Summary of Benefits and Coverage (SBC) Employer’s Guide

Nippon Life Insurance Company of America NLB 217 • (9/12)

What is the SBC – and Who Gets It? Summary of Benefits and Coverage

As part of the Affordable Care Act, health care companies and group health plans must now provide Summary of Benefits and Coverage documents called SBCs to help Employers, employees and their families understand and compare health plans. These requirements begin on September 23, 2012.

Purpose of an SBC and the Uniform Glossary The SBC and Uniform Glossary are meant to help consumers: • Understand their health care coverage • Compare health plans • Understand common terms used by health plans Insurance companies and group health plans must provide SBCs in a uniform format, and they can only differ regarding specific plan benefits. This uniform format will make it easier for Employers and employees to compare plans and shop for a plan that best meets their needs.

Who must receive an SBC • Employers • Anyone eligible to participate in plan

Information the SBC Must Contain The SBC must include: • A description of the health benefits and coverage under a plan. • Plain language and terms • Exceptions, reductions, or limitations on coverage • Cost-sharing provisions of the coverage -- including deductible, coinsurance, and copayment obligations • Renewability and continuation-of-coverage provisions • Appeals/Grievance Rights • Coverage examples, including common benefit scenarios for having a baby (normal delivery) or managing Type 2 diabetes (routine maintenance, well-controlled)

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• A statement that the SBC is only a summary and that the plan document, policy, or certificate of insurance should be consulted to determine the governing contractual provisions of the coverage • Contact number to call with questions, and an Internet address where a copy of the actual individual coverage policy or group certificate of coverage may be reviewed and obtained • An Internet address (or other contact information) for obtaining a list of network providers, an Internet address where an individual may find more information about the prescription drug coverage under the plan or coverage, and an Internet address where an individual may review the Uniform Glossary (as well as a disclosure that paper copies of the Uniform Glossary are available) • A uniform format -- four double-sided pages in length and 12-point font

Uniform Glossary The Uniform Glossary is a list of commonly used health care terms and their definitions designed specifically for use with the SBC. We will include the Uniform Glossary with the SBC.

SBC Coverage Examples

 

The federal government requires that all insurance companies and group health plans provide two examples of services covered under the plan. These examples help illustrate how deductibles, copays, and coinsurance work under the plan and their effects on the consumer through scenarios for having a baby and managing type 2 diabetes. Please note that the examples do not show exact costs, as each person’s care is unique. Instead, the sample costs are based on national averages supplied by the U.S. Department of Health and Human Services (not specific to a certain geographic area or health plan).

Health Reimbursement Arrangement (HRA) or Flexible Spending Account (FSA) Although the employee’s health benefits will appear on the SBC, contributions toward HRAs or FSAs that are used to pay out-of-pocket expenses are not reflected in the SBC. The following disclaimer will appear in the section regarding out-of-pocket limits on page 1 of the SBC. “These amounts assume you do not have an FSA, HSA or HRA. If you do use one to pay for out-ofpocket expenses, then your costs may be lower.”

 

Who Provides the SBC? Nippon Life Benefits and the Employer are both responsible for creating and delivering the SBC to employees, at no additional cost. Nippon Life Benefits will: • Create SBCs for plans insured through Nippon Life Benefits • Calculate and include the coverage examples specific to each plan • Provide the SBC to Employers at the required times • Provide an updated SBC to the Employer when Nippon Life Benefits is notified of changes The Employer must: • Provide the SBC to eligible employees at the required times.

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If the SBC is not provided to employees, the federal government can impose fines up to $1,000 per consumer for willful failure to provide the SBC. In addition, the SBC regulation authorizes the state departments of insurance to impose fines in accordance with that state’s regulatory framework. If the state fails to act, federal agencies can issue an additional fine of $100 per day per affected individual until the SBC is properly issued.

Timing Requirements When the SBC must be provided • Upon initial enrollment • At renewal/open enrollment • When the health plan or Employer makes material modifications to the plan, off renewal, that affect the SBC • Upon request • Upon special enrollment (as defined by HIPAA)

Breakdown of timing requirements Upon initial enrollment • Nippon Life Benefits will send the SBC to the Employer at the time of proposal • After Nippon Life Benefits supplies the Employer with an SBC, the Employer must distribute the SBC to its employees for any and all plans for which they are eligible. This must be done at the same time Employers provide employees with enrollment materials. • If any changes affecting the SBC occur after initial enrollment but before the first day of coverage, Nippon Life Benefits will provide an updated SBC to the Employer to provide to its employees by the first day of coverage.

period, or if they have an opportunity to change coverage options in an enrollment period, the Employer must provide the SBC at the same time open enrollment materials are distributed. • If employees are not required to actively elect a plan to maintain coverage during an open enrollment period, or if employees do not have an opportunity to change coverage options, the renewal is considered “automatic” and the Employer must provide the SBC no later than 30 days before the first day of the new plan year.

At renewal/open enrollment with a benefit change • The Employer must provide Nippon Life Benefits with any new benefit designs as soon as possible, but no later than 10 business days before the Employer needs an updated SBC. Nippon Life Benefits will then provide Employer with an updated SBC reflecting the new benefits through the amendment proposal. • If employees are required to actively elect a plan to maintain coverage during an open enrollment period, or if members have an opportunity to change coverage options in an enrollment period, the Employer must provide the SBC at the same time open enrollment materials are distributed. • If employees are not required to actively elect a plan to maintain coverage during an open enrollment period, or if employees do not have an opportunity to change coverage options, the renewal is considered “automatic” and the Employer must provide the SBC no later than 30 days before the first day of the new plan year.

Material modifications off renewal that affect the SBC

At renewal/open enrollment without a • Nippon Life Benefits will provide the Employer completed SBCs at least 60 days in advance of the benefit change • Nippon Life Benefits will include an SBC with renewal information that an Employer will duplicate and provide to employees. • If employees are required to actively elect a plan to maintain coverage during an open enrollment 3

effective date of the change, as long as Nippon Life Benefits received notification of benefit changes at least 75 days in advance of the effective date of the change.

Upon request

Translation of SBCs

• Employer must provide employee with an SBC within seven business days of receipt of a request from an employee, or • Nippon Life Benefits will provide an SBC within seven business days of its receipt of a request from the Employer or enrolled employee.

Final regulations require that the SBC be provided in a culturally and linguistically appropriate (CLA) manner. The CLA provision applies only to counties identified in the American Community Survey data provided by the U.S. Census Bureau report to have 10 percent or more of the population literate only in the same non-English language. Nippon Life Benefits will provide members with translations at no additional cost. Written translations will be provided upon request as required for customers in qualifying counties with 10% or more of the population reliant upon the following languages required by the CLA provision: • Spanish • Chinese • Tagalog • Navajo Nippon Life Benefits will also provide written translation for Japanese and Korean, upon request.

Upon special enrollment • The Employer must provide the special enrollee with their SBC within 90 days of enrollment.

Requesting the SBC and Uniform Glossary Enrollees can: • Contact their Employer for a copy of the SBC • Log on to www.nipponlifebenefits.com to view and print the Summary of Benefits and Coverage with Uniform Glossary Document • Contact customer service at the toll-free number on their ID card to request either a paper or electronic copy Employers can: • Use the SBC copy received within their proposal or renewal materials received from Nippon Life Benefits • Log onto www.nipponlifebenefits.com to view and print the SBC(s) specific to their plans • Contact their broker or Nippon Life Benefits customer service to request either a paper or electronic copy

Other Important Information Nippon Life Benefits will not charge for providing the SBC Nippon Life Benefits will not charge an employee for the SBC. Nippon Life Benefits will deliver to the Employer – without cost – one copy of the SBC(s) for the plans Nippon Life Benefits insures or administers.

Joint accountability for distribution of SBCs Nippon Life Benefits and Employers with insured medical plans have joint accountability for distributing the SBCs to employees within the required timeframes. It will be important for you to work with your Nippon Life Benefits contact to finalize your benefits early in the new business or renewal cycle to foster compliance with the SBC deadlines. • By law, Nippon Life Benefits is required to give you SBCs for distribution to your workforce, but we will need to work closely with you to ensure accuracy. • While we will support you by producing the SBC documents, Nippon Life Benefits will rely on you to distribute the SBC to Employees. We will support requests for copies of SBCs received from active Employees in a plan that meets the SBC distribution criteria.

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Additional Information: • Under the law, the SBC form cannot be customized in any way except for listing the benefits specific to that plan. Therefore, Nippon Life Benefits cannot accommodate requests for customization, including company logos. • The requirement to provide SBCs to all employees applies to both grandfathered and nongrandfathered plans. • Employees cannot request to stop receiving the SBC. The law requires Nippon Life Benefits and Employers to provide it to all employees. • Eligible Dependents, COBRA and continuation participants, and retirees are treated in the same manner as active employees and should be provided an SBC • Printed SBCs must be distributed in doublesided format

Additional requirements There are other requirements related to the SBC, including language assistance and delivery requirements. To access the regulations and regulatory guidance related to SBC, visit www.dol. gov/ebsa/healthreform/.

Nippon Life Insurance Company of America

Member of the Nippon Life (“NISSAY”) Group

www.nipponlifebenefits.com

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NLB 217 • (9/12)