Summary of Benefits and Coverage (SBC)
An SBC (Summary of Benefits and Coverage) serves as a guide provided by your health insurance company. It presents a clear breakdown of what medical services are included in your insurance plan and how much those services might cost you.
The first page of a medical SBC shows essential information like the insurance carrier's name, the plan's name, and the duration of coverage. The following sections outline different types of medical services covered by the plan along with their associated expenses.
Additionally, the document provides examples of medical situations, such as pregnancy, fractures, and diabetes management, along with the potential costs you might face. This way, an SBC helps you understand and make informed decisions about your healthcare options.
Understanding the terms covered by your SBC
Plan Types
- PPO
A Preferred Provider Organization (PPO) plan offers the freedom to see any in-network healthcare provider without a primary care physician's referral. While PPOs include out-of-network coverage, it typically requires meeting a higher deductible. Opting for in-network providers results in the lowest costs. PPOs, due to their extensive network flexibility, tend to have higher costs compared to other plan types.
- HMO
A Health Maintenance Organization (HMO) is typically a more affordable plan option, offering a narrower network of providers. To see a specialist, you usually need a referral from your primary care physician. HMOs typically do not cover services outside your state or network, except in emergencies.
- EPO
An Exclusive Provider Organization (EPO) health plan enables you to receive in-network treatment without requiring a referral from a primary care physician for specialist visits. EPOs do not cover out-of-network care, except during emergencies.
- POS
A Point of Service (POS) plan is a hybrid that combines aspects of both PPO and HMO plans. Often, it necessitates visiting a primary care physician before seeing a specialist. While POS plans might offer limited coverage for out-of-network treatment, choosing in-network providers typically results in lower costs.
Plan Categories
Health insurance plans are categorized into Bronze, Silver, Gold, and Platinum tiers, which indicate how much the insurance company typically contributes towards your in-network healthcare expenses. Plans with greater coverage have higher premiums, while those with lower coverage come with lower costs.
As mandated by the Affordable Care Act, each metal tier must cover a specific percentage of your healthcare costs:
Bronze plans must cover a minimum of 60% of essential health benefits. These plans have the lowest premiums but offer less coverage.
Silver plans must cover at least 70% of essential health benefits, unless you qualify for a cost-sharing reduction. This tier can vary based on income, offering coverage of about 73%, 87%, or 94% of healthcare costs.
Gold plans are required to cover at least 80% of essential health benefits.
Platinum plans must cover a minimum of 90% of essential health benefits. These plans provide extensive coverage but come with higher premiums.
Please note that Silver plans can offer adjusted coverage percentages based on your eligibility for cost-sharing reduction subsidies.
High Deductible Health Plan (HDHP)
A High Deductible Health Plan (HDHP) is an insurance option with lower premiums and a higher deductible. Opting for an HDHP allows you to save pre-tax funds in a Health Savings Account (HSA) alongside the plan's coverage. An HSA is funded with pre-tax payroll deductions and can be used for eligible medical costs.
If your plan's name contains "HDHP" or "HSA," as indicated in your SBC, it's a High Deductible Health Plan. Although specific benefits vary, many HDHPs only cover preventive care until you meet the deductible. Until then, expenses like specialist visits and prescriptions are fully paid out of pocket. The benefit is lower premiums, and your pre-tax HSA funds can be used for qualifying out-of-pocket expenses.
Provider Network
Once you determine whether your plan falls under PPO, POS, EPO, or HMO, it's crucial to identify your provider network. The provider network consists of hospitals, doctors, specialists, and pharmacies that have agreed upon contracted rates for their services. Opting for in-network providers usually incurs lower costs.
To locate your network, examine the plan name mentioned in your SBC (for instance, Anthem BlueCard PPO, UnitedHealthcare Select Plus network, Humana HMO Select, Kaiser HMO).
Before visiting a doctor or healthcare facility, use your carrier's provider search tool to identify in-network options. You can search for the "[carrier name] provider search" in your web browser, access your member portal, or directly contact your carrier.
Emergency care
Even if your plan doesn't typically encompass out-of-state or out-of-network care, your insurance provider cannot impose higher charges for emergency room services received at an out-of-network hospital. The cost will be identical to what you would pay for the emergency treatment if it were in-network. Emergency care pertains to situations where immediate treatment is essential to prevent the deterioration of an emergency medical condition. If the circumstance demands immediate attention to avert severe consequences or death, it qualifies as an emergency.
Out-of-network care
Inside your plan's network, the costs for hospitals, doctors, specialists, and pharmacies are set in advance through negotiations with your carrier. Consequently, opting for in-network services leads to reduced expenses for you.
Should your plan cover out-of-network care, there's an additional, higher deductible and out-of-pocket maximum for those services. You'll be responsible for the full cost of out-of-network care until the elevated deductible is met (except for emergency situations).
Costs
- Deductible
A deductible is the initial amount you pay for covered healthcare services before your insurance starts covering costs. After you meet the deductible, your carrier shares the cost of in-network care through copays or coinsurance.
Certain plans cover specific services before the deductible. If listed in your SBC, you pay only the coinsurance or copay for those services.
Remember when the deductible resets; it's either at the calendar year's start or the plan year's start, depending on your group coverage setup. You must fulfill the deductible again after the reset for coverage to kick in.
- Out-of-pocket maximum
The out-of-pocket maximum is the highest yearly payment for covered services. Once reached, copays and coinsurance are waived. It resets with your deductible, not including out-of-network care if not covered.
- Preventive Care
Preventive care maintains health and prevents illness. Under the Affordable Care Act, plans must cover certain services at no cost, like annual checkups, vaccinations, screenings, and counseling. No co-pays or deductibles are needed.
- Pre-authorization
Pre-authorization is your insurance carrier's approval for coverage of medical treatment or medication before receiving it. Some services might need pre-authorization, so collaborate with your healthcare provider to ensure proper authorization, maximizing your insurance benefits.
- Prescription drug coverage
Insurance carriers have drug formularies with tiers indicating your costs. Your SBC lists copays and coinsurance. Check the tier and cost via the carrier's portal or contacting them for in-network pharmacies.
- Company contribution
The contribution scheme refers to the employer's monetary contribution to an employee's benefits, specified in the contract with the insurance carrier. This amount remains fixed until benefits are renewed.
You can find the contribution information in Niural’s Benefits section.
Employers with under 50 full-time employees aren't bound by a minimum contribution. Companies with 50+ employees often follow the Affordable Care Act's employer mandate, including the "Employer Responsibility" provision.
When the company contributes less than 100% of premiums, the remaining employee portion is collected via payroll deductions, accumulating for a lump sum insurance premium payment from the company's bank account.
- Insurance Claim
An insurance claim is a payment request for covered items or services, submitted by you or your doctor to your carrier. Contact your carrier to file a claim—many offer online submission through their portal or you can call their member services for guidance.
Once the carrier receives a claim, they process it based on your plan. You'll then get an Explanation of Benefits outlining what was covered and what you're responsible for paying.
- Premiums
A premium is your monthly enrollment cost for an insurance plan. If your company covers part, you pay the rest via payroll deductions.
- Waiting Period
A waiting period is the time new eligible employees wait to access benefits after joining. It's defined in the contract with the carrier and typically aligns with the "1st of the month after hire" rule. Waiting periods reset with plan renewal, affecting all new hires.