Do you know how to read your Summary of Benefits and Coverage (or SBC) document? This is a consumer-directed document that describes the coverage provided by a health insurance plan. Devoid of legal jargon, this summary helps clarify a plan’s cost-sharing structure without the need to digest an insurer’s lengthy fine print. the sbc also makes it easy to compare plans during open enrollment. Under the Affordable Care Act, all insurance providers must provide SBCs for all of their plans. The easiest way to get your sbc is probably by contacting your employer’s human resources department, 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 designed to help consumers, these plan documents can still be confusing. read on for a top-to-bottom rundown of the highlights you need to know about. *note: the images below represent a sample plan only, they are not representative of your specific coverage.
Header: At the top of each sbc is a header that provides the name of the insurer, official plan name, coverage period, election level, and plan type .
- check your header to make sure you have the correct sbc.
- verify coverage dates, as they are often not simply the calendar year.
- Please note the level of choice (who is covered by the plan). Although the SBC often describes coverage for individuals and families, you should know who you are insuring as you read the cost-sharing structure.
- The plan type acronym will indicate what type of provider network will be available to you under the policy; see our explanation of these abbreviations here.
- the structure of the plan
- how much you can expect to be covered before your deductible reaches your out-of-pocket limit
- what types of providers are covered
important questions: this section is where you should look to get an idea of:
Unless you have specific medical needs in mind, this will probably be the most important section of the sbc to examine when comparing plans.
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Common Medical Events: This chart shows the cost of specific visits and procedures under the plan. These expenses are grouped under common medical needs, such as office visits and tests. what you will pay is provided for most (but not all) forms of care. If your plan has a network of providers, this chart will also tell you how much it costs to see an out-of-network provider. 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 laboratories used by that provider may not be.
Easily overlooked: Don’t forget to check the top ribbon of the Common Medical Events section to confirm the cost-sharing structure. Often, the “what you’ll pay” column describes only your cost sharing after you meet the deductible. When reviewing 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 disclaimer page, please refer to it for important information on how costs are covered.
Excluded Services and Other Covered Services: This section shows two things:
- Excluded Services – Services your plan generally doesn’t cover
- Other Covered Services: Services that don’t fit into the “common medical events” section, but are still relatively common. although it is not an exhaustive list.
Be careful if this section crosses a page break in the sbc. when this happens, it can be easy to confuse excluded services with 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 may not need to read them when selecting a plan, but it’s good to know where this information is in case you run into problems with your insurance. Topics include:
- Your rights to continue coverage
- your complaint and appeal rights
- minimum essential coverage and value standards: Your plan must meet the federal essential coverage and value standards, you’re eligible for a tax credit if you don’t!
- language access services
- non-discrimination and accessibility requirements
Coverage Examples: To help make the plan structure easier to digest, each sbc provides some example scenarios of how the plan would cover a procedure or treatment. these scenarios help you see how different aspects of the plan fit together. They also show you how to think about estimating your own expenses, especially if you’re new to the details of health insurance. however, keep in mind that your expenses will be different from the examples.
Tip: Consider participating in myhealthmath to receive a personalized comparative savings estimate of your health plan options based on your anticipated medical usage!
a helpful explanation:
Plan Year vs. Calendar Year: A plan year (your period of coverage) is often different from a calendar year. a plan year doesn’t always start on January 1.
The plan year tells you when your deductible renews, so you know in advance when you’ll have to start paying your medical expenses again (assuming you met the deductible from the previous plan year). Also, it’s 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 you with a glossary of terms specific to your sbc. All underlined terms in the SBC should be included in this glossary, but the Department of Labor provides a general example here. Always check your insurance provider’s documents for the most specific and up-to-date information.
Looking for more resources for open enrollment employees? Download our Open Enrollment Employee Resource Guide. shares an easy-to-understand insurance guide to help employees succeed in the open enrollment year.