Research · 12 min read
What a Summary of Benefits and Coverage Has to Tell You
One plan document is written to a federal template, capped in length, and owed to you within seven business days of asking. Most guides never name it.
Key takeaways
- A group health plan, its administrator, or an insurer selling group or individual coverage must provide a written summary of benefits and coverage for each benefit package, without charge.
- The summary must not exceed four double-sided pages, must not use print smaller than 12-point font, and must follow the uniform format the agency specifies.
- Where a plan uses a formulary, the summary must carry an address for obtaining information on prescription drug coverage.
- A separate uniform glossary must be made available on request within seven business days, and its fixed term list includes preauthorization, excluded services and medically necessary.
- The rule reaches individually purchased coverage and grandfathered coverage, and expressly does not reach a benefit package providing Medicare Advantage benefits.
- The summary has to state that it is only a summary and that the plan document or policy governs, so it starts a coverage question rather than settling one.
Answer first: one plan document is written to a template
Plans hand out a lot of paper, and almost none of it is comparable between two employers. One document is the exception.
Federal rules require a written summary of benefits and coverage for each benefit package, without charge. The duty falls on a group health plan and its administrator, and on an insurer selling group or individual coverage.
The rules fix what has to be in it, how long it may run, and how small the print may be. They also fix the definitions of the words inside it.
Two of the required items point straight at a medication question. One is the description of exceptions, reductions and limitations on the coverage.
The other is specific. Where a plan uses a formulary for prescription drug coverage, the summary must carry an address for obtaining information on that coverage.
You can also demand one. A request for the summary has to be answered as soon as practicable, and in no event later than seven business days.
What the summary is required to contain
The content list runs to fourteen items, and it is worth reading as a checklist against the document you already hold.
Uniform definitions of standard insurance terms and medical terms, so that people can compare coverage and understand its terms or the exceptions to them. A description of the coverage, including cost sharing, for each category of benefits the agency identifies.
The exceptions, reductions and limitations of the coverage. The cost-sharing provisions, including deductible, coinsurance and copayment obligations. The renewability and continuation of coverage provisions.
Coverage examples. A statement about whether the plan provides minimum essential coverage, and whether its share of the total allowed costs of benefits meets the applicable requirement.
Contact information for questions. For insurers, a web address where the actual policy or group certificate can be reviewed and obtained. For plans and insurers with a provider network, an address for obtaining the network list.
For plans and insurers that use a formulary, an address for obtaining information on prescription drug coverage. An address for the uniform glossary, a phone number for a paper copy, and a statement that paper copies are available.
And the item that sets the whole document in its place. The summary must state that it is only a summary, and that the plan document, policy, certificate or contract should be consulted to determine the governing contractual provisions.
The format rules, which are unusually specific
Most disclosure rules say a document must be understandable and stop there. This one goes further.
The summary must be presented in a uniform format, in the form and according to the instructions the agency specifies in guidance. It must use terminology understandable by the average plan enrollee.
It must not exceed four double-sided pages in length, and must not include print smaller than 12-point font. An insurer selling individual coverage must provide it as a stand-alone document.
The statute behind the regulation states the same limit in slightly different words. It says the summary must not exceed four pages in length and must not include print smaller than 12-point font.
That difference is worth knowing before you count pages and conclude something is wrong. The two instruments describe the cap differently.
There is a language rule as well. The summary must be provided in a culturally and linguistically appropriate manner, measured against the thresholds in the internal-appeals rule.
The coverage examples, and what they are not
The examples are the part people misread most often, and the regulation is unusually candid about what they are.
A benefits scenario is a hypothetical situation. It consists of a sample treatment plan for a specified medical condition during a specific period of time, based on recognized clinical practice guidelines.
The agency specifies the assumptions for each claim in the scenario, including the relevant items and services and the reimbursement information. It may identify up to six examples that a summary may be required to carry.
To produce the illustration, a plan simulates claims processing under the agency's guidance. The result is an estimate of what an individual might expect to pay under that plan or benefit package.
The illustration takes into account cost sharing, excluded benefits and other limitations on coverage. It is still a simulation of a hypothetical person's year, not a quotation for yours.
For a price that reflects your own coverage, the instrument is the advance cost estimate covered in the companion guide, not this one.
The glossary, and the words it fixes
A separate duty sits beside the summary and gets almost no attention. Plans and insurers must make a uniform glossary available.
The regulation lists the terms it has to define, and the list is closed rather than illustrative. Several of them decide medication questions.
Preauthorization is on it. So are excluded services, medically necessary, prescription drug coverage, prescription drugs, out-of-pocket limit, appeal, grievance, allowed amount and balance billing.
The definitions themselves are specified by the agency in guidance, and the glossary must be presented in a uniform format understandable by the average enrollee.
The delivery rule is the practical part. A plan or insurer must make the glossary available on request, in paper or electronic form as requested, within seven business days.
Reading a denial beside the fixed definition of the term it turns on is a cheap check, and it costs one request.
When it has to arrive without you asking
The summary is owed at several moments, and the deadlines are written as business days rather than as reasonable efforts.
An insurer must provide it to a plan or its sponsor on application, as soon as practicable and no later than seven business days after receiving the application. The same seven-day rule covers a request.
If anything required to be in the summary changes between application and the first day of coverage, an updated one must be provided no later than the first day of coverage.
On renewal, reissuance or reenrollment, a new summary is due. Where written application materials are distributed, it must go out no later than the date they are distributed.
Where renewal is automatic, it is due no later than 30 days before the first day of the new plan or policy year, with a fallback where the policy has not yet been issued.
The statute adds the phrase that ties the timing to a decision. Each entity must provide the summary prior to any enrollment restriction, to an applicant at application, to an enrollee before enrollment or reenrollment, and to a policyholder at issuance.
Which coverage this reaches, read to the end
Scope is where an article like this usually overstates a rule, so the boundaries are worth stating before the rule is useful.
The duty reaches a group health plan and its administrator, and an insurer offering group or individual coverage. Individually purchased coverage is inside it, which is unusual among plan-disclosure rules.
It also reaches grandfathered coverage. The section's applicability paragraph points at the regulation preserving that status, and that regulation lists this among the provisions applying to grandfathered plans.
That is the opposite of the internal claims and appeals rule, which generally does not apply to grandfathered coverage. Two neighboring rules, two different answers about the same plan.
There is one carve-out written into the section. Its requirements do not apply to a group health plan benefit package providing Medicare Advantage benefits.
State law that conflicts is preempted, including a state law requiring a summary that supplies less information than the federal rule requires.
What it does not settle
The document tells you so itself, which is the most useful sentence in it.
A required item is a statement that the summary is only a summary, and that the plan document, policy, certificate or contract of insurance governs. Where the two disagree, the contract is what a decision rests on.
So the summary is a starting point and a comparison tool rather than the answer to a coverage question. It is the fastest way to see the shape of a benefit and the slowest way to settle a dispute.
The enforcement side is thin from a reader's point of view. An insurer or a non-federal governmental plan that willfully fails to provide the required information is subject to a fine, with each covered individual a separate offense.
A fine payable to the government is not a remedy that gets you the document. The route to the underlying instruments is the written request described in the companion guide.
Ask for the summary, the glossary and the detailed schedule of benefits together, in one dated written request, and keep a copy of what you sent.
Sources
- 45 CFR 147.200 — Summary of benefits and coverage and uniform glossaryParagraph (a)(1), the duty on a group health plan and its administrator, and on a health insurance issuer offering group or individual health insurance coverage, to provide a written summary of benefits and coverage for each benefit package without charge. The seven-business-day outer limits on application and on request in paragraphs (a)(1)(i), (a)(1)(iii)(C) and (a)(1)(iv), the first-day-of-coverage update where required information changed, and the renewal, reissuance and reenrollment timing including the 30-day rule for automatic renewal. Paragraph (a)(2)(i), the fourteen content items quoted and paraphrased here, including subparagraph (C) on exceptions, reductions and limitations, subparagraph (G) on minimum essential coverage, subparagraph (H) requiring the statement that the document is only a summary and that the plan document, policy, certificate or contract of insurance should be consulted, subparagraph (K) on the network provider list, subparagraph (L) requiring an internet address or similar contact information for obtaining information on prescription drug coverage where a formulary is used, and subparagraph (M) on the glossary address and paper copies. Paragraph (a)(2)(ii) on coverage examples, including the definition of a benefits scenario as a hypothetical situation consisting of a sample treatment plan for a specified medical condition during a specific period of time based on recognized clinical practice guidelines, the limit of up to six examples, and the illustration produced by simulating claims processing to generate an estimate of what an individual might expect to pay. Paragraph (a)(3)(i) on the uniform format, the four-double-sided-page limit, the 12-point font floor and the stand-alone requirement in the individual market. Paragraph (a)(5) on providing the summary in a culturally and linguistically appropriate manner. Paragraph (c), the uniform glossary, its listed terms and the seven-business-day response to a request. Paragraph (d) on preemption of conflicting state law including a law requiring less information. Paragraph (e) on the fine for a willful failure, whose amount is deliberately omitted from this article. Paragraph (f), the Medicare Advantage carve-out. And paragraph (g), the applicability paragraph and its cross-reference to the grandfathered-coverage regulation. The URL cited is the effective one returned by the host. Verified against a same-run control at the same path depth, which returned the host's not-found page carrying none of this text, and the served page was checked at its final paragraph and source note rather than only at its opening.
- 42 U.S.C. 300gg-15 — Development and utilization of uniform explanation of coverage documents and standardized definitionsSubsection (b)(1), the statutory appearance standard requiring a uniform format that does not exceed four pages in length and does not include print smaller than 12-point font, which is the wording compared here against the regulation's four double-sided pages. Subsection (b)(2) on presenting the summary in a culturally and linguistically appropriate manner using terminology understandable by the average plan enrollee. Subsection (b)(3), the statutory contents list underlying the regulation's fourteen items. Subsection (d)(1), the requirement to provide the summary prior to any enrollment restriction to an applicant at the time of application, to an enrollee prior to enrollment or reenrollment, and to a policyholder or certificate holder at issuance or delivery. Subsection (d)(3), which names the entities the duty falls on. Subsection (e) on preemption of related state standards providing less information. And subsections (g)(2) and (g)(3), the statutory lists of insurance-related and medical terms behind the uniform glossary. The printed title of the section was read before anything was written from it, because a plausible but incorrect section number returns a real and unrelated document on this host. Verified against a same-run control on the same host, which resolved to the database's document-not-found page.
- 45 CFR 147.140 — Preservation of right to maintain existing coverageParagraph (d) only, headed provisions applicable to all grandfathered health plans, which lists the statutory provisions that apply to grandfathered coverage for plan years, and in the individual market policy years, beginning on or after a date in 2010. The provision behind the summary of benefits and coverage is among them, which is the basis for the statement here that this rule reaches grandfathered coverage while the internal claims and appeals rule generally does not. The definition of grandfathered coverage and the separate statement a plan must carry to keep that status sit in paragraph (a) and belong to a different article, which is why neither is restated here. Verified against a same-run control at the same path depth, which returned the host's not-found page.
Frequently asked questions
What is this document actually called, and how do I get one?
The rules call it a summary of benefits and coverage, and a group health plan, its administrator, or an insurer selling group or individual coverage must provide one for each benefit package without charge. It is owed automatically at several points, including on application, on renewal or reenrollment, and before the first day of coverage where required information has changed. It is also owed on request, as soon as practicable and in no event later than seven business days after the request. Ask in writing and keep the date.
Does it have to say anything about prescription drugs?
Two of the required items reach a drug question directly. One is the description of the exceptions, reductions and limitations of the coverage, which is where a category the plan will not pay for belongs. The other is specific to medication. For plans and insurers that use a formulary in providing prescription drug coverage, the summary must include an internet address or similar contact information for obtaining information on that coverage. The glossary duty then fixes what prescription drug coverage, preauthorization and excluded services mean.
Are the cost examples in it a quote for my own situation?
No, and the regulation says why in its own words. A coverage example is built from a benefits scenario, which is a hypothetical situation consisting of a sample treatment plan for a specified condition over a specific period, based on recognized clinical practice guidelines. The plan then simulates claims processing under the agency's guidance to generate an estimate of what an individual might expect to pay. It illustrates how the plan behaves. For a figure tied to your own coverage, the advance cost estimate rule is the instrument, and it is covered separately.
My plan is an old one that has not changed in years. Does this still apply?
In the ordinary case, yes. The section's applicability paragraph points at the regulation that preserves grandfathered status, and that regulation lists the statutory provision behind this summary among the ones that reach grandfathered coverage. That is different from the internal claims and appeals rule, whose provisions generally do not apply to grandfathered plans. Two rules that sit a few pages apart give different answers, so establish which one you are quoting before you quote it.
The summary and my plan's drug list disagree. Which one governs?
Neither is a contract, and the summary says so about itself. A required item is a statement that it is only a summary and that the plan document, policy, certificate or contract of insurance should be consulted to determine the governing contractual provisions. A drug list is an operational document that can be revised. When the difference matters, ask for the governing instruments and the detailed schedule of benefits in writing, which is the subject of the companion guide.
Does a Medicare Advantage plan have to give me one?
The section carves that case out by name. Its requirements do not apply to a group health plan benefit package that provides Medicare Advantage benefits. What Medicare covers for these medications is a separate question with its own rules, and it is treated in its own guide rather than here.