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PPACA: Subgroup Works to Define Terms

By Allison Bell

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Regulators are putting together a glossary of insurance-related terms aimed at health coverage consumers.

The Consumer Information Subgroup at the National Association of Insurance Commissioners, Kansas City, Mo., is developing the health insurance consumer glossary to help implement a consumer information provision in the Patient Protection and Affordable Care Act (PPACA).

Section 1001(5) of PPACA adds Section 2715 to the Public Health Service Act, subgroup officials say.

The section requires the federal secretary of Health and Human Services (HHS) to develop standards for a summary of benefits and coverage explanation for individual and group health insurance.

The HHS is supposed to work with the NAIC and a working group representing a wide range of interested parties to set the standards.

PPACA also has added Section 715 to the Employee Retirement Income Security Act (ERISA) and Section 9815 to the Internal Revenue Code, and those sections apply the new summary of benefits and coverage explanation requirements to group health plans and group health coverage providers, officials say.

Subgroup members are marking up draft forms that show how a hypothetic health plan might describe the plan’s key features and the scope of coverage.

A line describing premiums, for example, might say how much coverage costs per month per individual, how much it costs per month per family, and how much the employer is paying for coverage.

The subgroup also has organized a Standard Definitions Team, with 3-member units assigned to come up with proposals for consumer-friendly definitions for specific terms.

One unit, for example, is trying to define the term “deductible,” and has described a deductible as “the amount of money you must pay for health care covered by your health insurance before your health insurance begins to pay.”

The unit defining “usual, customary and reasonable fees” has described “UCR” as “the usual, customary or reasonable amount or allowance paid for an identical or similar medical service in a geographic area.”