Human Resources News & Insights

Feds’ new rules & deadline for health summaries

The healthcare reform law requires employers who sponsor health plans to provide workers with “summaries of coverage.” But after some delays, the feds just published the final rules, deadline and sample documents.

Under the final rules, insurance companies and plan sponsors with plan years that start September 23, 2012 or later will have to supply the documents during their next open enrollment.

Originally, employers were tasked with providing the documents beginning March 23, 2012.

The two documents the healthcare reform bill says plan participants must receive from insurers and plan sponsors:

  1. A short, easy-to-understand Summary of Benefits and Coverage (SBC), and
  2. A glossary of terms commonly associated with health insurance, such as “deductible” and “co-pay.”

Summary of Benefits and Coverage

SBCs must summarize, in “plain language,” the key features of every plan and coverage option available to current and prospective plan enrollees. They must explain the benefits provided, cost-sharing rules and coverage limitations and exceptions.

A key feature of the SBC will be the “coverage example” comparison tool, which is being compared to the Nutrition Facts label required on packaged food. They must provide an accurate estimate of how much plans will cover and how much participants will be expected to pay out of pocket for two common types of medical care: Maternity care (having a baby) and diabetes type II treatment.

Glossary of terms

Along with an SBC, insurance companies and plan sponsors are required to provide plan participants with a glossary of commonly used health coverage and medical terms.

The Department of Labor has already posted the glossary on its website.

When an SBC must be issued

The final rules also establish four situations in which the documents must be issued:

  • When consumers are shopping for coverage. Plans and insurers will have to provide an SBC and glossary for each benefit plan a worker is eligible to receive.
  • At renewal. Participants must receive the documents for each new plan offered or policy year so they can decide whether to renew or reenroll.
  • When coverage changes. If there are any significant changes in coverage in the middle of the plan or policy year, participants must be notified at least 60 days before the change takes effect.
  • Upon request. The documents must be provided within seven business days if an employee requests them.

Lawmakers have said by keeping insurance companies from using non-uniform, intricate health plan documents, the new rules will make it easier for employers and individuals to select the coverage that will suit them best.

Info: The feds’ templates for the required documents can be found here.

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