A benefits group wants federal agencies to require the new health plan summary descriptions to go to a tightly focused group of people.
The Employers Council on Flexible Compensation (ECFC), Washington — a group that represents insurers, plan administrators, professional advisors, and others with an interest in the flexible spending account (FSA) market, the health reimbursement arrangement (HRA) market and other benefit account markets — has made that case in a comment letters sent to the Employee Benefits Security Administration (EBSA), an arm of the U.S. Labor Department that is responsible for helping to implement many of the provisions in the Patient Protection and Accountable Care Act of 2010 (PPACA) that affect employee benefit plans.
EBSA is working on proposed regulations relating to a Summary of Benefits and Coverage (SBC), which would implement PPACA Section 2715, a provision that calls for federal regulators to create a standardized health plan description system.
Regulators want consumers to be able to use SBCs to compare plan provisions such as deductibles and co-payments, and also to help consumers compare what the total and itemized out-of-pocket costs might be for patients dealing with conditions such as pregnancy or diabetes
The proposed regulations require group health plans and health insurers to start providing SBCs March 23, 2012.
Many groups have argued that the SBC program start date is coming too soon.
John Hickman, chairman of the ECFC technical advisory committee, writes in the group’s comment letter that the ECFC would like to see EBSA postpone the start date until the “annual enrollment period for the first plan year that begins on or after the date that is one year after the final regulations are issued.”
“Sufficient time is required to digest and identify the full impact of the new legal requirements on current enrollment systems and procedures,” Hickman says.
The current start date is just 5 months away, and final regulations are not yet available, Hickman says.
The natural way to apply the new rules would be to have them take effect for the next annual enrollment period starting after the final regulations are available, Hickman says.
The ECFC also would like to see EBSA to use electronic distribution rules. The proposed rules would require plans to get advance, electronic consent from recipients who would get the documents electronically and would not otherwise normally use the employer’s electronic information system.
“Obtaining consent will impose significant obstacles on plans such that the requirement, if not waived, will practically prevent plans from furnishing SBCs electronically,” Hickman says.
The ECFC suggests that a plan should be able to post an SBC on the Web and provide written notices when employees enroll explaining that printed copies are available upon request.
“Under this approach, if the individual is not effectively able to access the electronic media, the participant is able to request a paper copy,” Hickman says. “Thus, the measures adopted under this approach reasonably ensure actual receipt of the SBC.”
That approach would be consistent with Employee Retirement Income Security Act (ERISA) disclosure rules and also with the current electronic benefit plan disclosure rules developed by the Internal Revenue Service, Hickman says.
The ECFC also is asking EBSA to require plans to provide SBCs only to plan “participants” and not also to “enrollees.”
“The term ‘enrollees’ is not defined in the statute but the proposed rules define ‘enrollee’ to mean a ‘participant’ or ‘beneficiary’ as defined by ERISA,” Hickman says. “Beneficiaries (other than qualified beneficiaries under COBRA and perhaps survivors) typically have no right to enroll apart from the employee. Thus, if the employee chooses not to enroll the spouse or dependent child, the spouse or dependent child typically has no independent right to enroll.”
A beneficiary may need some of the information in the SBC but may not have any real independent need for the other information, Hickman says.
A plan should have to provide an SBC to an employee’s beneficiary only if the beneficiary asks for a separate copy of the SBC, Hickman says.