Summarizing Benefits and Coverage

Tuesday, May 1, 2012
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As organizations continue to grapple with requirements of the Patient Protection and Affordable Care Act, the creation of new disclosure requirements has emerged as a particular problem.

Recently, the departments of Health and Human Services, Labor and Treasury extended the deadline for creating a new Summary of Benefits and Coverage until the open-enrollment period beginning on or after Sept. 23. It previously had been March 23.

"I think companies feel like they were rushing to comply since there really wasn't any guidance from the federal government until the regulations came out recently," says Thomas Barker, a partner at Foley Hoag in Washington and former general counsel at HHS.

"It's all well and fine that the requirement exists to issue a [Summary of Benefits and Coverage], but the government never told people what the SBC should contain. So it's really only now that people can focus on it," he says.

The SBCs are intended to benefit employees by creating "clear, understandable and straightforward information on what health plans will cover, what limitations or conditions will apply, and what they will pay for," according to HHS.

This will give them a new edge in deciding which plan will best suit their needs and those of their families or employees," according to HHS Secretary Kathleen Sebelius.

While the extension and new guidelines have given breathing room and additional guidance, organizations must still contend with challenges as they move toward compliance.

Nearly two in five (38 percent) respondents to a study by Woburn, Mass.-based HighRoads, an employer healthcare-compliance and benefits-management company, said the biggest challenge of the new disclosure requirements is resources.

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Other challenges are the review process (26 percent), coordinating distribution (13 percent) and writing or updating content (10 percent).

The survey polled about 2.2 million mid- to large-size employers.

Some organizations -- especially large corporations -- may see the new requirements as confusing and redundant -- especially as many already produce similar documents under Employee Retirement Income Security Act guidelines.

Steve Wojcik, vice president of public policy at the National Business Group on Health, based in Washington, says "most employers already spend additional resources trying to help employees pick out the best employee coverage, so they already go above and beyond what's required by the Department of Labor."

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