How to Read a Summary of Benefits and Coverage (SBC)
Employers and employees may find an instance in which they need to locate their Summary of Benefits and Coverage (SBC) from their health insurance plan. Once it has been located, it can, at first, seem like a lot of information to digest. Let’s break down how to read an SBC.
But first, what is an SBC?
An SBC is a consumer-facing document that outlines the coverage provided by a health insurance plan. The intent of the SBC is to help consumers compare and select health insurance coverage. With this information, the consumer should be able to determine the coverage that will best meet their needs.
The Department of Labor provides a template for SBCs and we’ll use this as our example for this explanation.
The header at the top of each SBC provides the insurer’s name, the official plan name, coverage period, election tier, and plan type.
- Check the header to be sure you are looking at the correct SBC.
- Check the coverage dates. The plan renewal date should fall between the dates listed on the SBC.
- Note the election tier (who the plan covers). Although the SBC often describes coverage for individuals and families, you should know who is insured as you read through the cost-sharing structure.
- The plan type acronym will indicate what sort of provider network you will have available to you under the policy.
After the header, you’ll find important information about the plan: The plan’s structure, deductible, copay, coinsurance, and an indication of whether the plan requires a referral for a specialist provider.
The Common Medical Events section is next. This section should provide:
- The plan’s structure including copay/coinsurance amounts and if they are applicable before or after the deductible
- A list of examples of common services, showing what the member should expect to pay for that service (in-network and out-of-network)
- Limitations or exceptions on common services, if any. Examples include: preauthorization, prescription quantity limits, visits allowed per calendar year.
Next, under Excluded Services and Other Covered Services, you’ll find a list of services that the plan generally will not cover and a list of other covered services that may have limitations. The SBC will refer you to your plan document for more information.
Below Excluded Services, you’ll find the Consumer Protections information.
The last section provides Coverage Examples and a Q&A on those examples. The goal of these examples is to make the structure of the plan easier to grasp and understand how the different aspects of the plan fit together. These examples may help with estimating expenses, especially for those who are new to the details of health insurance.
SBCs must be provided to consumers:
- When they are enrolling or re-enrolling in health plans
- When they are newly eligible to enroll
- During Special Enrollment
- When there have been coverage changes or material modifications
- Upon request
If you need help with health plan terminology, click here for some definitions.
Contact your Acumen advisor or account executive with any questions on SBCs.