The current draft of the proposed summary of benefits and coverage (SBC) could change greatly over the next few months.
“We expect that the employee benefits community and health insurers will rigorously object to many aspects of the proposed rules,” Mark Holloway, a health reform advisor at Lockton Companies L.L.C., Kansas City, Mo., says in a comment on the SBC draft and a related document, a health benefits glossary.
Agencies at the U.S. Treasury Department, the U.S. Labor Department and the U.S. Department of Health and Human Services have developed the drafts to implement Section 2715 of the Patient Protection and Affordable Care Act of 2010 (PPACA).
The proposed SBC template would create a model for a 4-page document that is supposed to be to health insurance what nutrition labels are to milk. The SBC is supposed to explain a plan’s cost-sharing provisions and limits on coverage, and it also is supposed to show what the breakdown of out-of-pocket costs might for a plan member who faces a scenario such as dealing with diabetes or having a baby.
The glossary gives definitions of terms such as “deductible” and co-payment.
For now, at least, the compliance date is set to be March 23, 2012.
“The new rules and templates appear best designed for standard insured programs, and present some difficult issues for employer plans,” Holloway says.
One question is whether the information the agencies want insurers and plans to provide can really fit on 4 pages.
“Crafty federal regulators avoided the space constraints by interpreting ’4 pages’ to mean 4, doubled-sided pages, effectively expanding the SBC to 8 pages,” Holloway says.
Today, employers need not tell employees about plan changes in advance. The proposed SBC rules would require employers to provide revised SBCs at least 60 days before changing a plan, and that requirement could be a big headache for employers not used to having to provide advance notice, Holloway says.
“We hope (and rather expect) the agencies will delay the implementation date,” Holloway says. “The agencies were late with their proposed guidance, and the insurance industry is complaining that it does not have adequate time to come into compliance.”
- Allison Bell