PPACA regs require simple summaries of health plan options

The Obama administration last week issued regulations intended to improve employees’ understanding of their health plan options, as called for by the Patient Protection and Affordable Care Act.

The rules, which will require employers and health insurance companies to have straightforward information readily available for new and existing plan members, should be a point of conversation between health plan advisers and clients in the latter part of this year and early next.

The Health and Human Services Department says that two new forms, scheduled to be available in March 23, 2012, will assist more than 180 million private health insurance consumers to better understand their coverage before they buy or upon request. Those forms are:

* A “summary of benefits and coverage” for consumers.

* A glossary of terms that will include words commonly used when referring to policies such as “deductible” and “co-pay.”

“Today, many consumers don’t have easy access to information in plain English to help them understand the differences in the coverage and benefits provided by different health plans,” says HHS Secretary Kathleen Sebelius. “Thanks to the Affordable Care Act, that will change.”

“Workers and their families need clear and understandable information regarding their health coverage," adds Secretary of Labor Hilda L. Solis. "Today's proposal is a common-sense step that will help workers quickly and easily compare different coverage options, in order to make more informed decisions."

A proposed template indicates the summary of benefits and coverage will include “coverage examples” that will act much like a nutrition facts label seen on packaged foods. This new rule can be found on paper or in an electronic form will be used as a comparison tool wherein employers and insurers will itemize costs for certain services needed by consumers.

Meanwhile, the uniform glossary will replace the jargon that government officials claim “makes it impossible to compare plans or figure out what is covered.”

Also included in the proposed rules health plans and issuers are required to give a 60 day notice before significant modifications are made in a plan or coverage during the plan or policy year.

HHS estimates the 2012 compliance costs for the new rules will be $58 million.

The summary of benefits and coverage and the glossary of terms were developed through a public process led by the National Association of Insurance Commissioners and a working group composed of stakeholders. HHS welcomes further input on the proposed rules before they go into use starting in March.

The public can file comments about the proposed rules by Oct. 21.