Do you know how to read your Summary of Benefits and Coverage document (or SBC)? This is a consumer facing document outlining the coverage provided by a health insurance plan. Devoid of legalese, this summary helps to clarify the cost-sharing structure of a plan without the need to digest lengthy fine print from an insurer. The SBC also makes it easier to compare plans during open enrollment. Under the Affordable Care Act, all insurance providers are required to provide SBCs for all their plans. The easiest way to obtain your SBC is probably by contacting the HR department of your employer, but they should always be available to you no matter who provides your insurance.
Tips on how to read your Summary of Benefits and Coverage:
While they are designed to help consumers out, these plan documents can still be confusing. Keep reading for a top-to-bottom rundown of the highlights you should know. *Note: The following images only depict a sample plan, they are not representative of your specific coverage.
Header: At the top of each SBC is a header that gives the insurer’s name, the official plan name, the coverage period, election tier, and plan type.
- Check your header to make sure you have the right SBC.
- Check the coverage dates, as these are often not simply the calendar year.
- Note the election tier (who the plan covers). Although the SBC often describes coverage for individuals and family, you should know who you are insuring as you read through the cost sharing structure.
- The plan type acronym will indicate what sort of provider network you will have available to you under the policy, see our explanation of these abbreviations here.
Important Questions: This section is where you look to get a sense of:
- the plan’s structure
- deductibles
- how much you can expect to be covered before your deductible is met your out-of-pocket limit
- what types of providers are covered
Unless you have specific medical needs in mind, this will probably be the most important section of the SBC to examine when comparing plans.
Common Medical Events: This table shows the cost of specific visits and procedures under the plan. These expenses are grouped into common medical needs, such as office visits and having tests. What you will pay is provided for most (but not all) forms of care. If your plan has a provider network, this table will also tell you how much it costs to see a provider outside of the network. Pay attention to the limitations’ column, as these exceptions are often substantial. For example, many patients forget that while a provider may be in their network, the clinical labs used by that provider might not be.
Easily Overlooked: Don’t forget to examine the top ribbon of the Common Medical Events section to confirm the cost sharing structure. Often the “what you will pay” column describes only the cost sharing after the deductible has been met. When reviewing the services, look for categories that say, “deductible does not apply.” With these services, your insurer shares the cost right away! If your SBC has a clarification page, check it for important information about how costs are covered.
Excluded Services and Other Covered Services: This section shows two things:
- Excluded services: services that your plan generally does not cover
- Other covered services: services that don’t fit into the “Common Medical Events” section but are still relatively common. It is not an exhaustive list though.
Be careful if this section crosses a page break in the SBC. When this happens, it can be easy to mistake the excluded services for covered services and vice versa!
Consumer Protection: These paragraphs are for your protection. They detail your rights and describe how to file a complaint. You might not need to read these while selecting a plan, but it is good to know where this information is should you run into problems with your insurance. Topics include:
- Your rights to continue coverage
- Your grievance and appeals rights
- Minimum essential coverage and value standards: Your plan should meet federal standards for essential coverage and value, you are eligible for tax credit if it does not!
- Language access services
- Nondiscrimination and accessibility requirements
Coverage Examples: To help make the structure of the plan easier to digest, each SBC provides a few example scenarios of how a procedure or treatment would be covered by the plan. These scenarios help you see how different aspects of the plan fit together. They also show you how to think about generating an estimate of your own expenses, especially if you are new to the details of health insurance. Remember though, your expenses will be different than the examples.
Hint: Consider engaging with MyHealthMath to receive a personalized comparative savings estimate of your health plan options based on your anticipated medical usage!
A Useful Explanation:
Plan year vs Calendar year: A plan year (your coverage period) is often different than a calendar year. A plan year does not always start on Jan 1.
Plan year tells you when your deductible renews, so you know in advance when you will have to start paying your medical expenses again (assuming you hit the deductible for the previous plan year). Additionally, it is important to distinguish between plan year and calendar year because HSA and FSA contributions are regulated by calendar year even if your plan year is different.
If you need further guidance, your insurer should provide a glossary of terms specific to your SBC. All terms underlined in the SBC should be included in this glossary, but the department of labor provides a general example here. Always refer to your insurance provider’s documents for the most specific and up-to-date information.
Looking for more open enrollment employee resources? Download our Open Enrollment Employee Resource Guide. It shares easy-to-understand insurance guidance that will help employees ace open enrollment year.
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