One of the early reforms in the Affordable Care Act (ACA) – and the most popular, by some polls – is the requirement that plans and insurers provide easy-to-read summaries of plan benefits, cost sharing and rules.  The Summary of Benefits and Coverage (SBC) is a standardized, 8-page form that allows consumers to make apples-to-apples comparisons of plan options and, once enrolled, understand how to use their coverage.  The form has been in use with individual and employer-based plans since late 2012, and now the Departments of Treasury, Labor and Health and Human Services are updating the rules that apply to SBCs, including revisions to the content of the form.

The Departments published a proposed rule in December, seeking comments on changes to the template and requirements for how and when it must be provided.  Under the federal rules, an SBC must be provided to individuals when they are applying for coverage, upon enrollment, when changes to the plan would prompt a change in the SBC content, and upon request.

The rule released earlier this week makes mostly modest changes to how and when the SBC must be provided to consumers. For example, the rule clarifies that an insurer or plan doesn’t have to provide a second SBC to individuals upon enrollment if there is no change to the content of the SBC provided when they applied for coverage. Proposed changes to the template content and form are largely not addressed in this rule. But there are some updated content requirements of note:

• Minimum Essential Coverage and Minimum Value. The SBC must include statements on whether or not the plan provides minimum essential coverage (MEC), which is needed for people to avoid paying the individual mandate penalty, and on whether the plan meets minimum value, which is necessary information when evaluating an employer plan for eligibility for premium tax credits. Under current guidance, plans can provide that information in a cover letter or similar disclosure.  Once the template changes under consideration take effect, that information must be provided on the SBC.
• Abortion coverage. The ACA requires marketplace plan SBCs to note if abortion services are covered or excluded, and if covered, whether coverage is limited to services for which federal funding is allowed. The proposed changes to the template will reflect this requirement, but the rule released this week says that plans have flexibility on the wording and placement of that information until the template changes take effect.

The rule does not adopt some changes sought by consumer advocates:

• Consumer groups had asked during the rule’s comment period that employees eligible for a special enrollment period receive an SBC upon application. The federal rulemakers determined that such employees must proactively request an SBC.
• Under a safe harbor, plans that have separately administered benefits can provide separate, partial SBCs for those benefits. Consumers asked that plans be required to synthesize separate plans into one SBC, to make it easier for consumers to understand their full benefits under a plan. Instead, the Departments codified the safe harbor, allowing this flexibility for separate SBCs to continue.
• Federal rules establish a threshold for when the SBC must be provided in languages other than English. Consumer advocates wanted to see the threshold lowered so that the SBC would have to be available in languages in use by smaller shares of potential enrollees, consistent with disclosure requirements for other federal programs. The Departments rejected that recommendation and retained the current threshold, which requires SBCs to be available in Chinese, Navajo, Spanish and Tagalog.

The federal agencies have signaled that there’s more to come, with changes of greater significance still under consideration. In a FAQ published in March, the Department of Labor said it would use consumer testing and take further comments from the public and the National Association of Insurance Commissioners (NAIC) before finalizing changes to the template SBC.  Once finalized, the new template will take effect for play years beginning after January 2017. In response to the FAQ, the NAIC work group that developed recommendations for the original SBC template (the “B” Committee’s Consumer Information Subgroup) is back at the table debating changes to the revised template.

Improving the SBC to make it easier for consumers to compare plans and understand their benefits is no easy task but a necessary one. We have ample data to show consumers have difficulty understanding even basic health insurance terms, let alone how their benefits work. For example, a study out this week found confusion about health insurance and key terms like deductible and co-insurance among young adults aged 19 to 30.

As a consumer representative to the NAIC, I’ve been participating in the NAIC work group review of the template, and we are constantly struggling with making the form clearer in the fewest words possible. In some cases, we know consumers need additional information, especially on how the deductible works (as readers of CHIRblog know) as well as other cost sharing. But finding the room on the form and the right words to use is a challenge.

It’s important to get a form that works for simple plan designs to more complex, multi-tiered plans, whether a consumer is shopping for coverage or using their plan. Consumers who don’t understand how their coverage works can find themselves with significant out-of-pocket costs or missing out on needed services.