Health Care Reform Update: Benefit Summary Standards Proposed

August 25, 2011

Proposed regulations were released August 22 that would set disclosure requirements and standardize presentation of summaries of benefits and coverage for group and individual health plans. Two Federal Register notices were published jointly by the Internal Revenue Service, the Employee Benefits Security Administration, and the Centers for Medicare & Medicaid Services. The first notice proposes standards for group health plans, including self-insured plans, and health insurance issuers that would govern who must provide and who should receive a summary of benefits and coverage, and how and when it must be provided. The second notice provides the proposed template and instructions for the summary, samples, and a proposed uniform glossary of terms.

The standards are intended to lead to effective communication about each plan and make it easier to compare benefits and costs across plans. The Affordable Care Act directed the agencies to ensure that summaries of benefits and coverage:

Be presented in a uniform format;
Utilize terminology understandable by the average plan enrollee;
Are no more than four pages long (which, after taking into account the amount of information required, the agencies have interpreted as four double-sided pages); and
Use type no smaller than 12 points.

In addition, the agencies were also charged with developing a glossary of terms to engender a common understanding of typical health insurance language.

As directed by the law, the agencies relied heavily on the National Association of Insurance Commissioners (NAIC), which convened a working group comprised of various stakeholders to develop the proposed standards and templates. The NAIC process included the opportunity for public comment.

Comments on the proposed rules are due October 21. Once the rules are finalized, group health plans and health insurance issuers will need to comply beginning March 23, 2012, two years after enactment of the Affordable Care Act.