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Life Health > Health Insurance > Your Practice

PPACA: Feds Try to Make Coverage Easier to Understand

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Federal agencies have unveiled proposals for a glossary and a summary of benefits as well as a coverage template that are supposed to make health coverage easier for consumers to understand.

The agencies – the Internal Revenue Service (IRS), the Employee Benefits Security Administration (EBSA) and the Centers for Medicare & Medicaid Services (CMS) – are preparing to publish draft benefits summary and uniform glossary regulations Monday in the Federal Register.

The agencies also will be publishing a request for comments on the benefits summary template and the proposed uniform glossary in the Federal Register along with the draft regulations.

The agencies are developing the standards to implement Section 2715 of the Patient Protection and Affordable Care Act of 2010 (PPACA), which requires the parent departments of the PPACA compassIRS, EBSA and CMS – the U.S. Treasury Department and the U.S. Labor Department and the U.S. Department of Health and Human Services (HHS) – to develop benefits summary standards and a glossary.

Officials have dubbed the summary of benefits and coverage the SBC. If all goes as officials expect:

  • Health insurance issuers and plans will start using the SBC template and glossary March 23, 2012.
  • All health insurance issuers and group health plans will have to provide an SBC and a uniform glossary.
  • Consumers will get the documents before they enroll in coverage, 30 days before coverage is renewed or reissued, and 60 days before in-force coverage undergoes significant changes.
  • Issuers and plans can provide the documents in paper form, or in electronic form if U.S. Labor Department electonic disclosure safe harbor requirements are met.

In a “Common Medical Event” section, an issuer is supposed to list the estimated cost for typical services needed if a consumer experiences a common event, such as needing immediate medical attention or becoming pregnant. In the “If you become pregnant” section, for example, an issuer or plan would give the cost of prenatal and care on one line, then the cost of delivery and inpatient services on another line.

The proposed SBC template also includes a set of standardized “coverage examples” that “illustrate what proportion of care expenses a health insurance policy or plan would cover for three common benefits scenarios–having a baby, treating breast cancer, and managing diabetes,” HHS officials say. “Additional scenarios may be added in the future.”

The breast cancer scenario includes lines for the estimated cost of a wig and of mental health care as well as lines for the estimated cost of office visits, radiology and hospital care.

The glossary includes definitions of terms such as “deductible” and co-pay.

PPACA called for the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., to

help the federal agencies develop the standards. An NAIC working group spent more than a year developing the recommendations, and the federal agencies are putting the NAIC proposals in the proposed regulations largely unchanged, federal officials say in a preamble to the proposed regulations.

The federal agencies note that they left out one sample of the calculations needed to prepare the proposed SBC because the sample may have included copyrighted material.

Although the proposed regulations simply pass along the rest of the NAIC proposals, other changes may be necessary, officials say.

“The departments recognize that changes to the SBC template may be appropriate to accommodate various types of plan and coverage designs, to provide additional information to individuals, or to improve the efficacy of the disclosures recommended by the NAIC,” officials say. “In addition, the SBC template and related documents were drafted by the NAIC primarily for use by health insurance issuers.”

The federal agencies want to hear comments about how to make the SBC template and the glossary suit the needs of employer-sponsored plans and other health plans that are not health insurance issuers, officials say.

The agencies also want to hear comments about whether the SBC template would duplicate information already provided in summary plan descriptions (SPDs), officials say.

Comments on the proposed template and glossary will be due 60 days after the proposed regulations and request for comments appear in the Federal Register.

Other PPACA terminology coverage from National Underwriter Life & Health:


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