior to the first day of the 
new plan or policy year; however, with respect to an insured plan, if 
the policy, certificate, or contract of insurance has not been issued 
or renewed before such 30-day period, the SBC must be provided as soon 
as practicable but in no event later than seven business days after 
issuance of the new policy, certificate, or contract of insurance, or 
the receipt of written confirmation of intent to renew, whichever is 
earlier.
    (F) Upon request. A plan or issuer must provide the SBC to 
participants or beneficiaries upon request for an SBC or summary 
information about the health coverage, as soon as practicable, but in 
no event later than seven business days following receipt of the 
request.
    (iii) Special rules to prevent unnecessary duplication with respect 
to group health coverage--(A) An entity required to provide an SBC 
under this paragraph (a)(1) with respect to an individual satisfies 
that requirement if another party provides the SBC, but only to the 
extent that the SBC is timely and complete in accordance with the other 
rules of this section. Therefore, for example, in the case of a group 
health plan funded through an insurance policy, the plan satisfies the 
requirement to provide an SBC with respect to an individual if the 
issuer provides a timely and complete SBC to the individual. An entity 
required to provide an SBC under this paragraph (a)(1) with respect to 
an individual that contracts with another party to provide such SBC is 
considered to satisfy the requirement to provide such SBC if:
    (1) The entity monitors performance under the contract;
    (2) If the entity has knowledge that the SBC is not being provided 
in a manner that satisfies the requirements of this section and the 
entity has all information necessary to correct the noncompliance, the 
entity corrects the noncompliance as soon as practicable; and
    (3) If the entity has knowledge the SBC is not being provided in a 
manner that satisfies the requirements of this section and the entity 
does not have all information necessary to correct the noncompliance, 
the entity communicates with participants and beneficiaries who are 
affected by the noncompliance regarding the noncompliance, and begins 
taking significant steps as soon as practicable to avoid future 
violations.
    (B) If a single SBC is provided to a participant and any 
beneficiaries at the participant's last known address, then the 
requirement to provide the SBC to the participant and any beneficiaries 
is generally satisfied. However, if a beneficiary's last known address 
is different than the participant's last known address, a separate SBC 
is required to be provided to the beneficiary at the beneficiary's last 
known address.
    (C) With respect to a group health plan that offers multiple 
benefit packages, the plan or issuer is required to provide a new SBC 
automatically to participants and beneficiaries upon renewal or 
reenrollment only with respect to the benefit package in which a 
participant or beneficiary is enrolled (or will be automatically re-
enrolled under the plan); SBCs are not required to be provided 
automatically upon renewal or reenrollment with respect to benefit 
packages in which the participant or beneficiary is not enrolled (or 
will not automatically be enrolled). However, if a participant or 
beneficiary requests an SBC with respect to another benefit package (or 
more than one other benefit package) for which the participant or 
beneficiary is eligible, the SBC (or SBCs, in the case of a request for 
SBCs relating to more than one benefit package) must be provided upon 
request as soon as practicable, but in no event later than seven 
business days following receipt of the request.
    (D) Subject to paragraph (a)(2)(ii) of this section, a plan 
administrator of a

[[Page 34306]]

group health plan that uses two or more insurance products provided by 
separate health insurance issuers with respect to a single group health 
plan may synthesize the information into a single SBC or provide 
multiple partial SBCs provided that all the SBC include the content in 
paragraph (a)(2)(iii) of this section.
    (2) Content--(i) In general. Subject to paragraph (a)(2)(iii) of 
this section, the SBC must include the following:
    (A) Uniform definitions of standard insurance terms and medical 
terms so that consumers may compare health coverage and understand the 
terms of (or exceptions to) their coverage, in accordance with guidance 
as specified by the Secretary;
    (B) A description of the coverage, including cost sharing, for each 
category of benefits identified by the Secretary in guidance;
    (C) The exceptions, reductions, and limitations of the coverage;
    (D) The cost-sharing provisions of the coverage, including 
deductible, coinsurance, and copayment obligations;
    (E) The renewability and continuation of coverage provisions;
    (F) Coverage examples, in accordance with the rules of paragraph 
(a)(2)(ii) of this section;
    (G) With respect to coverage beginning on or after January 1, 2014, 
a statement about whether the plan or coverage provides minimum 
essential coverage as defined under section 5000A(f) and whether the 
plan's or coverage's share of the total allowed costs of benefits 
provided under the plan or coverage meets applicable requirements;
    (H) A statement that the SBC is only a summary and that the plan 
document, policy, certificate, or contract of insurance should be 
consulted to determine the governing contractual provisions of the 
coverage;
    (I) Contact information for questions;
    (J) For issuers, an Internet web address where a copy of the actual 
individual coverage policy or group certificate of coverage can be 
reviewed and obtained;
    (K) For plans and issuers that maintain one or more networks of 
providers, an Internet address (or similar contact information) for 
obtaining a list of network providers;
    (L) For plans and issuers that use a formulary in providing 
prescription drug coverage, an Internet address (or similar contact 
information) for obtaining information on prescription drug coverage; 
and
    (M) An Internet address for obtaining the uniform glossary, as 
described in paragraph (c) of this section, as well as a contact phone 
number to obtain a paper copy of the uniform glossary, and a disclosure 
that paper copies are available.
    (ii) Coverage examples. The SBC must include coverage examples 
specified by the Secretary in guidance that illustrate benefits 
provided under the plan or coverage for common benefits scenarios 
(including pregnancy and serious or chronic medical conditions) in 
accordance with this paragraph (a)(2)(ii).
    (A) Number of examples. The Secretary may identify up to six 
coverage examples that may be required in an SBC.
    (B) Benefits scenarios. For purposes of this paragraph (a)(2)(ii), 
a benefits scenario is a hypothetical situation, consisting of a sample 
treatment plan for a specified medical condition during a specific 
period of time, based on recognized clinical practice guidelines as 
defined by the National Guideline Clearinghouse, Agency for Healthcare 
Research and Quality. The Secretary will specify, in guidance, the 
assumptions, including the relevant items and services and 
reimbursement information, for each claim in the benefits scenario.
    (C) Illustration of benefit provided. For purposes of this 
paragraph (a)(2)(ii), to illustrate benefits provided under the plan or 
coverage for a particular benefits scenario, a plan or issuer simulates 
claims processing in accordance with guidance issued by the Secretary 
to generate an estimate of what an individual might expect to pay under 
the plan, policy, or benefit package. The illustration of benefits 
provided will take into account any cost sharing, excluded benefits, 
and other limitations on coverage, as specified by the Secretary in 
guidance.
    (iii) Coverage provided outside the United States. In lieu of 
summarizing coverage for items and services provided outside the United 
States, a plan or issuer may provide an Internet address (or similar 
contact information) for obtaining information about benefits and 
coverage provided outside the United States. In any case, the plan or 
issuer must provide an SBC in accordance with this section that 
accurately summarizes benefits and coverage available under the plan or 
coverage within the United States.
    (3) Appearance. (i) A group health plan and a health insurance 
issuer must provide an SBC in the form, and in accordance with the 
instructions for completing the SBC, that are specified by the 
Secretary in guidance. The SBC must be presented in a uniform format, 
use terminology understandable by the average plan enrollee, not exceed 
four double-sided pages in length, and not include print smaller than 
12-point font.
    (ii) A group health plan that utilizes two or more benefit packages 
(such as major medical coverage and a health flexible spending 
arrangement) may synthesize the information into a single SBC, or 
provide multiple SBCs.
    (4) Form. (i) An SBC provided by an issuer offering group health 
insurance coverage to a plan (or its sponsor), may be provided in paper 
form. Alternatively, the SBC may be provided electronically (such as by 
email or an Internet posting) if the following three conditions are 
satisfied--
    (A) The format is readily accessible by the plan (or its sponsor);
    (B) The SBC is provided in paper form free of charge upon request; 
and
    (C) If the electronic form is an Internet posting, the issuer 
timely advises the plan (or its sponsor) in paper form or email that 
the documents are available on the Internet and provides the Internet 
address.
    (ii) An SBC provided by a group health plan or health insurance 
issuer to a participant or beneficiary may be provided in paper form. 
Alternatively, the SBC may be provided electronically (such as by email 
or an Internet posting) if the requirements of this paragraph 
(a)(4)(ii) are met.
    (A) With respect to participants and beneficiaries covered under 
the plan or coverage, the SBC may be provided electronically as 
described in this paragraph (a)(4)(ii)(A). However, in all cases, the 
plan or issuer must provide the SBC in paper form if paper form is 
requested.
    (1) In accordance with the Department of Labor's disclosure 
regulations at 29 CFR 2520.104b-1;
    (2) In connection with online enrollment or online renewal of 
coverage under the plan; or
    (3) In response to an online request made by a participant or 
beneficiary for the SBC.
    (B) With respect to participants and beneficiaries who are eligible 
but not enrolled for coverage, the SBC may be provided electronically 
if:
    (1) The format is readily accessible;
    (2) The SBC is provided in paper form free of charge upon request; 
and
    (3) In a case in which the electronic form is an Internet posting, 
the plan or issuer timely notifies the individual in paper form (such 
as a postcard) or email that the documents are available on the 
Internet, provides the Internet address, and notifies the individual 
that the documents are available in paper form upon request.

[[Page 34307]]

    (5) Language. A group health plan or health insurance issuer must 
provide the SBC in a culturally and linguistically appropriate manner. 
For purposes of this paragraph (a)(5), a plan or issuer is considered 
to provide the SBC in a culturally and linguistically appropriate 
manner if the thresholds and standards of 29 CFR 2590.715-2719(e) are 
met as applied to the SBC.
    (b) Notice of modification. If a group health plan, or health 
insurance issuer offering group health insurance coverage, makes any 
material modification (as defined under section 102 of ERISA) in any of 
the terms of the plan or coverage that would affect the content of the 
SBC, that is not reflected in the most recently provided SBC, and that 
occurs other than in connection with a renewal or reissuance of 
coverage, the plan or issuer must provide notice of the modification to 
enrollees not later than 60 days prior to the date on which the 
modification will become effective. The notice of modification must be 
provided in a form that is consistent with the rules of paragraph 
(a)(4) of this section.
    (c) Uniform glossary--(1) In general. A group health plan, and a 
health insurance issuer offering group health insurance coverage, must 
make available to participants and beneficiaries the uniform glossary 
described in paragraph (c)(2) of this section in accordance with the 
appearance and form and manner requirements of paragraphs (c)(3) and 
(4) of this section.
    (2) Health-coverage-related terms and medical terms. The uniform 
glossary must provide uniform definitions, specified by the Secretary 
in guidance, of the following health-coverage-related terms and medical 
terms:
    (i) Allowed amount, appeal, balance billing, co-insurance, 
complications of pregnancy, co-payment, deductible, durable medical 
equipment, emergency medical condition, emergency medical 
transportation, emergency room care, emergency services, excluded 
services, grievance, habilitation services, health insurance, home 
health care, hospice services, hospitalization, hospital outpatient 
care, in-network co-insurance, in-network co-payment, medically 
necessary, network, non-preferred provider, out-of-network co-
insurance, out-of-network co-payment, out-of-pocket limit, physician 
services, plan, preauthorization, preferred provider, premium, 
prescription drug coverage, prescription drugs, primary care physician, 
primary care provider, provider, reconstructive surgery, rehabilitation 
services, skilled nursing care, specialist, usual customary and 
reasonable (UCR), and urgent care; and
    (ii) Such other terms as the Secretary determines are important to 
define so that individuals and employers may compare and understand the 
terms of coverage and medical benefits (including any exceptions to 
those benefits), as specified in guidance.
    (3) Appearance. A group health plan, and a health insurance issuer, 
must provide the uniform glossary with the appearance specified by the 
Secretary in guidance to ensure the uniform glossary is presented in a 
uniform format and uses terminology understandable by the average plan 
enrollee.
    (4) Form and manner. A plan or issuer must make the uniform 
glossary described in this paragraph (c) available upon request, in 
either paper or electronic form (as requested), within seven business 
days after receipt of the request.
    (d) Preemption. State laws that conflict with this section 
(including a state law that requires a health insurance issuer to 
provide an SBC that supplies less information than required under 
paragraph (a) of this section) are preempted.
    (e) Failure to provide. A group health plan that willfully fails to 
provide information required under this section to a participant or 
beneficiary is subject to a fine of not more than $1,000 for each such 
failure. A failure with respect to each participant or beneficiary 
constitutes a separate offense for purposes of this paragraph (e). The 
Department will enforce this section using a process and procedure 
consistent with section 4980D of the Code.
    (f) Applicability to Medicare Advantage benefits. The requirements 
of this section do not apply to a group health plan benefit package 
that provides Medicare Advantage benefits pursuant to or 42 U.S.C. 
Chapter 7, Subchapter XVIII, Part C.
    (g) Applicability date. (1) This section is applicable to group 
health plans and group health insurance issuers in accordance with this 
paragraph (g). (See 29 CFR 2590.715-1251(d), providing that this 
section applies to grandfathered health plans.)
    (i) For disclosures with respect to participants and beneficiaries 
who enroll or re-enroll through an open enrollment period (including 
re-enrollees and late enrollees), this section applies beginning on the 
first day of the first open enrollment period that begins on or after 
September 1, 2015; and
    (ii) For disclosures with respect to participants and beneficiaries 
who enroll in coverage other than through an open enrollment period 
(including individuals who are newly eligible for coverage and special 
enrollees), this section applies beginning on the first day of the 
first plan year that begins on or after September 1, 2015.
    (2) For disclosures with respect to plans, this section is 
applicable to health insurance issuers beginning September 1, 2015.

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Chapter XXV

    Accordingly, 29 CFR part 2590 is amended as follows:

PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS

0
3. The authority citation for part 2590 continues to read as follows:

    Authority:  29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a, 1185b, 1185d, 1191, 1191a, 1191b, and 
1191c; sec. 101(g), Pub. L. 104-191, 110 Stat. 1936; sec. 401(b), 
Pub. L. 105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), 
Pub. L. 110-343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. 
L. 111-148, 124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 
1029; Secretary of Labor's Order 1-2011, 77 FR 1088 (January 9, 
2012).

0
4. Section 2590.715-2715 is revised to read as follows:

Sec.  2590.715-2715  Summary of benefits and coverage and uniform 
glossary.

    (a) Summary of benefits and coverage--(1) In general. A group 
health plan (and its administrator as defined in section 3(16)(A) of 
ERISA)), and a health insurance issuer offering group health insurance 
coverage, is required to provide a written summary of benefits and 
coverage (SBC) for each benefit package without charge to entities and 
individuals described in this paragraph (a)(1) in accordance with the 
rules of this section.
    (i) SBC provided by a group health insurance issuer to a group 
health plan--(A) Upon application. A health insurance issuer offering 
group health insurance coverage must provide the SBC to a group health 
plan (or its sponsor) upon application for health coverage, as soon as 
practicable following receipt of the application, but in no event later 
than seven business days following receipt of the application. If an 
SBC was provided before application pursuant to paragraph (a)(1)(i)(D) 
of this section (relating to SBCs upon request), this

[[Page 34308]]

paragraph (a)(1)(i)(A) is deemed satisfied, provided there is no change 
to the information required to be in the SBC. However, if there has 
been a change in the information required, a new SBC that includes the 
changed information must be provided upon application pursuant to this 
paragraph (a)(1)(i)(A).
    (B) By first day of coverage (if there are changes). If there is 
any change in the information required to be in the SBC that was 
provided upon application and before the first day of coverage, the 
issuer must update and provide a current SBC to the plan (or its 
sponsor) no later than the first day of coverage.
    (C) Upon renewal, reissuance, or reenrollment. If the issuer renews 
or reissues a policy, certificate, or contract of insurance for a 
succeeding policy year, or automatically re-enrolls the policyholder or 
its participants and beneficiaries in coverage, the issuer must provide 
a new SBC as follows:
    (1) If written application is required (in either paper or 
electronic form) for renewal or reissuance, the SBC must be provided no 
later than the date the written application materials are distributed.
    (2) If renewal, reissuance, or reenrollment is automatic, the SBC 
must be provided no later than 30 days prior to the first day of the 
new plan or policy year; however, with respect to an insured plan, if 
the policy, certificate, or contract of insurance has not been issued 
or renewed before such 30-day period, the SBC must be provided as soon 
as practicable but in no event later than seven business days after 
issuance of the new policy, certificate, or contract of insurance, or 
the receipt of written confirmation of intent to renew, whichever is 
earlier.
    (D) Upon request. If a group health plan (or its sponsor) requests 
an SBC or summary information about a health insurance product from a 
health insurance issuer offering group health insurance coverage, an 
SBC must be provided as soon as practicable, but in no event later than 
seven business days following receipt of the request.
    (ii) SBC provided by a group health insurance issuer and a group 
health plan to participants and beneficiaries--(A) In general. A group 
health plan (including its administrator, as defined under section 
3(16) of ERISA), and a health insurance issuer offering group health 
insurance coverage, must provide an SBC to a participant or beneficiary 
(as defined under sections 3(7) and 3(8) of ERISA), and consistent with 
the rules of paragraph (a)(1)(iii) of this section, with respect to 
each benefit package offered by the plan or issuer for which the 
participant or beneficiary is eligible.
    (B) Upon application. The SBC must be provided as part of any 
written application materials that are distributed by the plan or 
issuer for enrollment. If the plan or issuer does not distribute 
written application materials for enrollment, the SBC must be provided 
no later than the first date on which the participant is eligible to 
enroll in coverage for the participant or any beneficiaries. If an SBC 
was provided before application pursuant to paragraph (a)(1)(ii)(F) of 
this section (relating to SBCs upon request), this paragraph 
(a)(1)(ii)(B) is deemed satisfied, provided there is no change to the 
information required to be in the SBC. However, if there has been a 
change in the information that is required to be in the SBC, a new SBC 
that includes the changed information must be provided upon application 
pursuant to this paragraph (a)(1)(ii)(B).
    (C) By first day of coverage (if there are changes). (1) If there 
is any change to the information required to be in the SBC that was 
provided upon application and before the first day of coverage, the 
plan or issuer must update and provide a current SBC to a participant 
or beneficiary no later than the first day of coverage.
    (2) If the plan sponsor is negotiating coverage terms after an 
application has been filed and the information required to be in the 
SBC changes, the plan or issuer is not required to provide an updated 
SBC (unless an updated SBC is requested) until the first day of 
coverage.
    (D) Special enrollees. The plan or issuer must provide the SBC to 
special enrollees (as described in Sec.  2590.701-6) no later than the 
date by which a summary plan description is required to be provided 
under the timeframe set forth in ERISA section 104(b)(1)(A) and its 
implementing regulations, which is 90 days from enrollment.
    (E) Upon renewal, reissuance, or reenrollment. If the plan or 
issuer requires participants or beneficiaries to renew in order to 
maintain coverage (for example, for a succeeding plan year), or 
automatically re-enrolls participants and beneficiaries in coverage, 
the plan or issuer must provide a new SBC, as follows:
    (1) If written application is required for renewal, reissuance, or 
reenrollment (in either paper or electronic form), the SBC must be 
provided no later than the date on which the written application 
materials are distributed.
    (2) If renewal, reissuance, or reenrollment is automatic, the SBC 
must be provided no later than 30 days prior to the first day of the 
new plan or policy year; however, with respect to an insured plan, if 
the policy, certificate, or contract of insurance has not been issued 
or renewed before such 30-day period, the SBC must be provided as soon 
as practicable but in no event later than seven business days after 
issuance of the new policy, certificate, or contract of insurance, or 
the receipt of written confirmation of intent to renew, whichever is 
earlier.
    (F) Upon request. A plan or issuer must provide the SBC to 
participants or beneficiaries upon request for an SBC or summary 
information about the health coverage, as soon as practicable, but in 
no event later than seven business days following receipt of the 
request.
    (iii) Special rules to prevent unnecessary duplication with respect 
to group health coverage--(A) An entity required to provide an SBC 
under this paragraph (a)(1) with respect to an individual satisfies 
that requirement if another party provides the SBC, but only to the 
extent that the SBC is timely and complete in accordance with the other 
rules of this section. Therefore, for example, in the case of a group 
health plan funded through an insurance policy, the plan satisfies the 
requirement to provide an SBC with respect to an individual if the 
issuer provides a timely and complete SBC to the individual. An entity 
required to provide an SBC under this paragraph (a)(1) with respect to 
an individual that contracts with another party to provide such SBC is 
considered to satisfy the requirement to provide such SBC if:
    (1) The entity monitors performance under the contract;
    (2) If the entity has knowledge that the SBC is not being provided 
in a manner that satisfies the requirements of this section and the 
entity has all information necessary to correct the noncompliance, the 
entity corrects the noncompliance as soon as practicable; and
    (3) If the entity has knowledge the SBC is not being provided in a 
manner that satisfies the requirements of this section and the entity 
does not have all information necessary to correct the noncompliance, 
the entity communicates with participants and beneficiaries who are 
affected by the noncompliance regarding the noncompliance, and begins 
taking significant steps as soon as practicable to avoid future 
violations.
    (B) If a single SBC is provided to a participant and any 
beneficiaries at the participant's last known address, then the 
requirement to provide the SBC to the participant and any beneficiaries 
is generally satisfied. However, if a

[[Page 34309]]

beneficiary's last known address is different than the participant's 
last known address, a separate SBC is required to be provided to the 
beneficiary at the beneficiary's last known address.
    (C) With respect to a group health plan that offers multiple 
benefit packages, the plan or issuer is required to provide a new SBC 
automatically to participants and beneficiaries upon renewal or 
reenrollment only with respect to the benefit package in which a 
participant or beneficiary is enrolled (or will be automatically re-
enrolled under the plan); SBCs are not required to be provided 
automatically upon renewal or reenrollment with respect to benefit 
packages in which the participant or beneficiary is not enrolled (or 
will not automatically be enrolled). However, if a participant or 
beneficiary requests an SBC with respect to another benefit package (or 
more than one other benefit package) for which the participant or 
beneficiary is eligible, the SBC (or SBCs, in the case of a request for 
SBCs relating to more than one benefit package) must be provided upon 
request as soon as practicable, but in no event later than seven 
business days following receipt of the request.
    (D) Subject to paragraph (a)(2)(ii) of this section, a plan 
administrator of a group health plan that uses two or more insurance 
products provided by separate health insurance issuers with respect to 
a single group health plan may synthesize the information into a single 
SBC or provide multiple partial SBCs provided that all the SBC include 
the content in paragraph (a)(2)(iii) of this section.
    (2) Content--(i) In general. Subject to paragraph (a)(2)(iii) of 
this section, the SBC must include the following:
    (A) Uniform definitions of standard insurance terms and medical 
terms so that consumers may compare health coverage and understand the 
terms of (or exceptions to) their coverage, in accordance with guidance 
as specified by the Secretary;
    (B) A description of the coverage, including cost sharing, for each 
category of benefits identified by the Secretary in guidance;
    (C) The exceptions, reductions, and limitations of the coverage;
    (D) The cost-sharing provisions of the coverage, including 
deductible, coinsurance, and copayment obligations;
    (E) The renewability and continuation of coverage provisions;
    (F) Coverage examples, in accordance with the rules of paragraph 
(a)(2)(ii) of this section;
    (G) With respect to coverage beginning on or after January 1, 2014, 
a statement about whether the plan or coverage provides minimum 
essential coverage as defined under section 5000A(f) and whether the 
plan's or coverage's share of the total allowed costs of benefits 
provided under the plan or coverage meets applicable requirements;
    (H) A statement that the SBC is only a summary and that the plan 
document, policy, certificate, or contract of insurance should be 
consulted to determine the governing contractual provisions of the 
coverage;
    (I) Contact information for questions;
    (J) For issuers, an Internet web address where a copy of the actual 
individual coverage policy or group certificate of coverage can be 
reviewed and obtained;
    (K) For plans and issuers that maintain one or more networks of 
providers, an Internet address (or similar contact information) for 
obtaining a list of network providers;
    (L) For plans and issuers that use a formulary in providing 
prescription drug coverage, an Internet address (or similar contact 
information) for obtaining information on prescription drug coverage; 
and
    (M) An Internet address for obtaining the uniform glossary, as 
described in paragraph (c) of this section, as well as a contact phone 
number to obtain a paper copy of the uniform glossary, and a disclosure 
that paper copies are available.
    (ii) Coverage examples. The SBC must include coverage examples 
specified by the Secretary in guidance that illustrate benefits 
provided under the plan or coverage for common benefits scenarios 
(including pregnancy and serious or chronic medical conditions) in 
accordance with this paragraph (a)(2)(ii).
    (A) Number of examples. The Secretary may identify up to six 
coverage examples that may be required in an SBC.
    (B) Benefits scenarios. For purposes of this paragraph (a)(2)(ii), 
a benefits scenario is a hypothetical situation, consisting of a sample 
treatment plan for a specified medical condition during a specific 
period of time, based on recognized clinical practice guidelines as 
defined by the National Guideline Clearinghouse, Agency for Healthcare 
Research and Quality. The Secretary will specify, in guidance, the 
assumptions, including the relevant items and services and 
reimbursement information, for each claim in the benefits scenario.
    (C) Illustration of benefit provided. For purposes of this 
paragraph (a)(2)(ii), to illustrate benefits provided under the plan or 
coverage for a particular benefits scenario, a plan or issuer simulates 
claims processing in accordance with guidance issued by the Secretary 
to generate an estimate of what an individual might expect to pay under 
the plan, policy, or benefit package. The illustration of benefits 
provided will take into account any cost sharing, excluded benefits, 
and other limitations on coverage, as specified by the Secretary in 
guidance.
    (iii) Coverage provided outside the United States. In lieu of 
summarizing coverage for items and services provided outside the United 
States, a plan or issuer may provide an Internet address (or similar 
contact information) for obtaining information about benefits and 
coverage provided outside the United States. In any case, the plan or 
issuer must provide an SBC in accordance with this section that 
accurately summarizes benefits and coverage available under the plan or 
coverage within the United States.
    (3) Appearance. (i) A group health plan and a health insurance 
issuer must provide an SBC in the form, and in accordance with the 
instructions for completing the SBC, that are specified by the 
Secretary in guidance. The SBC must be presented in a uniform format, 
use terminology understandable by the average plan enrollee, not exceed 
four double-sided pages in length, and not include print smaller than 
12-point font.
    (ii) A group health plan that utilizes two or more benefit packages 
(such as major medical coverage and a health flexible spending 
arrangement) may synthesize the information into a single SBC, or 
provide multiple SBCs.
    (4) Form. (i) An SBC provided by an issuer offering group health 
insurance coverage to a plan (or its sponsor), may be provided in paper 
form. Alternatively, the SBC may be provided electronically (such as by 
email or an Internet posting) if the following three conditions are 
satisfied--
    (A) The format is readily accessible by the plan (or its sponsor);
    (B) The SBC is provided in paper form free of charge upon request; 
and
    (C) If the electronic form is an Internet posting, the issuer 
timely advises the plan (or its sponsor) in paper form or email that 
the documents are available on the Internet and provides the Internet 
address.
    (ii) An SBC provided by a group health plan or health insurance 
issuer to a participant or beneficiary may be provided in paper form. 
Alternatively, the SBC may be provided electronically

[[Page 34310]]

(such as by email or an Internet posting) if the requirements of this 
paragraph (a)(4)(ii) are met.
    (A) With respect to participants and beneficiaries covered under 
the plan or coverage, the SBC may be provided electronically as 
described in this paragraph (a)(4)(ii)(A). However, in all cases, the 
plan or issuer must provide the SBC in paper form if paper form is 
requested.
    (1) In accordance with the Department of Labor's disclosure 
regulations at 29 CFR 2520.104b-1;
    (2) In connection with online enrollment or online renewal of 
coverage under the plan; or
    (3) In response to an online request made by a participant or 
beneficiary for the SBC.
    (B) With respect to participants and beneficiaries who are eligible 
but not enrolled for coverage, the SBC may be provided electronically 
if:
    (1) The format is readily accessible;
    (2) The SBC is provided in paper form free of charge upon request; 
and
    (3) In a case in which the electronic form is an Internet posting, 
the plan or issuer timely notifies the individual in paper form (such 
as a postcard) or email that the documents are available on the 
Internet, provides the Internet address, and notifies the individual 
that the documents are available in paper form upon request.
    (5) Language. A group health plan or health insurance issuer must 
provide the SBC in a culturally and linguistically appropriate manner. 
For purposes of this paragraph (a)(5), a plan or issuer is considered 
to provide the SBC in a culturally and linguistically appropriate 
manner if the thresholds and standards of Sec.  2590.715-2719(e) are 
met as applied to the SBC.
    (b) Notice of modification. If a group health plan, or health 
insurance issuer offering group health insurance coverage, makes any 
material modification (as defined under section 102 of ERISA) in any of 
the terms of the plan or coverage that would affect the content of the 
SBC, that is not reflected in the most recently provided SBC, and that 
occurs other than in connection with a renewal or reissuance of 
coverage, the plan or issuer must provide notice of the modification to 
enrollees not later than 60 days prior to the date on which the 
modification will become effective. The notice of modification must be 
provided in a form that is consistent with the rules of paragraph 
(a)(4) of this section.
    (c) Uniform glossary--(1) In general. A group health plan, and a 
health insurance issuer offering group health insurance coverage, must 
make available to participants and beneficiaries the uniform glossary 
described in paragraph (c)(2) of this section in accordance with the 
appearance and form and manner requirements of paragraphs (c)(3) and 
(4) of this section.
    (2) Health-coverage-related terms and medical terms. The uniform 
glossary must provide uniform definitions, specified by the Secretary 
in guidance, of the following health-coverage-related terms and medical 
terms:
    (i) Allowed amount, appeal, balance billing, co-insurance, 
complications of pregnancy, co-payment, deductible, durable medical 
equipment, emergency medical condition, emergency medical 
transportation, emergency room care, emergency services, excluded 
services, grievance, habilitation services, health insurance, home 
health care, hospice services, hospitalization, hospital outpatient 
care, in-network co-insurance, in-network co-payment, medically 
necessary, network, non-preferred provider, out-of-network co-
insurance, out-of-network co-payment, out-of-pocket limit, physician 
services, plan, preauthorization, preferred provider, premium, 
prescription drug coverage, prescription drugs, primary care physician, 
primary care provider, provider, reconstructive surgery, rehabilitation 
services, skilled nursing care, specialist, usual customary and 
reasonable (UCR), and urgent care; and
    (ii) Such other terms as the Secretary determines are important to 
define so that individuals and employers may compare and understand the 
terms of coverage and medical benefits (including any exceptions to 
those benefits), as specified in guidance.
    (3) Appearance. A group health plan, and a health insurance issuer, 
must provide the uniform glossary with the appearance specified by the 
Secretary in guidance to ensure the uniform glossary is presented in a 
uniform format and uses terminology understandable by the average plan 
enrollee.
    (4) Form and manner. A plan or issuer must make the uniform 
glossary described in this paragraph (c) available upon request, in 
either paper or electronic form (as requested), within seven business 
days after receipt of the request.
    (d) Preemption. See Sec.  2590.731. State laws that conflict with 
this section (including a state law that requires a health insurance 
issuer to provide an SBC that supplies less information than required 
under paragraph (a) of this section) are preempted.
    (e) Failure to provide. A group health plan that willfully fails to 
provide information required under this section to a participant or 
beneficiary is subject to a fine of not more than $1,000 for each such 
failure. A failure with respect to each participant or beneficiary 
constitutes a separate offense for purposes of this paragraph (e). The 
Department will enforce this section using a process and procedure 
consistent with Sec.  2560.502c-2 of this chapter and 29 CFR part 2570, 
subpart C.
    (f) Applicability to Medicare Advantage benefits. The requirements 
of this section do not apply to a group health plan benefit package 
that provides Medicare Advantage benefits pursuant to or 42 U.S.C. 
Chapter 7, Subchapter XVIII, Part C.
    (g) Applicability date. (1) This section is applicable to group 
health plans and group health insurance issuers in accordance with this 
paragraph (g). (See Sec.  2590.715-1251(d), providing that this section 
applies to grandfathered health plans.)
    (i) For disclosures with respect to participants and beneficiaries 
who enroll or re-enroll through an open enrollment period (including 
re-enrollees and late enrollees), this section applies beginning on the 
first day of the first open enrollment period that begins on or after 
September 1, 2015; and
    (ii) For disclosures with respect to participants and beneficiaries 
who enroll in coverage other than through an open enrollment period 
(including individuals who are newly eligible for coverage and special 
enrollees), this section applies beginning on the first day of the 
first plan year that begins on or after September 1, 2015.
    (2) For disclosures with respect to plans, this section is 
applicable to health insurance issuers beginning September 1, 2015.

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Subtitle A

    For the reasons stated in the preamble, the Department of Health 
and Human Services amends 45 CFR part 147 as follows:

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL HEALTH INSURANCE MARKETS

0
5. The authority citation for part 147 continues to read as follows:

    Authority:  Sections 2701 through 2763, 2791, and 2792 of the 
Public Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-
91, and 300gg-92), as amended.


0
6. Revise Sec.  147.200 to read as follows:

[[Page 34311]]

Sec.  147.200  Summary of benefits and coverage and uniform glossary.

    (a) Summary of benefits and coverage--(1) In general. A group 
health plan (and its administrator as defined in section 3(16)(A) of 
ERISA)), and a health insurance issuer offering group or individual 
health insurance coverage, is required to provide a written summary of 
benefits and coverage (SBC) for each benefit package without charge to 
entities and individuals described in this paragraph (a)(1) in 
accordance with the rules of this section.
    (i) SBC provided by a group health insurance issuer to a group 
health plan--(A) Upon application. A health insurance issuer offering 
group health insurance coverage must provide the SBC to a group health 
plan (or its sponsor) upon application for health coverage, as soon as 
practicable following receipt of the application, but in no event later 
than seven business days following receipt of the application. If an 
SBC was provided before application pursuant to paragraph (a)(1)(i)(D) 
of this section (relating to SBCs upon request), this paragraph 
(a)(1)(i)(A) is deemed satisfied, provided there is no change to the 
information required to be in the SBC. However, if there has been a 
change in the information required, a new SBC that includes the changed 
information must be provided upon application pursuant to this 
paragraph (a)(1)(i)(A).
    (B) By first day of coverage (if there are changes). If there is 
any change in the information required to be in the SBC that was 
provided upon application and before the first day of coverage, the 
issuer must update and provide a current SBC to the plan (or its 
sponsor) no later than the first day of coverage.
    (C) Upon renewal, reissuance, or reenrollment. If the issuer renews 
or reissues a policy, certificate, or contract of insurance for a 
succeeding policy year, or automatically re-enrolls the policyholder or 
its participants and beneficiaries in coverage, the issuer must provide 
a new SBC as follows:
    (1) If written application is required (in either paper or 
electronic form) for renewal or reissuance, the SBC must be provided no 
later than the date the written application materials are distributed.
    (2) If renewal, reissuance, or reenrollment is automatic, the SBC 
must be provided no later than 30 days prior to the first day of the 
new plan or policy year; however, with respect to an insured plan, if 
the policy, certificate, or contract of insurance has not been issued 
or renewed before such 30-day period, the SBC must be provided as soon 
as practicable but in no event later than seven business days after 
issuance of the new policy, certificate, or contract of insurance, or 
the receipt of written confirmation of intent to renew, whichever is 
earlier.
    (D) Upon request. If a group health plan (or its sponsor) requests 
an SBC or summary information about a health insurance product from a 
health insurance issuer offering group health insurance coverage, an 
SBC must be provided as soon as practicable, but in no event later than 
seven business days following receipt of the request.
    (ii) SBC provided by a group health insurance issuer and a group 
health plan to participants and beneficiaries--(A) In general. A group 
health plan (including its administrator, as defined under section 
3(16) of ERISA), and a health insurance issuer offering group health 
insurance coverage, must provide an SBC to a participant or beneficiary 
(as defined under sections 3(7) and 3(8) of ERISA), and consistent with 
the rules of paragraph (a)(1)(iii) of this section, with respect to 
each benefit package offered by the plan or issuer for which the 
participant or beneficiary is eligible.
    (B) Upon application. The SBC must be provided as part of any 
written application materials that are distributed by the plan or 
issuer for enrollment. If the plan or issuer does not distribute 
written application materials for enrollment, the SBC must be provided 
no later than the first date on which the participant is eligible to 
enroll in coverage for the participant or any beneficiaries. If an SBC 
was provided before application pursuant to paragraph (a)(1)(ii)(F) of 
this section (relating to SBCs upon request), this paragraph 
(a)(1)(ii)(B) is deemed satisfied, provided there is no change to the 
information required to be in the SBC. However, if there has been a 
change in the information that is required to be in the SBC, a new SBC 
that includes the changed information must be provided upon application 
pursuant to this paragraph (a)(1)(ii)(B).
    (C) By first day of coverage (if there are changes). (1) If there 
is any change to the information required to be in the SBC that was 
provided upon application and before the first day of coverage, the 
plan or issuer must update and provide a current SBC to a participant 
or beneficiary no later than the first day of coverage.
    (2) If the plan sponsor is negotiating coverage terms after an 
application has been filed and the information required to be in the 
SBC changes, the plan or issuer is not required to provide an updated 
SBC (unless an updated SBC is requested) until the first day of 
coverage.
    (D) Special enrollees. The plan or issuer must provide the SBC to 
special enrollees (as described in Sec.  146.117 of this subchapter) no 
later than the date by which a summary plan description is required to 
be provided under the timeframe set forth in ERISA section 104(b)(1)(A) 
and its implementing regulations, which is 90 days from enrollment.
    (E) Upon renewal, reissuance, or reenrollment. If the plan or 
issuer requires participants or beneficiaries to renew in order to 
maintain coverage (for example, for a succeeding plan year), or 
automatically re-enrolls participants and beneficiaries in coverage, 
the plan or issuer must provide a new SBC, as follows:
    (1) If written application is required for renewal, reissuance, or 
reenrollment (in either paper or electronic form), the SBC must be 
provided no later than the date on which the written application 
materials are distributed.
    (2) If renewal, reissuance, or reenrollment is automatic, the SBC 
must be provided no later than 30 days prior to the first day of the 
new plan or policy year; however, with respect to an insured plan, if 
the policy, certificate, or contract of insurance has not been issued 
or renewed before such 30-day period, the SBC must be provided as soon 
as practicable but in no event later than seven business days after 
issuance of the new policy, certificate, or contract of insurance, or 
the receipt of written confirmation of intent to renew, whichever is 
earlier.
    (F) Upon request. A plan or issuer must provide the SBC to 
participants or beneficiaries upon request for an SBC or summary 
information about the health coverage, as soon as practicable, but in 
no event later than seven business days following receipt of the 
request.
    (iii) Special rules to prevent unnecessary duplication with respect 
to group health coverage--(A) An entity required to provide an SBC 
under this paragraph (a)(1) with respect to an individual satisfies 
that requirement if another party provides the SBC, but only to the 
extent that the SBC is timely and complete in accordance with the other 
rules of this section. Therefore, for example, in the case of a group 
health plan funded through an insurance policy, the plan satisfies the 
requirement to provide an SBC with respect to an individual if the 
issuer provides a timely and complete SBC to the individual. An entity 
required to provide an SBC under this paragraph (a)(1) with respect to 
an individual that contracts with another party to provide

[[Page 34312]]

such SBC is considered to satisfy the requirement to provide such SBC 
if:
    (1) The entity monitors performance under the contract;
    (2) If the entity has knowledge that the SBC is not being provided 
in a manner that satisfies the requirements of this section and the 
entity has all information necessary to correct the noncompliance, the 
entity corrects the noncompliance as soon as practicable; and
    (3) If the entity has knowledge the SBC is not being provided in a 
manner that satisfies the requirements of this section and the entity 
does not have all information necessary to correct the noncompliance, 
the entity communicates with participants and beneficiaries who are 
affected by the noncompliance regarding the noncompliance, and begins 
taking significant steps as soon as practicable to avoid future 
violations.
    (B) If a single SBC is provided to a participant and any 
beneficiaries at the participant's last known address, then the 
requirement to provide the SBC to the participant and any beneficiaries 
is generally satisfied. However, if a beneficiary's last known address 
is different than the participant's last known address, a separate SBC 
is required to be provided to the beneficiary at the beneficiary's last 
known address.
    (C) With respect to a group health plan that offers multiple 
benefit packages, the plan or issuer is required to provide a new SBC 
automatically to participants and beneficiaries upon renewal or 
reenrollment only with respect to the benefit package in which a 
participant or beneficiary is enrolled (or will be automatically re-
enrolled under the plan); SBCs are not required to be provided 
automatically upon renewal or reenrollment with respect to benefit 
packages in which the participant or beneficiary is not enrolled (or 
will not automatically be enrolled). However, if a participant or 
beneficiary requests an SBC with respect to another benefit package (or 
more than one other benefit package) for which the participant or 
beneficiary is eligible, the SBC (or SBCs, in the case of a request for 
SBCs relating to more than one benefit package) must be provided upon 
request as soon as practicable, but in no event later than seven 
business days following receipt of the request.
    (D) Subject to paragraph (a)(2)(ii) of this section, a plan 
administrator of a group health plan that uses two or more insurance 
products provided by separate health insurance issuers with respect to 
a single group health plan may synthesize the information into a single 
SBC or provide multiple partial SBCs provided that all the SBC include 
the content in paragraph (a)(2)(iii) of this section.
    (iv) SBC provided by a health insurance issuer offering individual 
health insurance coverage--(A) Upon application. A health insurance 
issuer offering individual health insurance coverage must provide an 
SBC to an individual covered under the policy (including every 
dependent) upon receiving an application for any health insurance 
policy, as soon as practicable following receipt of the application, 
but in no event later than seven business days following receipt of the 
application. If an SBC was provided before application pursuant to 
paragraph (a)(1)(iv)(D) of this section (relating to SBCs upon 
request), this paragraph (a)(1)(iv)(A) is deemed satisfied, provided 
there is no change to the information required to be in the SBC. 
However, if there has been a change in the information that is required 
to be in the SBC, a new SBC that includes the changed information must 
be provided upon application pursuant to this paragraph (a)(1)(iv)(A).
    (B) By first day of coverage (if there are changes). If there is 
any change in the information required to be in the SBC that was 
provided upon application and before the first day of coverage, the 
issuer must update and provide a current SBC to the individual no later 
than the first day of coverage.
    (C) Upon renewal, reissuance, or reenrollment. If the issuer renews 
or reissues a policy, certificate, or contract of insurance for a 
succeeding policy year, or automatically re-enrolls an individual (or 
dependent) covered under a policy, certificate, or contract of 
insurance into a policy, certificate, or contract of insurance under a 
different plan or product, the issuer must provide an SBC for the 
coverage in which the individual (including every dependent) will be 
enrolled, as follows:
    (1) If written application is required (in either paper or 
electronic form) for renewal, reissuance, or reenrollment, the SBC must 
be provided no later than the date on which the written application 
materials are distributed.
    (2) If renewal, reissuance, or reenrollment is automatic, the SBC 
must be provided no later than 30 days prior to the first day of the 
new policy year; however, if the policy, certificate, or contract of 
insurance has not been issued or renewed before such 30 day period, the 
SBC must be provided as soon as practicable but in no event later than 
seven business days after issuance of the new policy, certificate, or 
contract of insurance, or the receipt of written confirmation of intent 
to renew, whichever is earlier.
    (D) Upon request. A health insurance issuer offering individual 
health insurance coverage must provide an SBC to any individual or 
dependent upon request for an SBC or summary information about a health 
insurance product as soon as practicable, but in no event later than 
seven business days following receipt of the request.
    (v) Special rule to prevent unnecessary duplication with respect to 
individual health insurance coverage--(A) In general. If a single SBC 
is provided to an individual and any dependents at the individual's 
last known address, then the requirement to provide the SBC to the 
individual and any dependents is generally satisfied. However, if a 
dependent's last known address is different than the individual's last 
known address, a separate SBC is required to be provided to the 
dependent at the dependents' last known address.
    (B) Student health insurance coverage. With respect to student 
health insurance coverage as defined at Sec.  147.145(a), the 
requirement to provide an SBC to an individual will be considered 
satisfied for an entity if another party provides a timely and complete 
SBC to the individual. An entity required to provide an SBC under this 
paragraph (a)(1) with respect to an individual that contracts with 
another party to provide such SBC is considered to satisfy the 
requirement to provide such SBC if:
    (1) The entity monitors performance under the contract;
    (2) If the entity has knowledge that the SBC is not being provided 
in a manner that satisfies the requirements of this section and the 
entity has all information necessary to correct the noncompliance, the 
entity corrects the noncompliance as soon as practicable; and
    (3) If the entity has knowledge the SBC is not being provided in a 
manner that satisfies the requirements of this section and the entity 
does not have all information necessary to correct the noncompliance, 
the entity communicates with covered individuals and dependents who are 
affected by the noncompliance regarding the noncompliance, and begins 
taking significant steps as soon as practicable to avoid future 
violations.
    (2) Content--(i) In general. Subject to paragraph (a)(2)(iii) of 
this section, the SBC must include the following:
    (A) Uniform definitions of standard insurance terms and medical 
terms so that consumers may compare health coverage and understand the 
terms of

[[Page 34313]]

(or exceptions to) their coverage, in accordance with guidance as 
specified by the Secretary;
    (B) A description of the coverage, including cost sharing, for each 
category of benefits identified by the Secretary in guidance;
    (C) The exceptions, reductions, and limitations of the coverage;
    (D) The cost-sharing provisions of the coverage, including 
deductible, coinsurance, and copayment obligations;
    (E) The renewability and continuation of coverage provisions;
    (F) Coverage examples, in accordance with the rules of paragraph 
(a)(2)(ii) of this section;
    (G) With respect to coverage beginning on or after January 1, 2014, 
a statement about whether the plan or coverage provides minimum 
essential coverage as defined under section 5000A(f) and whether the 
plan's or coverage's share of the total allowed costs of benefits 
provided under the plan or coverage meets applicable requirements;
    (H) A statement that the SBC is only a summary and that the plan 
document, policy, certificate, or contract of insurance should be 
consulted to determine the governing contractual provisions of the 
coverage;
    (I) Contact information for questions;
    (J) For issuers, an Internet web address where a copy of the actual 
individual coverage policy or group certificate of coverage can be 
reviewed and obtained;
    (K) For plans and issuers that maintain one or more networks of 
providers, an Internet address (or similar contact information) for 
obtaining a list of network providers;
    (L) For plans and issuers that use a formulary in providing 
prescription drug coverage, an Internet address (or similar contact 
information) for obtaining information on prescription drug coverage;
    (M) An Internet address for obtaining the uniform glossary, as 
described in paragraph (c) of this section, as well as a contact phone 
number to obtain a paper copy of the uniform glossary, and a disclosure 
that paper copies are available; and
    (N) For qualified health plans sold through an individual market 
Exchange that exclude or provide for coverage of the services described 
in Sec.  156.280(d)(1) or (2) of this subchapter, a notice of coverage 
or exclusion of such services.
    (ii) Coverage examples. The SBC must include coverage examples 
specified by the Secretary in guidance that illustrate benefits 
provided under the plan or coverage for common benefits scenarios 
(including pregnancy and serious or chronic medical conditions) in 
accordance with this paragraph (a)(2)(ii).
    (A) Number of examples. The Secretary may identify up to six 
coverage examples that may be required in an SBC.
    (B) Benefits scenarios. For purposes of this paragraph (a)(2)(ii), 
a benefits scenario is a hypothetical situation, consisting of a sample 
treatment plan for a specified medical condition during a specific 
period of time, based on recognized clinical practice guidelines as 
defined by the National Guideline Clearinghouse, Agency for Healthcare 
Research and Quality. The Secretary will specify, in guidance, the 
assumptions, including the relevant items and services and 
reimbursement information, for each claim in the benefits scenario.
    (C) Illustration of benefit provided. For purposes of this 
paragraph (a)(2)(ii), to illustrate benefits provided under the plan or 
coverage for a particular benefits scenario, a plan or issuer simulates 
claims processing in accordance with guidance issued by the Secretary 
to generate an estimate of what an individual might expect to pay under 
the plan, policy, or benefit package. The illustration of benefits 
provided will take into account any cost sharing, excluded benefits, 
and other limitations on coverage, as specified by the Secretary in 
guidance.
    (iii) Coverage provided outside the United States. In lieu of 
summarizing coverage for items and services provided outside the United 
States, a plan or issuer may provide an Internet address (or similar 
contact information) for obtaining information about benefits and 
coverage provided outside the United States. In any case, the plan or 
issuer must provide an SBC in accordance with this section that 
accurately summarizes benefits and coverage available under the plan or 
coverage within the United States.
    (3) Appearance. (i) A group health plan and a health insurance 
issuer must provide an SBC in the form, and in accordance with the 
instructions for completing the SBC, that are specified by the 
Secretary in guidance. The SBC must be presented in a uniform format, 
use terminology understandable by the average plan enrollee (or, in the 
case of individual market coverage, the average individual covered 
under a health insurance policy), not exceed four double-sided pages in 
length, and not include print smaller than 12-point font. A health 
insurance issuer offering individual health insurance coverage must 
provide the SBC as a stand-alone document.
    (ii) A group health plan that utilizes two or more benefit packages 
(such as major medical coverage and a health flexible spending 
arrangement) may synthesize the information into a single SBC, or 
provide multiple SBCs.
    (4) Form. (i) An SBC provided by an issuer offering group health 
insurance coverage to a plan (or its sponsor), may be provided in paper 
form. Alternatively, the SBC may be provided electronically (such as by 
email or an Internet posting) if the following three conditions are 
satisfied--
    (A) The format is readily accessible by the plan (or its sponsor);
    (B) The SBC is provided in paper form free of charge upon request; 
and
    (C) If the electronic form is an Internet posting, the issuer 
timely advises the plan (or its sponsor) in paper form or email that 
the documents are available on the Internet and provides the Internet 
address.
    (ii) An SBC provided by a group health plan or health insurance 
issuer to a participant or beneficiary may be provided in paper form. 
Alternatively, the SBC may be provided electronically (such as by email 
or an Internet posting) if the requirements of this paragraph 
(a)(4)(ii) are met.
    (A) With respect to participants and beneficiaries covered under 
the plan or coverage, the SBC may be provided electronically as 
described in this paragraph (a)(4)(ii)(A). However, in all cases, the 
plan or issuer must provide the SBC in paper form if paper form is 
requested.
    (1) In accordance with the Department of Labor's disclosure 
regulations at 29 CFR 2520.104b-1;
    (2) In connection with online enrollment or online renewal of 
coverage under the plan; or
    (3) In response to an online request made by a participant or 
beneficiary for the SBC.
    (B) With respect to participants and beneficiaries who are eligible 
but not enrolled for coverage, the SBC may be provided electronically 
if:
    (1) The format is readily accessible;
    (2) The SBC is provided in paper form free of charge upon request; 
and
    (3) In a case in which the electronic form is an Internet posting, 
the plan or issuer timely notifies the individual in paper form (such 
as a postcard) or email that the documents are available on the 
Internet, provides the Internet address, and notifies the individual 
that the documents are available in paper form upon request.
    (iii) An issuer offering individual health insurance coverage must 
provide

[[Page 34314]]

an SBC in a manner that can reasonably be expected to provide actual 
notice in paper or electronic form.
    (A) An issuer satisfies the requirements of this paragraph 
(a)(4)(iii) if the issuer:
    (1) Hand-delivers a printed copy of the SBC to the individual or 
dependent;
    (2) Mails a printed copy of the SBC to the mailing address provided 
to the issuer by the individual or dependent;
    (3) Provides the SBC by email after obtaining the individual's or 
dependent's agreement to receive the SBC or other electronic 
disclosures by email;
    (4) Posts the SBC on the Internet and advises the individual or 
dependent in paper or electronic form, in a manner compliant with 
paragraphs (a)(4)(iii)(A)(1) through (3) of this section, that the SBC 
is available on the Internet and includes the applicable Internet 
address; or
    (5) Provides the SBC by any other method that can reasonably be 
expected to provide actual notice.
    (B) An SBC may not be provided electronically unless:
    (1) The format is readily accessible;
    (2) The SBC is placed in a location that is prominent and readily 
accessible;
    (3) The SBC is provided in an electronic form which can be 
electronically retained and printed;
    (4) The SBC is consistent with the appearance, content, and 
language requirements of this section;
    (5) The issuer notifies the individual or dependent that the SBC is 
available in paper form without charge upon request and provides it 
upon request.
    (C) Deemed compliance. A health insurance issuer offering 
individual health insurance coverage that provides the content required 
under paragraph (a)(2) of this section, as specified in guidance 
published by the Secretary, to the federal health reform Web portal 
described in Sec.  159.120 of this subchapter will be deemed to satisfy 
the requirements of paragraph (a)(1)(iv)(D) of this section with 
respect to a request for summary information about a health insurance 
product made prior to an application for coverage. However, nothing in 
this paragraph should be construed as otherwise limiting such issuer's 
obligations under this section.
    (iv) An SBC provided by a self-insured non-Federal governmental 
plan may be provided in paper form. Alternatively, the SBC may be 
provided electronically if the plan conforms to either the substance of 
the provisions in paragraph (a)(4)(ii) or (iii) of this section.
    (5) Language. A group health plan or health insurance issuer must 
provide the SBC in a culturally and linguistically appropriate manner. 
For purposes of this paragraph (a)(5), a plan or issuer is considered 
to provide the SBC in a culturally and linguistically appropriate 
manner if the thresholds and standards of Sec.  147.136(e) are met as 
applied to the SBC.
    (b) Notice of modification. If a group health plan, or health 
insurance issuer offering group or individual health insurance 
coverage, makes any material modification (as defined under section 102 
of ERISA) in any of the terms of the plan or coverage that would affect 
the content of the SBC, that is not reflected in the most recently 
provided SBC, and that occurs other than in connection with a renewal 
or reissuance of coverage, the plan or issuer must provide notice of 
the modification to enrollees (or, in the case of individual market 
coverage, an individual covered under a health insurance policy) not 
later than 60 days prior to the date on which the modification will 
become effective. The notice of modification must be provided in a form 
that is consistent with the rules of paragraph (a)(4) of this section.
    (c) Uniform glossary--(1) In general. A group health plan, and a 
health insurance issuer offering group health insurance coverage, must 
make available to participants and beneficiaries, and a health 
insurance issuer offering individual health insurance coverage must 
make available to applicants, policyholders, and covered dependents, 
the uniform glossary described in paragraph (c)(2) of this section in 
accordance with the appearance and form and manner requirements of 
paragraphs (c)(3) and (4) of this section.
    (2) Health-coverage-related terms and medical terms. The uniform 
glossary must provide uniform definitions, specified by the Secretary 
in guidance, of the following health-coverage-related terms and medical 
terms:
    (i) Allowed amount, appeal, balance billing, co-insurance, 
complications of pregnancy, co-payment, deductible, durable medical 
equipment, emergency medical condition, emergency medical 
transportation, emergency room care, emergency services, excluded 
services, grievance, habilitation services, health insurance, home 
health care, hospice services, hospitalization, hospital outpatient 
care, in-network co-insurance, in-network co-payment, medically 
necessary, network, non-preferred provider, out-of-network coinsurance, 
out-of-network co-payment, out-of-pocket limit, physician services, 
plan, preauthorization, preferred provider, premium, prescription drug 
coverage, prescription drugs, primary care physician, primary care 
provider, provider, reconstructive surgery, rehabilitation services, 
skilled nursing care, specialist, usual customary and reasonable (UCR), 
and urgent care; and
    (ii) Such other terms as the Secretary determines are important to 
define so that individuals and employers may compare and understand the 
terms of coverage and medical benefits (including any exceptions to 
those benefits), as specified in guidance.
    (3) Appearance. A group health plan, and a health insurance issuer, 
must provide the uniform glossary with the appearance specified by the 
Secretary in guidance to ensure the uniform glossary is presented in a 
uniform format and uses terminology understandable by the average plan 
enrollee (or, in the case of individual market coverage, an average 
individual covered under a health insurance policy).
    (4) Form and manner. A plan or issuer must make the uniform 
glossary described in this paragraph (c) available upon request, in 
either paper or electronic form (as requested), within seven business 
days after receipt of the request.
    (d) Preemption. For purposes of this section, the provisions of 
section 2724 of the PHS Act continue to apply with respect to 
preemption of State law. State laws that conflict with this section 
(including a state law that requires a health insurance issuer to 
provide an SBC that supplies less information than required under 
paragraph (a) of this section) are preempted.
    (e) Failure to provide. A health insurance issuer or a non-federal 
governmental health plan that willfully fails to provide information to 
a covered individual required under this section is subject to a fine 
of not more than $1,000 for each such failure. A failure with respect 
to each covered individual constitutes a separate offense for purposes 
of this paragraph (e). HHS will enforce these provisions in a manner 
consistent with Sec. Sec.  150.101 through 150.465 of this subchapter.
    (f) Applicability to Medicare Advantage benefits. The requirements 
of this section do not apply to a group health plan benefit package 
that provides Medicare Advantage benefits pursuant to or 42 U.S.C. 
Chapter 7, Subchapter XVIII, Part C.
    (g) Applicability date. (1) This section is applicable to group 
health plans and group health insurance issuers in accordance with this 
paragraph (g). (See Sec.  147.140(d), providing that this section 
applies to grandfathered health plans.)

[[Page 34315]]

    (i) For disclosures with respect to participants and beneficiaries 
who enroll or re-enroll through an open enrollment period (including 
re-enrollees and late enrollees), this section applies beginning on the 
first day of the first open enrollment period that begins on or after 
September 1, 2015; and
    (ii) For disclosures with respect to participants and beneficiaries 
who enroll in coverage other than through an open enrollment period 
(including individuals who are newly eligible for coverage and special 
enrollees), this section applies beginning on the first day of the 
first plan year that begins on or after September 1, 2015.
    (2) For disclosures with respect to plans, this section is 
applicable to health insurance issuers beginning September 1, 2015.
    (3) For disclosures with respect individuals and covered dependents 
in the individual market, this section is applicable to health 
insurance issuers beginning with respect to SBCs issued for coverage 
that begins on or after January 1, 2016.
[FR Doc. 2015-14559 Filed 6-12-15; 4:15 pm]
 BILLING CODE 4120-01; 4150-28-4830-01-P