Short answer: Yes. An agent may assist with distributing SBCs, but legal responsibility for compliance remains with the employer or insurer.
Compliance
What information must be included in an SBC?
Short answer: An SBC must include standardized details about a health plan’s benefits, costs, coverage limitations, and real-world coverage examples so plans can be compared easily.
Do SBCs apply to fully insured and self-funded plans?
Short answer: Yes. SBC requirements apply to both fully insured and self-funded group health plans, although responsibility for preparing and distributing the SBC differs.
What happens if an SBC is not provided on time?
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.
When must SBCs be provided to employees?
Short answer: SBCs must be provided at initial enrollment, during open enrollment, upon request, and in advance of certain mid-year plan changes.
Who is responsible for creating and distributing SBCs?
Short answer: Responsibility for SBCs depends on the plan type—insurers generally create SBCs for fully insured plans, while employers are responsible for distribution; for self-funded plans, employers are responsible for both creation and distribution.
What is an SBC, and why is it required?
Short answer: An SBC (Summary of Benefits and Coverage) is a standardized document that summarizes a health plan’s key features and costs, and it is required under the Affordable Care Act to help people compare health plan options.
How is Texas State Continuation different from COBRA?
Short answer: COBRA is a federal continuation law that applies mainly to employers with 20 or more employees, while Texas State Continuation is a Texas law that applies only to fully insured group medical plans and operates either instead of COBRA or after COBRA ends.
How long does Texas State Continuation coverage last?
Short answer: Texas State Continuation coverage generally lasts up to 9 months, or up to 6 months after COBRA ends, but certain dependents may qualify for up to 36 months in limited situations.
Who is eligible for Texas State Continuation coverage?
Short answer: Individuals covered under a fully insured Texas group medical plan for at least three consecutive months before losing coverage may qualify for Texas State Continuation, unless coverage ended due to termination for cause.
What is Louisiana State Continuation coverage?
Short answer: Louisiana State Continuation allows certain individuals to continue fully insured group health coverage issued in Louisiana for up to 12 months after losing eligibility due to job loss or reduced hours.
Do I need a separate ERISA plan for each benefit?
Short answer: Technically yes, but most employers use a wrap document to combine multiple benefits into a single ERISA plan and simplify compliance.
Does ERISA apply to voluntary benefits?
Short answer: Sometimes. Voluntary benefits may be exempt from ERISA if the employer’s involvement is very limited, but ERISA generally applies when the employer contributes to or endorses the benefit.
What are the penalties for not complying with ERISA?
Short answer: Employers that fail to comply with ERISA may face daily monetary penalties, government audits, and corrective enforcement actions, depending on the type of violation.
What is a Wrap document and do I need one?
Short answer: A wrap document is an ERISA plan document that combines insurance policies and benefit contracts into a single ERISA-compliant plan, and it is commonly used to satisfy ERISA documentation requirements for employers offering benefits.
Are small employers exempt from ERISA requirements?
Short answer: No. ERISA applies to private employers of any size that sponsor health or welfare benefit plans, even if only one employee is covered.
What are an employer’s responsibilities under ERISA?
Short answer: Employers sponsoring ERISA-covered health plans must maintain plan documents, provide required disclosures, follow plan terms, and act as fiduciaries in the best interests of plan participants.
What documents are required under ERISA?
Short answer: Employers subject to ERISA must maintain a written plan document, provide a Summary Plan Description (SPD) to participants, and, for certain plans, file an annual Form 5500.
Which employers are subject to ERISA?
Short answer: ERISA applies to most private-sector employers that sponsor health or welfare benefit plans, regardless of size, while government and church employers are generally exempt.
What is ERISA and how does it apply to health plans?
Short answer: ERISA is a federal law that governs most private employer-sponsored health plans and sets rules for plan documents, disclosures, and fiduciary responsibilities to protect participants’ benefits.
What alternatives are available instead of COBRA coverage?
Short answer: Instead of COBRA, you may be able to enroll in Marketplace coverage, a spouse’s or parent’s employer plan, or Medicaid, which can be more affordable depending on your income and eligibility.
Can someone elect COBRA for just one family member?
Short answer: Yes. Each qualified beneficiary can elect COBRA independently, allowing coverage to continue for one family member while others decline.
What benefits do I get under COBRA?
Short answer: COBRA coverage is identical to the employer’s group health plan—same benefits, providers, and rules—because it is a continuation of coverage, not a separate plan.
Can COBRA coverage be dropped early?
Short answer: Yes. COBRA coverage can end before the maximum coverage period if certain events occur, such as missed premium payments, enrollment in other coverage, Medicare entitlement, or termination of the employer’s health plan.
What happens if a COBRA payment is late?
Short answer: COBRA includes a 30-day grace period for monthly premium payments. If payment is not made by the end of that grace period, coverage may be terminated and does not have to be reinstated.