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Employers sponsoring ERISA-covered group health plans are responsible for providing several required participant disclosures. Two of the most important—and most often confused—are the Summary of Benefits and Coverage (SBC) and the Summary Plan Description (SPD).
Although both documents help employees understand their health coverage, they serve different purposes and are required under different federal laws. Providing one document does not satisfy the requirement to provide the other.
Summary of Benefits and Coverage
The Summary of Benefits and Coverage (SBC) is required under the Affordable Care Act (ACA) and is designed to help employees compare health plan options using a standardized format.
The SBC provides a high-level overview of a health plan’s key features, including:
- Covered benefits and services
- Cost-sharing provisions, such as deductibles, copayments, and coinsurance
- Coverage limitations and exclusions
- Coverage examples that illustrate how the plan may pay for common medical situations
- A reference to the Uniform Glossary, a separate standardized resource that must be made available upon request
Because most applicable group health plans must use the same standardized template, employees can more easily compare available coverage options during enrollment.
SBC Distribution Requirements
The SBC must be provided at several specific times.
- As part of written enrollment application materials during initial enrollment
- No later than the first date the participant is eligible to enroll (when no written application materials are used)
- During automatic renewal, no later than 30 days before the first day of the new plan or policy year
- Upon special enrollment, within 90 days of enrollment
- Upon request, within seven business days
- When a material modification affects SBC content, at least 60 days before the change takes effect
The SBC requirement applies to most group health plans and health insurance issuers offering group coverage. Plans covering only excepted benefits—such as dental-only or vision-only plans, most health FSAs, HSAs, and retiree-only plans—are exempt.
Summary Plan Description
The Summary Plan Description (SPD) is required under the Employee Retirement Income Security Act (ERISA) and serves as the primary communication describing how the health plan operates.
Unlike the SBC, the SPD provides detailed information about the administration of the plan, including:
- Eligibility requirements
- Enrollment and termination rules
- Plan benefits and limitations
- Participant rights and responsibilities
- Claims and appeals procedures
- Plan administrator, plan sponsor, agent for service of legal process, and funding or insurer information
- ERISA rights statement
- Continuation coverage (COBRA) rights and obligations
- Circumstances that may result in disqualification, loss, or forfeiture of benefits
HIPAA special enrollment notices may be described in the SPD if the SPD is provided at or before the time the employee is initially offered the opportunity to enroll in the plan. However, HIPAA privacy notices are a separate disclosure obligation and are not an SPD content requirement.
The SPD is intended to help participants understand not only what benefits are available, but also how the plan is administered and how to exercise their rights under ERISA.
SPD Distribution Requirements
The SPD must be furnished according to specific deadlines.
- New plans: within 120 days after the plan becomes subject to ERISA
- New participants: within 90 days after the participant first becomes covered under the plan
- Updated SPD: at least every five years if material changes have been made during that period
- If no material changes: at least every 10 years
- Summary of Material Modifications (SMM): within 210 days after the close of the plan year in which the change was adopted
- Material reductions in covered services or benefits (group health plans): within 60 days after adoption of the change
- Upon written request: within 30 days
Key Differences Between the SBC and SPD
Employer and Plan Administrator Action Items
Both the SBC and SPD are mandatory disclosures for most ERISA-covered group health plans, and each has its own timing and content requirements. ERISA duties attach to the plan administrator, as defined by ERISA section 3(16), which is often the employer but may be a different entity.
Plan administrators should:
- Confirm both documents are current and reflect the plan’s design.
- Ensure the SBC is distributed during open enrollment, upon initial eligibility, upon special enrollment, and at least 60 days before any material modification affecting SBC content.
- Provide SPDs to newly covered participants within 90 days and distribute updated SPDs or SMMs when material plan changes occur, following the applicable deadlines.
- Coordinate with insurance carriers, third-party administrators, and benefits consultants to determine who prepares each document, while remembering that the plan administrator ultimately remains responsible for compliance.
This information has been prepared by UBA. It is general information and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.
