Short answer: Failure to provide an SBC on time can result in penalties of up to $1,000 per affected individual (a statutory amount adjusted for inflation), and may trigger enforcement actions under federal law.
Providing a Summary of Benefits and Coverage (SBC) is a legal requirement under the Affordable Care Act. When an SBC is not provided as required, the responsible party may be subject to penalties and regulatory enforcement.
Federal rules allow for penalties of up to $1,000 per affected individual (a statutory amount adjusted for inflation), for willful noncompliance with SBC requirements. These penalties may be adjusted for inflation and can accumulate quickly when multiple participants or beneficiaries are impacted.
Enforcement authority is shared by multiple federal agencies, including the U.S. Department of Labor and the Internal Revenue Service. Enforcement actions may arise from employee complaints, regulatory audits, or broader investigations into Affordable Care Act compliance.
Whether the insurer or the employer is responsible for the violation depends on the type of plan and the specific SBC obligation involved. For fully insured plans, insurers are generally responsible for preparing the SBC, while employers are responsible for distribution. For self-funded plans, employers are responsible for both preparation and distribution.
Sources
Public Health Service Act §2715(f), 42 U.S.C. §300gg-15(f) (willful failure to provide an SBC is subject to a fine of not more than
Sources
,000 per failure, with each enrollee a separate offense; the amount is adjusted annually for inflation): .
law.cornell.edu/uscode/text/42/300gg-15U.S. Department of Labor (EBSA), Summary of Benefits and Coverage and Uniform Glossary: .
dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/summary-of-benefits