Guidance Issued on Summary of Benefits and Coverage and Uniform Glossary
by admin - August 29th, 2011.Filed under: Groups (100+ Employees), Groups (2-50 Employees), Groups (51-99 Employees). Tagged as: four-page Summary Benefits Coverage, grandfathered plans, group health insurance, health insurance reform, Uniform Glossary of Terms.
HHS, DOL, and IRS jointly issued proposed rules requiring group health plans, including grandfathered plans, to provide their members with two new forms beginning on March 23, 2012. This ruling is currently open for public comment for a period of 60 days.
The first form is the Summary of Benefits and Coverage (SBC), which is intended to provide insured members with information about the plan they have or can be used when shopping for coverage and comparing plans. The proposed SBC template includes instructions for illustrating what portion of expenses are covered under the health plan using three required benefit scenarios: having a baby, managing diabetes and treating breast cancer. This will help consumers compare their share of the cost under a particular plan when considering other coverage options. The health plan will be required to provide the SBC 30 days prior to the renewal of their health coverage and may be disclosed in either paper or electronic form if certain safeguards are met.
The second form is the Uniform Glossary of Terms commonly used in health insurance coverage such as “deductible” and “co-pay.” This tool is designed to help consumers have a better understanding of terminology when making a buying decision. To help ensure the document is easily accessible for consumers, HHS and DOL will also post the glossary on the new health care reform website, www.HealthCare.gov and www.dol.gov/ebsa/healthreform/.
What does this means to you?
While the government’s intent with this ruling was to make consumers more informed about their insurance options, most individuals do not understand the current benefit booklet carriers provide because of all the details. This attempt to simplify the buying decision assumes consumers will make a purchasing decision based on the new four- page SBC. The fact is, “dumbing down” the language is not going to help the consumer make a more informed buying decision. It will, however, add to the cost of health insurance due to the additional administrative burden insurance companies assume as well as add additional responsibilities to employers and agents as it relates to timing and communication, particularly at the time of renewal. Again, the need for agents becomes very apparent because of the complexity of the process when shopping for benefits.
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