Congress and President Obama may be on summer vacation, but someone forgot to tell the folks at the Department of Health and Human Services to take the month off. HHS has issued a huge number of new regulations and other policy statements relative to the Patient Protection and Affordable Care Act during August, and the latest major announcement was last week’s release of a proposed regulation detailing the new uniform explanation of benefits and a standardized glossary of insurance terms that all insurers will have to provide to all consumers 60 days prior to enrolling in coverage and 30 days prior to reissuance or renewal of their health coverage beginning in plan years on or after March 23, 2012.
The summary of benefits document is intended to help consumers accurately compare health plan choices. The proposed template form and glossary of coverage terms are based on drafts crafted by the National Association of Insurance Commissioners. NAHU CEO Janet Trautwein was one of many stakeholders who served on the NAIC panel that developed the form text.
The Obama administration is seeking public comment on the new forms and requirements, and NAHU plans to submit detailed comments on behalf of the entire association. NAHU’s major concerns with the proposed requirements do not really have to do with the text of the proposed forms, but more with how the new requirements are structured. We know that agents and brokers and plans will still need to provide beneficiaries with far more detailed plan information than what is contained in these documents, and that they will in no way replace the personal touch and advice an agent/broker provides. Our primary concerns center more on the timing of the new requirements, their administrative costs and their potential impact on larger employers.
In addition to being duplicative of the current summary plan description requirements already required by existing federal law, the new requirements could be a very big hassle for those serving the self-funded group benefit marketplace. Since many large companies provide employees with customized benefit packages, their health plans and third-party administrators could have to create thousands of variations of essentially the same documents, which will only lead to higher administrative costs with negligible consumer benefit.
Another key concern is the implementation timeframe of the regulation. We would like to see HHS delay the March 23, 2012, enforcement deadline, since the regulation was released nearly five months after the March 23, 2011, deadline for its release given in PPACA.
Perhaps NAHU’s most important objection, which will be a key focus in our comments to HHS, is the requirement that health plans will have to release the summary to all plan beneficiaries within 60 days of any benefit change or 30 days prior to a reissuance or renewal. This is a huge practical challenge that agents and brokers understand only too well, considering that, in most states, renewal rates are only released within 60 or, in some states, 30 days, before the end of a plan year, and then employers still need time to make any adjustments to their benefit packages.