Employee Benefits-Clear and Consistent Disclosure Is Coming For Health Benefits

The recently enacted Affordable Care Act requires that, on and after March 23, 2012, group health plans (among others) must provide their participants with clear, consistent and comparable summaries of the benefits and coverage provided under those plans. The government (particularly, the Departments of the Treasury, Labor and Health and Human Services ) has now issued proposed regulations pertaining to these summaries. An on-line Fact Sheet says the following about these proposed rules.

Under the proposed regulations, participants would have access to at least two forms that will help them understand and evaluate their health insurance choices. These forms include:
• An easy to understand Summary of Benefits and Coverage; and
• A uniform glossary of terms commonly used in health insurance coverage such as “deductible” and “co-pay”.

The proposed summary form and glossary were developed through a public process led by the National Association of Insurance Commissioners (“NAIC”) and others. Further input, prior to the March 23, 2012 effective date, is welcome.

The Summary of Benefits and Coverage will be a concise document detailing, in plain language, simple and consistent information about health plan benefits and coverage. The rules are intended to ensure that this summary will help participants better understand the coverage they have and, for the first time, allow them to easily compare different coverage options. It will summarize the key features of the plan or coverage, such as the covered benefits, cost-sharing provisions, and coverage limitations and exceptions. The Summary of Benefits and Coverage will include a new, standardized health plan comparison tool for participants known as “Coverage Examples,” much like the Nutrition Facts label required for packaged foods. The Coverage Examples would illustrate what proportion of care expenses the plan would cover for three common benefits scenarios–having a baby, treating breast cancer, and managing diabetes.

Under the proposed regulations, beginning on March 23, 2012, all group health plans will provide the Summary of Benefits and Coverage and the uniform glossary to participants. The plan will automatically provide a Summary of Benefits and Coverage to a participant prior to enrolling in the plan, and 30 days prior to the start of each plan year. Further, people enrolled in a group health plan must be notified of any significant changes to the terms of coverage, as reflected in the Summary of Benefits and Coverage, at least 60 days prior to the effective date of the change. A participant can request a copy of the Summary of Benefits and Coverage and must receive it within seven days. The uniform glossary will also be made available upon request, as well as in an online link provided by the plan.. The Departments of Health and Human Services and Labor will also post the glossary on their websites. The Summary of Benefits and Coverage may be provided to participants in either paper or electronic form if certain consumer safeguards are met. Therefore, it may be possible for a plan to post the Summary of Benefits and Coverage on its website or on HealthCare.gov, or provide it by email.

The proposed regulations and a sample Summary of Benefits and Coverage with various instructions may be found here.