The U.S. Departments of Health & Human Services (HHS), Labor, and Treasury issued proposed new rules under the Affordable Care Act on August 17, 2011 which would simplify the purchase of health insurance for consumers.
Under the proposed new rules health insurers and group health plans would be required to provide consumers and employers with clear, consistent and comparable information about their health plan benefits and coverage. New forms providing comparable information for all health insurance plans are scheduled to be available in 2012.
“Today, many consumers don’t have easy access to information in plain English to help them understand the differences in the coverage and benefits provided by different health plans,” HHS Secretary Kathleen Sebelius said in a release issued by HHS. “Thanks to the Affordable Care Act, that will change,” she said.
The stated objective of the new rules is to enable the more than 180 million health insurance consumers with private health insurance to easily understand their health coverage and determine the best health insurance options for themselves and their families or employees.
“Workers and their families need clear and understandable information regarding their health coverage,” said Secretary of Labor Hilda L. Solis, according to the HHS release. “Today’s proposal is a common-sense step that will help workers quickly and easily compare different coverage options, in order to make more informed decisions,” she explained.
The Proposed New Regulations
Under the proposed regulations, all health insurance companies would be required to supply consumers with two forms, upon request and before they purchase insurance:
- An easy to understand Summary of Benefits and Coverage; and
- A uniform glossary of terms commonly used in health insurance coverage, such as “deductible” and “co-pay”.
In its release, HHS explained that today, “Often, health plans and issuers only provide selective details on the plan or policy before it’s purchased, giving consumers a limited understanding of what they are buying.”
The proposed new rules are intended to “give consumers straightforward, standardized information on their choices upfront, helping them understand the key features of the policy or plan and allowing them to make a more informed decision,” HHS said.
Under the new rules, the Summary of Benefits and Coverage must be based upon and use a uniform glossary of terms, with common meanings across all insurance policies and all insurers. This will “replace the jargon that makes it impossible to compare plans or figure out what is covered,” HHS said.
The Summary of Benefits and Coverage would be required to include a new set of standardized “Coverage Examples.” These would illustrate specifically what proportion of care expenses a health insurance policy or plan would cover for common health insurance claims. Initially, the three claims scenarios to be included in the Coverage Examples would be: having a baby, treating breast cancer, and managing diabetes. Additional claims scenarios may be added to the Coverage Examples in the future.
The Coverage Examples are intended to help consumers understand their share of the costs of care under a particular policy or plan, at typical times when they may need the coverage.
Under the new rules, issuers would also be required to provide notice at least 60 days before any significant modification is made in any insurance plan or coverage during the plan or policy year.
The proposed new rules were developed during a public process led by the National Association of Insurance Commissioners (NAIC) and a working group composed of stakeholders, including representatives of consumer and patient advocacy organizations, health insurers, health care professionals, and others.
During this process, the working group met monthly, invited public comments, and conducted consumer testing of the language and forms.
The proposed regulations issued on August 17 by the U.S. Departments of HHS, Labor and Treasury adopted the recommendations submitted by the NAIC after that process.
Public comments are requested on how the forms can be improved. Comments can be submitted until the date 60 days after the final rules proposal is published in the Federal Register.
To view the formal Notice of Proposed Rulemaking or learn how and when to submit public comment, see: Summary of Benefits and Coverage and Uniform Glossary
More information about the proposed regulations is available at: HealthCare.gov.
The proposed template for the new Summary of Benefits and Coverage can also be viewed at HealthCare.gov.
Information about the current activities and focus of The Center for Consumer Information & Insurance Oversight (CCIIO), an agency of the U.S. Centers for Medicare and Medicaid Services (CMS) charged with overseeing implementation of the provisions of the Affordable Care related to private health insurance, can be found at the CCIIO’s website.
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