How Do I Read an SBC?

Do you know what your health insurance covers if you need it? You will if you get familiar with your Summary of Benefits and Coverage, or SBC. 

It is important to know how to read an SBC because it’s the key to your plan, says Stephanie Rosenberger, Director of Client Services at KIG. “It is a high-level summary explaining how a plan works.”  

But “the SBC can be confusing,” she says. “SBCs are standard across carriers, which helps, but the way the template is laid out can mislead you. For instance, for a surgery, it may read ‘no charge’ or $0, but there is fine print at the top of the page that reads ‘all services are after deductible unless otherwise noted.’ So really this surgery is a deductible expense. You can be misled into thinking it does not have a charge. If you are preparing for a high-cost procedure or treatment plan, the SBC will break out your expected charges.” 

Insurance companies are required to provide you with both a short, plain-language SBC and a glossary of terms used in health coverage and medical care. This includes upon application, upon renewal and upon request. The requirement to distribute an SBC to plan participants began in 2012, as a part of the Affordable Care Act (ACA).

The basics 

What is my plan type? 

The type of plan, such as a PPO, is listed along with the coverage period at the top of the document. 

What is my deductible? 

Generally, you must pay all of the costs from providers up to the deductible amount before the plan begins to pay. Each family member must meet their own deductible until the total amount of deductible expenses paid by all family members meets the family deductible. 

Example: $500 individual/$1,500 family 

Are there services covered before I meet my deductible? 

Yes, preventive care and primary care services are covered, but a copayment or coinsurance may apply. 

What is the out-of-pocket limit? 

This is the most you could pay in a year for covered services. Like with deductibles, family members have to meet their own out-of-pocket limits. 

Example: $2,500 individual/$5,000 family for in-network providers; $4,000/$8,000 for out-of-network providers 

What is not included in the out-of-pocket limit? 

Copays for certain services and premiums and balance billing. Even though you pay these expenses, they don’t count toward the limit. 

Do I need a referral to see a specialist? 

Most plans will pay some or all of the costs to see a specialist, but only if you get a referral from your primary care physician first. 

For a glossary of terms, click here.  

Specifics 

An SBC is generally broken down into sections: 

• Preventive services: health screenings/exams, immunizations, well checkups, women’s care
  
• Covered services: observation stays, maternity, hospital services, emergency services, surgery, provider services, diagnostics, rehabilitation, medical therapy, pain management, behavioral health andmore 

Lastly, the SBC spells out copays for retail, specialty and mail-order prescription drugs in different tiers. The tiers represent generics (1), preferred brand-name drugs (2), nonpreferred brand-name drugs (3) and specialty drugs (4). These are usually listed from cheapest to most expensive. 

There are two amounts listed for each service: one for a participating (in-network) provider, and one for a nonparticipating (out-of-network provider). The cost of the latter will always be higher. Typically, most SBCs show the copay and coinsurance costs after your deductible has been met. 

Good to know 

Sometimes an SBC will list some of the services that are not covered or limited by the health care plan. Look for a section called “limitations, exceptions and other important information.” 

It is always a good idea to check the SBC to determine whether you need preauthorization for a particular service or procedure, Stephanie says, and cautions: Don’t rely on the insurance company to do it for you. 

Here’s an example of what a generic SBC looks like. 

And, if you still have questions, there is usually a toll-free phone number listed on the first page of the SBC. 

Related: How to Read an Explanation of Benefits.