On August 17, 2011, the Departments of Labor, Health and Human Services (HHS), and Treasury released proposed regulations regarding the Patient Protection and Affordable Care Act (PPACA) requirement to distribute a uniform explanation of coverage. The new rules are intended to provide individuals with more useful information to enable them to better understand their options when making coverage and enrollment decisions.
Two New Forms
Under the new rules, health plans will be required to provide their participants with two new forms: (1) an easy-to-understand “Summary of Benefits Coverage” (SBC) and (2) a standard glossary of commonly-used health care plan terminology. The new rules also require health insurers to provide these forms to their customers.
A notable requirement of the new SBC is that it must include “coverage examples” that describe coverage and cost sharing for certain common health care scenarios. Currently, the three scenarios required on the SBC are having a baby, treating breast cancer, and managing diabetes.
A template of the SBC can be found on the Department of Labor website. The four-page uniform glossary of terms that must be provided to all participants can also be found on the Department of Labor website.
Effective Date and Compliance
The new rules will take effect on March 23, 2012, and they will apply to all group health plans, both grandfathered and non-grandfathered. Health plans must provide these new forms to participants as part of any package of materials that is sent to them prior to their first enrollment in coverage, and 30 days prior to their re-enrollment or renewal of coverage. They must also provide the new forms upon request, within seven days.
If there is a material modification in any of the terms of the plan that would affect the content of the SBC, the plan must provide notice of the modification to enrollees not later than 60 days prior to the date on which such modification will become effective.
Plans may be imposed a fine of up to $1,000 for each instance of willful non-compliance. In calculating the amount of the penalty, each failure with respect to an individual participant or beneficiary is considered a separate offense.
Public Comment and Where to Get More Information
The proposed regulations are open to public comment through October 21, 2011. For more information on making comments, refer to the proposed regulations.
A news release regarding the proposed regulations and other information (both regarding the proposed regulations and other aspects of PPACA) can be found on the Department of Labor website. A fact sheet of the new requirements can be found at HealthCare.gov.
Two New Forms
Under the new rules, health plans will be required to provide their participants with two new forms: (1) an easy-to-understand “Summary of Benefits Coverage” (SBC) and (2) a standard glossary of commonly-used health care plan terminology. The new rules also require health insurers to provide these forms to their customers.
A notable requirement of the new SBC is that it must include “coverage examples” that describe coverage and cost sharing for certain common health care scenarios. Currently, the three scenarios required on the SBC are having a baby, treating breast cancer, and managing diabetes.
A template of the SBC can be found on the Department of Labor website. The four-page uniform glossary of terms that must be provided to all participants can also be found on the Department of Labor website.
Effective Date and Compliance
The new rules will take effect on March 23, 2012, and they will apply to all group health plans, both grandfathered and non-grandfathered. Health plans must provide these new forms to participants as part of any package of materials that is sent to them prior to their first enrollment in coverage, and 30 days prior to their re-enrollment or renewal of coverage. They must also provide the new forms upon request, within seven days.
If there is a material modification in any of the terms of the plan that would affect the content of the SBC, the plan must provide notice of the modification to enrollees not later than 60 days prior to the date on which such modification will become effective.
Plans may be imposed a fine of up to $1,000 for each instance of willful non-compliance. In calculating the amount of the penalty, each failure with respect to an individual participant or beneficiary is considered a separate offense.
Public Comment and Where to Get More Information
The proposed regulations are open to public comment through October 21, 2011. For more information on making comments, refer to the proposed regulations.
A news release regarding the proposed regulations and other information (both regarding the proposed regulations and other aspects of PPACA) can be found on the Department of Labor website. A fact sheet of the new requirements can be found at HealthCare.gov.
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