Employee Benefits – HHS Says That Health Reform Requires Insurers To Use Plain Language in Describing Health Plan Benefits And Coverage

Its back! The effective date of the rule in the 2012 Affordable Care Act, which requires that (among others) participants in group health care plans must be provided with a clear, understandable description of their health care benefits and coverage, had been postponed, pending the issuance of final regulations. But now those final regulations have been issued, and the rule has been given a September 23 effective date. Here is what the Department of Health and Human Services (“HHS”) said in a News Release:

Under the rule announced today, health insurers must provide consumers with clear, consistent and comparable summary information about their health plan benefits and coverage. The new explanations, which will be available beginning, or soon after, September 23, 2012 will be a critical resource for the roughly 150 million Americans with private health insurance today. Specifically, these rules will ensure consumers have access to two key documents that will help them understand and evaluate their health insurance choices:

• A short, easy-to-understand Summary of Benefits and Coverage ( or “SBC”); and
• A uniform glossary of terms commonly used in health insurance coverage, such as “deductible” and “co-payment.”

All health plans and insurers will provide an SBC to shoppers and enrollees at important points in the enrollment process, such as upon application and at renewal.

A key feature of the SBC is a new, standardized plan comparison tool called “coverage examples,” similar to the Nutrition Facts label required for packaged foods. The coverage examples will 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 will help consumers understand and compare what they would have to pay under each plan they are considering.

The template for the Summary of Benefits and Coverage and the glossary are here. The final regulations are here. For more information on the final regulations, visit here.