New Rule Requires Plain Language in Describing Health Plan Benefits and Coverage

The U.S. departments of Health and Human Services, Labor and the Treasury together published new guidelines that will require health insurers and group health plans to provide consumers with clear, straightforward, consistent and understandable summary information regarding their health plans. The new rules also will make it simpler for employers and the nearly 150 million Americans with private health insurance plans to directly compare one plan with another.

Under the new guidelines, which go into effect in September, consumers must have access to two important documents to help them understand and evaluate their health insurance options: a short, easy-to-understand Summary of Benefits and Coverage (SBC); and a uniform glossary of terms commonly used in health coverage such as “deductible” and “copayment.” Included in the SBC will be a new, organized plan comparison tool called coverage examples, which will demonstrate sample medical situations and describe how much coverage the plan will provide. The SBC must be provided to enrollees and clients at key periods in the registration process, such as during application and renewal.

The goals of the new plain language rule, which is part of the Affordable Care Act, are to ensure strong shopper information and to reduce paperwork and cost. A template for the SBC and the glossary can be viewed at cciio.cms.gov/resources/other/index.html#sbcug.