NAIC Wraps Up Recommended Changes to the Summary of Benefits and Coverage

Last week CHIRblog readers had a report on the NAIC’s work updating the network adequacy model act. In another NAIC committee, the Consumer Information Subgroup of the Health (B) Committee, work wrapped up on recommended changes to the Summary of Benefits and Coverage (SBC) template.

The SBC is one of the most popular provisions of the ACA. The standard format and plain language description of key features and costs associated with health plan benefits helps consumers make apples-to-apples comparisons of their plan choices and, once enrolled, understand their out-of-pocket costs and the rules that apply to using their coverage. All plans, whether sold to individuals on or off the marketplace or offered to individuals in the workplace, must provide an SBC to consumers.

Earlier this year CHIRblog reported on a final rule governing how and when the SBC must be provided, noting that the tri-agencies put off for another year changes to the SBC format and content template. The agencies invited the NAIC to provide recommendations on changes to the template, similar to the work they did for the first edition of the SBC. After months of twice-weekly calls to update the template, the NAIC submitted those recommendations to the tri-agencies earlier this month.

As part of the multi-stakeholder process, consumer representatives to the NAIC, including myself, pushed for improvements that would address challenges consumers have in understanding their coverage. Reports from the first two rounds of open enrollment for the marketplaces have shown that consumers had particular problems understanding key features of health plan design, including how a plan’s deductible works. Among the key improvements consumer representatives sought are:

–       Services covered pre-deductible. NAIC has recommended a new line on the form to provide information on any services that the plan will pay for before a consumer meets the deductible. This is particularly important for consumers who may not expect to use their coverage very often during the plan year and want to know that the few services they may need – a few primary care visits or generic drugs, for example – may be paid for without having to meet a deductible first.

–       New detail on types of deductibles. NAIC has proposed that the SBC contain explicit information on whether or not a deductible or out-of-pocket limit is embedded, with a plain language explanation of what that means. The cost difference for some families may be significant, particularly if there is one member of the family who requires costly care.

–       Clearer information on provider networks and drug costs. A plan’s SBC must use the same language in describing provider designations – preferred vs. non-preferred, or in-network vs. out-of-network – as it uses in the provider directory, so consumers can easily track cost-sharing information from the SBC to the provider directory. Similarly, the plan’s SBC must use the same language in describing prescription drug cost sharing – for example, tiers of coverage – as is used in the drug formulary.

The recommendations include other changes to the template, including a new cover letter that provides a road map to the sections that follow, and revisions to the coverage examples. The NAIC also recommended that the agencies provide a single site for consumers to look up preventive services that must be covered without cost sharing, as is done for Medicare beneficiaries. And in what would amount to a gift to anyone who has tried to figure out what kind of employer plan they have so they can understand what consumer protections apply, the NAIC recommended the SBC include a disclosure of whether or not a plan is self-funded.

As we slogged through the many conference calls to go line-by-line through the template, it was sometimes hard to see what the end result of all the discussions would be. It was easier to agree on what the problems with the current template are; it was far harder to agree on how to address them. But I recently got confirmation that at least some of the changes will be welcome additions. While doing a training for Florida assisters as part of our Robert Wood Johnson Foundation-funded technical assistance to navigators, one assister actually hugged me when I shared the news that the revised SBC may include information on whether a plan has an embedded deductible or not. Such displays of health policy love are rare. Fingers crossed, the SBC beginning in January 2017 will have that information and more that will help consumers better understand their coverage.


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The opinions expressed here are solely those of the individual blog post authors and do not represent the views of Georgetown University, the Center on Health Insurance Reforms, any organization that the author is affiliated with, or the opinions of any other author who publishes on this blog.