• Round 1 of SBCs is over, but only the beginning
  • Brute force and overtime might have worked for last year, but is not an effective long-term solution
  • Round 2 (i.e., 2013) will include:
    • Changes to the Coverage Calculator
    • Need to produce a consolidated SBC (including carved out benefits)
    • The arrival and application of Compliance penalties

Things to focus on in 2013 include:

  • Institutionalize a long-term operating model:
    • Predictable, repeatable process aligned with compliance
    • Skilled SBC production resources
    • Leverage accurate technology
  • Define a Group feedback approach
  • Prepare for and incorporate 2013 regulations prior to the busy enrollment season

On April 16, 2012, final regulations were passed for the Summary of Benefits and Coverage (SBC), a major component of the Patient Protection and Affordable Care Act (PPACA). Knowledge of this information allowed you to begin to plan an immediate solution for the 2012/2013
renewal season. At Himes Consulting Group, we refer to this as Round 1.

  • How did you survive Round 1?
  • What changes did you make along the way that increased your productivity?
  • Are you ready for Round 2 in 2013?

Key Learnings from Round 1:

Round 1, if nothing else, was a learning experience for all stakeholders. As the peak renewal season progressed, there were many Key Learnings:

  • The regulations allowed for some latitude as long as you were making a “good faith effort” to comply
  • Brute force, temp resources, and long hours many times was the only solution that worked in attempting to meet compliance requirements
  • Education was required not only on the Payer side to produce the SBCs but also in the consultant, broker and Group communities to receive and distribute the most accurate SBCs to its members
  • Many organizations are much smarter now about SBC production, resource needs, and estimated volumes

What Now? How to Avoid the Knockout Punch!

We know that many things are about to change with regard to SBCs during Round 2 (the 2013 timeframe):

  • Compliance will be enforced and penalties will be available to be levied ($1,000 per occurrence at the member level)
  • Template changes are guaranteed – Calculator, coverage examples, others
  • The brute-force method is not a sustainable operating model as it:
    • Distracts resources from doing their critical, everyday jobs (sales, group support, etc)
    • Creates overall morale issues over time

To avoid additional problems during Round 2 Himes Consulting Group recommends the following:

  • Institutionalize a long-term operating model that supports the current regulations:
    • Implement a repeatable and predictable production process that aligns with compliance requirements
    • Include skilled SBC production resources
    • Leverage accurate technology
  • Define a Group feedback approach that allows for two-way communication, but does not slow down the process which could eliminate the opportunity to be compliant
  • Prepare for and incorporate 2013 regulations prior to the busy enrollment season

Round 2 Details:

Institutionalized long-term operating model

Using 2012 experience, define the operating model that your organization can implement to support SBC production during peak business periods (e.g., Q3 and Q4). Key activities to determine your ideal model include:


  • How much volume should be expected for 2013?
    • Is what was experienced in 2012 a good indicator of the expected 2013 volume?
    • What impact will growth have on the numbers of SBCs required (Reminder: SBCs are plan-specific, not produced at the Group or Sub-Group level)?
  • How similar or different will the number of iterations of SBCs be relative to your 2012 experience based on 2012 statistics and knowledge maturity of your Consultant, Broker and Group population?
  • What impact does your book of business has on your ability to automate the process?
    • Standard products and plans ——> Opportunity for high degree of automation
    • ASO or heavily custom products and plans ——-> Mix of automation and manual manipulation to complete the SBC
    • Estimate effort by funding type. Funding type typically drives level of complexity and manual intervention requirements


  • How much and what types of resources will you need to support production? Be sure to include the following when determining the staffing needs:
    • Initial SBC production
    • Customer contact and feedback time and energy
    • Quality control
    • SBC finalization (i.e., making the SBC available to members via the Web or Customer Service)


  • What is the ideal approach to resolve this staffing dilemma for your organization??
    • Absorb internally??
    • Absorb and Hire??
    • Execute with temporary resources (Hire, train, execute, let go, repeat annually)??
    • Outsource the production of SBCs to a qualified third-party vendor??


  • What is the ideal organizational model to support the process and these resources within your organization
    • Centralized vs. Decentralized by funding type or division
    • Solid line or dotted line to Marketing?? Operations??

Define the Group Feedback process
One complexity as Payors, Consultants, Brokers and Groups go through the learning curve of the SBC regulations is when and how to incorporate feedback into the SBCs. Feedback can be received for several reasons, including but not limited to:

  • Manual entry errors that result in an inaccurate SBC
  • A customer’s desire to wordsmith the SBC to their preferred language
  • A customer with limited understanding of the regulations wanting to change mandated formatting or language.

Each of these presents it own challenges and can be addressed by:

  • Defining the Group feedback process (when will the SBC be received, what is the turnaround time, what mechanisms are in place to educate stakeholders without risking non-compliance, etc)
  • Communicating this process to the Groups during the new business and renewal processes
  • Developing an operating model that supports these activities (i.e., honoring your side of the commitment)

Prepare for and execute the 2013 regulations
One thing that is guaranteed is that things will change with regards to SBC production. New regulations will come out and existing regulations will change. What we know today is that for 2013:

  • Health insurers will need to customize the coverage calculator with the potential for adding additional Coverage Examples. This process will be intensive and will require expert-level knowledge of the calculator, company policies and its benefit payment logic
  • A consolidated SBC will need to be produced that includes carved out benefits (Rx, Vision, Dental, other) on one SBC delivered to the member.

These changes plus other potential SBC template revisions are likely going to be finalized in early to mid 2013.
Don’t let Round 2 of SBC regulations deliver the knockout punch to your organization. Take the lessons learned from Round 1 and institutionalize your SBC production solution. As experts in operations improvement, process design and definition, organization structure, SBC calculator functioning and SBC regulations, Himes Consulting Group has the expertise to convert your 2012 SBC experience into a predictable, repeatable, battle-tested operation.

For additional information on SBCs and the upcoming regulations, contact Rob Himes at 312-961-6656 or robhimes@himesconsulting.com.