From SPDs to SBCs
Some US employers are betting
on a great deal of the Health Care Reform Act being repealed when (not 'if' --
at least to these bettors) the Democrats are swept out of office in the
impending national elections. So no need
to make a lot of changes; after all, a good deal of it will be discarded
anyway. Whether or not this is a prudent
strategy remains to be seen. In the
meantime, provision after provision of the Act is getting phased in while the
repeal zealots continue to hold their breathe.
We note that it has been since September, 2012 that the Act has required employers offering health insurance to provide a Summary of Benefits and Coverage ("SBC") to all employees. Not to be confused with “SPDs” (Summary Plan Descriptions), SBC’s come with specific content and formatting rules. While SPDs must be "understandable" and "plain-spoken" as mandated by ERISA, SBCs must be “short” and in “plain language.” This is a new acronym basically re-expressing the disclosure provisions of ERISA, but with a little more meat since the SBC requires native language translation and better medical option comparisons to bolster health care consumerism. Specifically, the SBC requires side-by-side comparisons of the out-of-pocket costs associated with treatment of two hypothetical medical conditions (i.e., having a baby and treatment of type ll diabetes). This allows insureds to easily see how much either kind of procedure would cost under plan A vs. plan B and make a more informed decision at least as far as how the costs would compare for these specific types of claims under different company-offered medical options. In addition, "uniform" glossaries of key terms must also be included in the SBC.
Many employers already include side-by-side comparisons of deductibles, co-pays and annual out-of-pocket maximums in their benefits literature. Some even have glossaries in their material. But few, if any, have included side-by-side comparisons of costs associated with baby delivery and treatment of type ll diabetes under different medical insurance options made available to the employee. It's critical to audit the material your organization has in place and compare it to the requirements of SBC.
If your company is among those betting on repeal as an excuse to sit tight, it might not make sense to bet on this provision -- already nine months in place -- being discarded since it's relatively cost-neutral. Other provisions of the Act that are more clearly tied to cost (e.g., $2,000 per employee annual penalty for no medical coverage where there are 50 employees or more [with an exemption for the first 30]) will be getting a considerable amount of attention and will serve to push the repeal wagon forward. But chances are this one stays, so get on it. Or contact the consultants at www.justgotword.com for assistance. We specialize in updating this kind of material for major employers throughout the country.
We note that it has been since September, 2012 that the Act has required employers offering health insurance to provide a Summary of Benefits and Coverage ("SBC") to all employees. Not to be confused with “SPDs” (Summary Plan Descriptions), SBC’s come with specific content and formatting rules. While SPDs must be "understandable" and "plain-spoken" as mandated by ERISA, SBCs must be “short” and in “plain language.” This is a new acronym basically re-expressing the disclosure provisions of ERISA, but with a little more meat since the SBC requires native language translation and better medical option comparisons to bolster health care consumerism. Specifically, the SBC requires side-by-side comparisons of the out-of-pocket costs associated with treatment of two hypothetical medical conditions (i.e., having a baby and treatment of type ll diabetes). This allows insureds to easily see how much either kind of procedure would cost under plan A vs. plan B and make a more informed decision at least as far as how the costs would compare for these specific types of claims under different company-offered medical options. In addition, "uniform" glossaries of key terms must also be included in the SBC.
Many employers already include side-by-side comparisons of deductibles, co-pays and annual out-of-pocket maximums in their benefits literature. Some even have glossaries in their material. But few, if any, have included side-by-side comparisons of costs associated with baby delivery and treatment of type ll diabetes under different medical insurance options made available to the employee. It's critical to audit the material your organization has in place and compare it to the requirements of SBC.
If your company is among those betting on repeal as an excuse to sit tight, it might not make sense to bet on this provision -- already nine months in place -- being discarded since it's relatively cost-neutral. Other provisions of the Act that are more clearly tied to cost (e.g., $2,000 per employee annual penalty for no medical coverage where there are 50 employees or more [with an exemption for the first 30]) will be getting a considerable amount of attention and will serve to push the repeal wagon forward. But chances are this one stays, so get on it. Or contact the consultants at www.justgotword.com for assistance. We specialize in updating this kind of material for major employers throughout the country.
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