Short answer: Failure to provide an SBC on time can result in penalties of up to $1,000 per affected individual, per violation, 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 failure, per affected individual, 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
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Centers for Medicare & Medicaid Services, Summary of Benefits and Coverage (SBC)
https://www.cms.gov/cciio/resources/forms-reports-and-other-resources/summary-of-benefits-and-coverage -
Affordable Care Act, Section 2715
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26 U.S. Code §4980D
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29 CFR §2590.715-2715
Content history
Originally published: June 16, 2025
Last reviewed: January 25, 2026