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On Feb. 9, 2012, three federal agencies issued a final rule under the Patient Protection and Affordable Care Act that will require U.S. health insurers and group health plans to provide concise and comprehensible information about health plan benefits and coverage to current and potential health plan participants, for plan years beginning after the fall 2012 open enrollment season.
final rule, published in the
Federal Register on Feb. 14, 2012, is intended to make it easier for consumers to compare one plan directly to another. It finalizes a
proposed rule issued in August 2011. In November 2011, the U.S. departments of Health and Human Services (HHS), Labor, and Treasury announced a delay of the original March 23, 2012, statutory deadline for distributing a Summary of Benefits and Coverage, pending issuance of a final rule.
“All consumers, for the first time, will really be able to clearly comprehend the sometimes confusing language insurance plans often use in marketing,” said HHS Secretary Kathleen Sebelius in a released statement. “This will give
them a new edge in deciding which plan will best suit their needs and those of their families or employees.”
However, not everyone welcomed the new rule. “The final regulation on the Summary of Benefits and Coverage makes some important improvements over the preliminary rule, but additional time and flexibility are needed to avoid imposing costs that outweigh the benefits to consumers," commented Karen Ignagni, president and CEO of America’s Health Insurance Plans, an industry group.
The new explanations are to be made available to participants and beneficiaries who enroll or re-enroll in group health coverage through open enrollment periods starting after Sept 22, 2012. For disclosures to participants and beneficiaries who enroll in group health plan coverage other than through an open enrollment period (including those newly eligible for coverage and special enrollees), the requirements apply beginning on the first day of the plan year starting after Sept. 22, 2012.
Specifically, the final rule mandates that consumers have access to two key documents that will help them understand and evaluate their health insurance choices:
“The rule requires that a separate document be available for each potential family size and for every possible benefit design option, including different cost-sharing levels, prescription drug formularies and network designs," said Ignagni, who expressed concern that requiring a separate document for each coverage scenario would significantly increase administrative costs.
A key feature of the SBC is a standardized plan comparison tool called “coverage examples.” The coverage examples are meant to illustrate sample medical situations and describe how much coverage the plan would provide in an event such as having a baby (normal delivery) or managing Type II diabetes (routine maintenance, well-controlled). These examples are intended to help consumers understand and compare what they would have to pay under each plan they are considering.
Format and Appearance
The rule specifies requirements related to the appearance of the SBC, which generally must be presented in a uniform format, cannot exceed four double-sided pages and must not include print smaller than a 12-point font.
Templates and Samples
HHS's Centers for Medicaid and Medicare Services has posted a sample
SBC template, a sample
completed SBC and a sample
Uniform Glossary, along with additional
SBC instructions and guidance. In addition, HHS posted a new
Update: On April 23, 2013, the DOL
posted a new set of frequently asked questions that extends certain safe harbors for required summaries of benefits and coverage (SBCs). The DOL also provided an updated SBC template and sample completed form. See the
SHRM Online article
DOL Extends Safe Harbors for SBCs.
is an online editor/manager for SHRM.
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