Administration Looks to Improve Health Benefit Comparisons

The Departments of Health and Human Services, Labor, and the Treasury issued proposed rules to help people who are shopping for health insurance coverage better understand their options. 

As explained by the Department of Labor, all health plans and issuers are required to provide consumers with a standardized, brief summary of what a health insurance policy or employer plan covers. This information allows consumers to make “apples to apples” comparisons when they are shopping for health insurance coverage, and to have a clear summary of what their insurance covers.

The new proposed rules would add features making the Summary of Benefits and Coverage (SBC) even more user-friendly, DOL says, by adding a new coverage example that would better illustrate the cost of services for more consumers. The proposed rules would also significantly streamline and shorten SBCs—as demonstrated by the sample completed Summary of Benefits and Coverage that has been reduced from four double-sided pages to two and a half. Improvements have also been made to a Uniform Glossary that helps consumers understand insurance terms.

“Our goal is to improve consumers’ access to concise and comparable health plan information to help them better understand their coverage options and make informed choices when shopping for a plan,” said the Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner. “We listened to feedback from consumers and other stakeholders to improve and help streamline the information provided to consumers.”

DOL says consumer testing has shown that coverage examples on the SBCs, which demonstrate how the plan’s deductibles and other cost-sharing apply in two scenarios, are the most useful comparison feature for many consumers. Coverage examples currently include having a baby and managing diabetes type two. The proposed rules would add an additional coverage example that shows cost-sharing related to a broken foot, to help consumers understand what their plan would cover in an emergency scenario. The three departments are also proposing to update the pricing data used in the coverage examples so that the examples reflect more accurate charges experienced by consumers.

The proposed rules would significantly streamline and shorten the SBC form by removing information that is not required by statute and has been identified through consumer testing to be less relevant for consumers purchasing health insurance. And the rules would clarify and streamline the requirements health insurers and group health plans follow. For example, the rules propose new ways to reduce duplication by providing flexibility to group health plans and student health plans when another party assumes responsibility to provide the SBC to plan enrollees.

If finalized, the new requirements would be implemented for plan years on or after Sept. 1, 2015.

The full text of the proposed rulemaking is here.