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Communication of health plan coverage changes in transition


While employers have gotten an extension on providing revised statements to health plan participants summarizing their benefits and coverage, they have yet to get more clarity on the subject.

Changes that had been proposed by the U.S. Labor, Health and Human Services and Treasury departments last December to the federal health care reform law requirement were to take effect later this year, but groups representing large employers and insurers sought a delay to give plan sponsors and issuers more time to revise and distribute the summaries prior to open enrollment this fall.

While the summary of benefits coverage requirement has been in effect since 2012, the federal agencies proposed a facelift late last year. Among other changes, they proposed switching to a shorter template and adding another coverage example.

“The agencies are saying, ""We want to make things simpler,' “ said Julia Zuckerman, a director at Buck Consultants at Xerox in Washington.

But in a March 30 FAQ, the Labor Department said the agencies intend to issue final new rules governing the summary of benefits and coverage “in the near future” for plan years that begin Jan. 1, 2016.

Changes to the template used to prepare these statements would be rolled out for plan years beginning Jan. 1, 2017, the agency said.

“I think they were hedging their bets” with that wording, said Thomas Barker, a partner and co-chair of the health care practice at Foley Hoag L.L.P. in Washington.

Kim Buckey, a principal in the Clarkston, Michigan, compliance communications practice of HighRoads, which helps companies automate their summary of benefits and coverage statements, said whether employers need to take immediate action depends on when those new rules are issued.

But any change will require employers to revamp their documents, and large companies may have a dozen or more plans in place that require multiple types of statements, sources said.

Marsha Baker, benefits ad-ministrator at Western Farmers Electric Cooperative in Anadarko, Oklahoma, generates the employer's summary of benefits and coverage in-house. It's not the paperwork burden that bothers her. It's that the coverage examples are misleading because they are based on a single person's cost-sharing, not a family's.

Although one of the electricity provider's two health-plan offerings is a high-deductible plan with a family deductible, Ms. Baker said she is powerless to change the summary of benefits statement to reflect the single deducible that families must meet.

“They're cast in stone; you can't change them,” she said.

Instead, Western Farmers distributes the benefits and coverage statement with a cover sheet cautioning its 375 employees and 30 retirees that the cost-sharing examples are based on an individual's cost-sharing.

Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington, said many companies already provide a wealth of information to help employees understand their health plan choices.

The summary of benefits coverage is “not very useful to us; it's not very useful to our employees,” he said.

Such summaries were intended to help people shopping for health coverage through public insurance exchanges easily compare plans, said Richard Stover, a principal in Buck Consultants' Secaucus, New Jersey, office.

Employers were “shoe-horned into them” and so they “don't quite fit as well,” he said.

Mr. Barker advises clients to make an effort to comply until final rules are issued.