New rules for health plans require clear summaries of benefits

Moving to implement a much-anticipated consumer protection in the new healthcare law, the Obama administration issued regulations Thursday requiring health plans to describe what they cover in clear, standardized language that is understandable to consumers.

Starting this fall, insurers and employers that offer health coverage will have to provide a six-page form that summarizes basic plan information, such as deductibles and co-pays, as well as costs for using in-network and out-of-network medical services.

The forms will also include estimated out-of-pocket costs for two basic examples of care: delivering a baby and managing Type 2 diabetes.

The changes are designed to allow consumers to assess how much their care would cost under different insurance policies, and to simplify the process of evaluating health plans, a task that now can involve reviewing hundreds of pages published by insurers.


“One of the primary purposes of this is to ensure this apples-to-apples comparison across plans,” said Steve Larsen, the senior Department of Health and Human Services official overseeing insurance regulation.

The simplified forms, known as the summary of benefits and coverage, were mandated by the healthcare law signed by President Obama in March 2010.

Many consumer groups and patient advocates feared that the administration would back away from the requirement after insurers and employer groups complained that developing the forms would be costly and burdensome.

The administration did put off the effective date until September, instead of March, and dropped a requirement that health plans include premiums on the forms.

Consumer groups nonetheless cheered the regulations Thursday.

“A driving force behind the Affordable Care Act was to make the health insurance market work for consumers,” said Lynn Quincy, senior policy analyst for Consumers Union, the policy and advocacy organization that publishes Consumer Reports. “This rule is a big step in helping consumers better understand and evaluate their insurance options.”

Health plan officials called the regulations almost unfeasible, saying the deadline to comply was too short.

“These new requirements involve far more than simply producing one standard form,” said Kelly Miller, a spokeswoman for the Blue Cross Blue Shield Assn. “Plans will need to make major and costly systems changes and produce customized benefit statements for every healthcare option.”


But an official with the National Retail Federation, a leading member of a coalition of major employer groups, said many employers were heartened by signals that the administration would try to ease other, more consequential requirements of the health law.

Business groups have been particularly concerned about how employers will have to tally how many full-time and part-time employees they have, a crucial calculation starting in 2014 when large employers will be subject to a new mandate requiring them to provide health benefits to full-time employees.

Neil Trautwein, a vice president with the National Retail Federation, said that administration officials appeared increasingly sympathetic to employer pleas to allow them to average work hours over a long period to determine which employees were full-time and which were part-time.

“We didn’t get everything we wanted on the summary of benefits and coverage,” Trautwein said Thursday. “But the working relationship with the administration that we have forged has been very welcome and most productive.”