Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
By Sara Hansard
Dec. 22 — Three federal agencies issued a proposed rule that would make changes to the summary of benefits and coverage and the uniform glossary health plans must provide consumers under the Affordable Care Act.
The Internal Revenue Service, the Department of Labor's Employee Benefits Security Administration and the Centers for Medicare & Medicaid Services on Dec. 22 released the proposed rule (REG-145878-14, RIN 1545-BM53, CMS-9938-P), and the Department of Labor posted templates, instructions and related materials. The proposed rule is scheduled for publication in the Dec. 30 Federal Register, and comments are due 60 days after publication.
The rule is designed “to help people who are shopping for health insurance coverage better understand their options,” according to a release from the CMS. All group health plans and issuers are required to provide consumers with a standardized, brief summary of what a health insurance policy or employer plan covers under the ACA so that consumers can make comparisons when shopping for coverage, it said.
The proposed rule would add features to make the summary of benefits and coverage (SBC) “even more user-friendly,” the CMS said. The proposed rule would “significantly streamline and shorten” the SBC, reducing it from about four double-sided pages to two-and-a-half, it said. Improvements have been made to the uniform glossary to help consumers understand insurance terms, it said.
Consumer testing has shown that coverage examples on the SBC, which demonstrate how a plan's deductibles and other cost sharing apply to having a baby and managing diabetes type 2, are the most useful features, the CMS said. The proposed rule would add an additional coverage example showing how cost sharing related to a foot fracture with an emergency room visit, it said.
The agencies also proposed updating pricing data used in the coverage examples to reflect more accurate charges experienced by consumers, it said.
The form would be shortened by removing information not required by the law that has been identified through consumer testing to be less relevant, the CMS said.
The agency said the revised SBC also would assist employers in comparing plan options for their businesses. The proposed rule would clarify and streamline the requirements health insurers and group health plans must follow. For example, the rule proposes new ways to reduce duplication to group health plans and student health plans when another party assumes responsibility to provide the SBC to enrollees, it said.
If finalized the new requirements would be implemented for plan years on or after Sept. 1, 2015.
The proposed changes would amend final regulations published in February 2012, according to a fact sheet.
The fact sheet said the agencies proposed making changes to the content of the SBC and the uniform glossary to reflect ACA market reforms, such as removing references to annual limits for essential health benefits and pre-existing condition exclusions, which have been barred by the law.
Disclosures relating to continuation of coverage, minimum essential coverage and minimum value would be revised to provide more useful information to consumers, the fact sheet said.
In the uniform glossary, some definitions would be revised and some new definitions would be added for insurance concepts, such as “claim,” “screening,” “referral” and “specialty drug,” as well as ACA terms such as “individual responsibility requirement,” “minimum value” and “cost-sharing reductions,” the fact sheet said.
In addition, individual market qualified health plan issuers would be required to disclose coverage of abortion on the SBC, the fact sheet said. Although the 2012 final regulations didn't specifically address that disclosure on the SBC, Section 1303 of the ACA and implementing regulations for that section “already required issuers of individual market qualified health plans to disclose coverage of non-excepted abortion services on the SBC provided at the time of enrollment,” it said.
The SBC requirements wouldn't apply to Medicare Advantage plans, the fact sheet said.
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Text of the proposed rule is at http://op.bna.com/hl.nsf/r?Open=bbrk-9s2t6d. Department of Labor materials are available at http://www.dol.gov/ebsa/healthreform/regulations/summaryofbenefits.html. A fact sheet on the proposed rules is at http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/SBC-Proposed-Rule-Fact-Sheet-122214.pdf.
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