Have Insurance Companies Delivered on Producing Summary of Benefits and Coverage Documents?

Summary of Benefits 2013
Summary of Benefits

Last week the Summary of Benefits and Coverage (SBC) provision of the PPACA law took effect. Using the availability of SBCs on insurance company websites as a benchmark, it appears most issuers are still struggling to provide the documents. However, the US Department of Labor (USDOL) has stated that “During the first year of applicability, the Departments will not impose penalties on plans and insurers that are working diligently and in good faith to comply.”

As experts in Uniform Summary of Benefits & Coverage, many clients have asked Tyrula the question: Are health insurance companies compliant with creating these documents? This is a challenging question because the law states that insurance companies need to provide a paper SBC document within 7 days of either application, renewal, or first day of coverage. Generating SBCs for all of the plan designs a health insurance company offers is proving to be a challenging process.

Tyrula assumed that the first set of SBCs a health plan would generate will address their individual plan types. As most insurance plans have an online application process, Tyrula also assumed they would make the SBCs available online. So, Tyrula visited the websites of over 35 major health plans the week after the law took effect to evaluate how many plans have made individual coverage SBC documents available online. These health plans varied in size and some of them provide nationwide coverage.

Tyrula targeted individual plans and applied as a single male born in 1980 who doesn’t consume tobacco. Observations were made to see if an SBC could be easily located on each carrier’s public site. Tyrula will continue to monitor the adoption of SBCs and will expand the scope of its analysis. It will include the accuracy of the SBCs, plans that modified their SBCs, and the availability of SBCs online.

Tyrula found the following:

  • 61.5% insurance companies DID NOT have SBCs online
  • 36% were large (more than 5 million members)
  • 36% were medium (1 million to 5 million members)
  • 28% were small (less than 1 million members)

Based on the data, Manu Uppal, CEO and co-founder of Tyrula LLC, said, “It’s not surprising that a high percentage of health plans have not made their SBCs available online. Creating SBCs is not an easy task. An AHIP study from last year predicted $194 million in annual ongoing operating costs for all insurance plans to comply with the SBC regulation. Many companies may have taken a ‘wait-and-see’ approach and are planning to be compliant by October 2013.”

Tyrula LLC is a products and consulting company focusing on providing innovative IT solutions to healthcare payer organizations. Tyrula’s solutions are derived from the best of both industry experience and technology sophistication and bring a unique perspective to bear on its work towards offering practical solutions. Tyrula recently launched two new products. One, mobile-eXam, is an intuitive and secure application that allows you to record mobile medical screenings used to improve CMS Star Ratings, close HEDIS gaps, and assist in wellness and health assessment programs. The other, SBC Boxed, provides a complete solution to produce SBC documents on demand, merging your plan data into a compliant template.

If you would like more information about this topic, a detailed report, or to schedule a meeting with one of our solution experts, please call Patricia Vu at 1-888-(4TYRULA) x 116 or email her at