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WASHINGTON—Employers have more time and face a slightly reduced administrative burden in complying with health care reform law rules that require them to revamp how they communicate and explain their health care plan benefits.
In final rules published last week, the Obama administration said the requirement to distribute the new summary of benefits coverage statement to employees now will go into effect for plan years that begin on or after Sept. 23, 2012.
For example, if a plan year begins on Jan. 1, 2013, and the employer's open enrollment period is from Oct. 1 to Nov. 1, the new SBC would have to be available by Oct. 1.
Under previous rules, later withdrawn in the face of intense employer opposition, the document would have had to be provided by March 23, an impossible deadline, employer groups and others said.
“An extension was absolutely crucial for employers and insurers,” said Michael Thompson, a principal with PricewaterhouseCoopers L.L.P. in New York.
“The extension is very welcome, but it still is not a lot of time,” said Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J.
“This will require employers to move very fast,” said J.D. Piro, senior vp and national practice leader for Aon Hewitt's health and benefits legal consulting group in Norwalk, Conn.
The heart of the new communications requirement is the distribution of a new Summary of Benefits and Coverage booklet, which will be divided into three columns. One column will be headed, “Important Questions,” and would include:
• What is the overall deductible?
• Are there other deductibles for specific services?
• Is there an out-of-pocket limit on my expenses?
• What is not included in the out-of-pocket limit?
In an adjacent column, “Answers,” responses to the questions will have to be provided. A third column, with the heading “Why This Matters,” would have to include additional detail.
In another section of the statement, employers will have to give examples of how coverage applies in two specific situations: having a baby and managing Type 2 diabetes. The examples will have to provide sample costs of treatment.
For each example, employers will have to use a dollar figure dictated by the government on the amount that would be owed to providers. Then, the employer will fill in how much the employee and the plan would pay.
Other information, also using government-supplied figures, would include sample care costs. For having a baby, cost information would include the first office visit, radiology, laboratory tests and hospital charges for mother and child.
At the bottom of the example, under the heading “You Pay,” dollar figures would have to be provided on deductibles, copayments, coinsurance, and limits or exclusions.
However, a third example—the costs of treating breast cancer—that would have been required under the previous rules was dropped, a deletion benefit experts say was appropriate.
“There is such a variance in costs in treating breast cancer—depending on, among other things, what stage the cancer is in—that it would have been difficult to provide” sample costs, said Paul Dennett, senior vp-health care reform with the American Benefits Council in Washington.
Another change in the final regulations includes the dropping of a requirement that employers disclose the plan premiums under “Important Questions.”
In addition, the final regulation makes clear that new employees do not have to be provided with paper SBCs for every plan the employee would be eligible to enroll in. Instead, an employer could provide a website on which the SBCs could be viewed or downloaded.
For employees already in a health care plan, the SBC only would have to be provided for the plan he or she is in. But the employer would have to provide an electronic link for other available plans. Employees could request paper copies.