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Will consumers use the PPACA benefits summary?

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U.S. employers, health insurers and plan advisors now have to comply with the “health insurance nutrition label rules”—the “summary of benefits and coverage” (SBC) rules.

The rules, part of the Patient Protection and Affordable Care Act of 2010 (PPACA), are supposed to help consumers and employers shop for high-quality health coverage by giving them the nuts-and-bolts plan information they need to compare the value of the benefits provided as well as the premiums.

An SBC is supposed to describe the basic features of an individual policy or group plan and also provide detailed, standardized examples showing how the plan would work in two sample scenarios: Having a baby or dealing with diabetes.

Insurers and employers are supposed to make the SBCs available free of charge when consumers are shopping for, enrolling in or renewing coverage.

The SBCs must be available during the next open enrollment period that started on or after Sept. 23, 2012. For consumers who enroll outside an open enrollment period, the SBC must be available at the start of the next plan year that begins on or after Sept. 23, 2012.

Health and Human Services (HHS) officials developed the SBC program together with officials from the U.S. Labor Department, the Internal Revenue Service and state insurance commissioners.

Analysts at the Henry J. Kaiser Family Foundation found when they surveyed consumers about the SBC concept that 76 percent of the Republicans polled liked the idea, even though many of those Republicans said they oppose PPACA.

Insurance groups and other groups that say they like the SBC concept have argued that the SBC rules could backfire, by making SBCs a nightmare for employers, insurers and benefit plan administrators to produce.

For now, at least, PPACA proponents are hailing the SBC effective date as a PPACA implementation success story.

HHS. Secretary Kathleen Sebelius has put out a statement welcoming the availability of SBCs and a related document, a “uniform glossary” of health benefits terms.

“Thanks to the health care law, Americans will now get clear, consistent and comparable information when shopping for health coverage,” Sebelius said in the statement. “These new tools empower consumers to make informed decisions about their health coverage options and to choose the plan that is best for them, their families, and their business.”

Rep. Rosa DeLauro, D-Conn., put out a press release declaring that the SBC will help consumers.

Before the SBC came out “health insurance was a black box,” DeLauro said in the statement. “People practically needed a team of lawyers just to understand the fine print of a coverage policy. As a result, Americans would buy coverage they thought was comprehensive, only to realize once they actually got sick that it had huge gaps.”

Now, DeLauro said, the system will work better.

Some compliance and technology firms are using the introduction of the  SBC as a chance to get prospects’ attention.

Tyrula LLC, for example, is marketing an “SBC Boxed” system that, it says, can help employers understand what they need to do to produce SBCs.

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