Last Thursday, Obama Administration officials finalized new regulations requiring insurers to create both a Summary of Benefits and Coverages (SBC) for health plans and a standardized glossary of terms used in health insurance coverage (the templates for each may be viewed
here).
The new rules, written jointly by the departments of Health and Human Services (HHS), Treasury and Labor, were authorized under the Patient Protection and Affordable Care Act (PPACA) and will take effect Sept. 23.
SBCs are intended to create a short, easy to understand summary of what a health plan covers and how much consumers will have to pay for that coverage. They will include a coverage facts label, which is intended to compare favorably with nutrition labels on food.
Also, SBCs will contain a standardized section called coverage examples, which will show how much coverage each plan would provide in two situations: delivery of a baby and diabetes treatment. More examples are planned to be added later as feedback from consumers is received.
The standardized glossary of terms will contain the definitions of various commonly used terms such as copay, coinsurance, deductibles and out-of-pocket limits.
Administration officials and proponents say the goal of the new rules is to make health insurance products as easy to read and understand as possible. Industry participants submit that the new rules will increase administrative costs and that the time frame for implementation is too short.
The regulations were originally scheduled to go into effect in March of this year, so it is doubtful insurers will get another reprieve.