HHS Issues Final Rules on MLR Notices for those Not Receiving Rebates
Februrary 10, 2012
Effective September 23, 2012 for health plans and insurers
Differences between the proposed and final rules include:
- Premium amounts are no longer mandatory on the SBC.
- If eligible for coverage but not yet enrolled, plans may send a paper postcard electronically or through regular mail to provide instructions for accessing the SBC online.
- "Best efforts" allowed for describing terms that do not lend themselves well to plain language; e.g., tiering for prescriptions and providers.
- Coverage examples illustrative of how plans would cover treatment and services were reduced from three medical scenarios to two (Having a baby and Managing type 2 diabetes).
- SBCs for group health plans may now be included with other documents (e.g., summary plan description) as long as it is "prominently displayed" at the beginning of the document.
On February 9, 2012, the Department of Health and Human Services’ Center for Consumer Information and Insurance Oversight (CCIIO) issued its final rule regarding the Summary of Benefits and Coverage provision.
The rule and accompanying guidance provide detailed instructions about what insurers and health plans must do to comply with Section 2715 of the Patient Protection and Affordable Care Act (PPACA).
The rule requires that insurers and health plans provide a standardized Summary of Benefits and Coverage (SBC) and Uniform Glossary to consumers "when shopping for coverage, enrolling in coverage, at each new plan year, and within seven business days of requesting a copy from their health insurance issuer or group health plan."
The rule applies to employees and dependents of domestic and international group and individual health plans. It applies to all fully insured and self-insured plans, regardless of grandfathered status. It does not apply to Medicare plans.
The penalty for "willful" non-compliance is $1,000 per enrollee for each failure to comply.
Since this is a final regulation, there is no comment period.
Intent of Regulation
In developing the regulation, HHS stated that its aim is to help consumers understand and evaluate their health insurance choices by providing a "simple" consistent document that outlines benefits and coverage in plain language. It may be provided in paper or electronic form under current ERISA electronic distribution rules.
- For participants enrolling or reenrolling at open enrollment (including late enrollees) – prior to the first day of open enrollment beginning on/after 9/23/2012
- For participants enrolling other than through open enrollment (including newly eligible and special enrollees) – starting on the first day of the plan year beginning on/after 9/23/2012
- For SBCs provided to insured plan sponsors – immediately on 9/23/2012 upon application, when changes occur, at renewal and upon request
- Immediately on 9/23/2012
Many of the requirements set forth in the HHS proposed rule published August 21, 2011 continue to stand. The SBC must be provided in a consistent four-double-sided-page format with 12-point font. Individuals must be informed in writing 60 days ahead of any significant plan changes that affect the SBC (other than in connection with a renewal or reissuance of coverage). And, it must include a customer service phone number and internet address for questions and copies of plan documents. See sidebar above for a sampling of differences.