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Summary of Benefits and Coverage

As I’m sure you know by now, as employers you are required to provide your employees with a standard

document that explains the employee’s benefits in a clear and concise manner. This explanatory

document is called the Summary of Benefits and Coverage, or SBC.  The intent of the SBC is to standardize

what all insurance carriers are providing to their members and provide an easy-to-understand summary about

a health plan’s benefits and coverage. The SBC must include the following:

  •  Uniform standard definitions of medical and health coverage terms;
  •  A description of the coverage and any cost sharing requirements such as deductibles; and
  •  Information regarding any coverage limitations or exceptions.

The SBC also must include coverage examples which illustrate sample medical situations, such as having

a baby or managing type 2 diabetes, and describe how much coverage the plan would provide for those


There are many times where an employer is required to distribute SBCs to employees – upon application

– upon renewal – and upon request, to name a few. Each situation comes with individual obligations on

the timing and distribution of the SBC.  The requirement to distribute an SBC to plan participants began in 2012,

as a part of the Affordable Care Act (ACA), but the intricate details of the SBC have changed and are expected to

continue to do so.  The SBC is being modified for plan years beginning after January 1, 2017 – final regulations

on those changes are expected in January, 2016 – stay tuned.

While I know this all may sound a bit overwhelming, the good news is, as long as you communicate with

your KFG advisor, we will supply you with the SBC and will help you to understand

when to distribute the SBC to your employees.