ACA Regulations Unveiled: Insurers Must Use Clear, Consistent Language
2/10/2012 10:47 AM
In an effort to help consumers make more informed health insurance decisions, the Obama administration released new rules requiring insurers to provide clear, consistent and comparable summary information about their health plan benefits and coverage.
Insurers must communicate what each health plan will cover, what limitations or conditions will apply, and what each service will cost, all in standardized and straightforward language.
“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. “This will give them a new edge in deciding which plan will best suit their needs and those of their families or employees.”
The rules came in the form of a 150-page Summary of Benefits & Coverage (SBC) final rule and an 18-page batch of SBC compliance guidance from three agencies, the Centers for Medicare & Medicaid Services (CMS), an arm of the U.S. Department of Health and Human Services; the Employee Benefits Security Administration, an arm of the U.S. Labor Department; and the Internal Revenue Service, an arm of the U.S. Treasury Department.
The agencies developed the SBC regulations to implement Section 2715 of the Patient Protection and Affordable Care Act of 2010 (PPACA), which called for the government to create a standardized health plan description document, to help consumers do a better job of shopping for coverage, by March 2012.
Under the law and the new regulations, consumers will get SBCs when they apply for coverage or enrollment in group plans. Consumers also can get SBCs upon request. The SBC will include a summary of basic plan features, along with coverage examples that show how a plan would work if an enrollee had a baby, were managing Type II diabetes, or were dealing with other common illnesses, chronic conditions or life events.
“One of the primary purposes of this is to ensure apple-to-apples comparison across plans,” said Steve Larsen, the senior Department of Health and Human Services official overseeing insurance regulation.
The changes are designed to allow consumers to assess how much their care would cost under different insurance policies, and to simplify the process of evaluating health plans, a task which now can involve reviewing hundreds of pages published by insurers.
Summary of Benefits & Coverage materials must be issued for most HRA plans and some Health Care FSAs. There are HRA plans, such as plans that only cover dental or vision, that will be excepted from the regulations. And there are several types of Health Care FSAs that will not be expected to comply with the SBC rules. Every insurer will be expected to be diligent in determining whether their specific plans require an SBC.
The SBC requirements will take effect Sept. 23 for individual coverage and for group plan open enrollment periods that begin on or after Sept. 23, according to the final rule.
NOTE: Employee Benefits Corporation is closely reviewing each rule and regulation and monitoring every legislative change. We are dedicated to keeping you informed and prepared to stay compliant for your specific situation.