Labeling health plans: Insurers must list benefits in easy-to-read format

Final rule calls for standardized explanations of benefits

Topics: Health Policy, Market Trends, Strategy

February 10, 2012

HHS on Thursday released final rules for the standardized explanations of benefits that insurers will be required to provide consumers this fall under the federal health reform law.

The new forms are intended to be easy to read, and include a glossary of standard insurance terms and standardized descriptions of what plans will cover. Premium information will not be provided on the forms, but Obama administration officials said the data should be easily accessible from employers or directly from a health plan.

The six-page summary also will include coverage examples that provide estimates of the cost of treatment for a typical enrollee to manage his or her diabetes or have a child. HHS had considered including breast cancer treatments as a third example but dropped it from the final rules.

Steve Larsen, head of CMS' Center for Consumer Information and Insurance Oversight, said, "There was concern expressed that breast cancer versus the other ones was a more complicated treatment scenario, that it wasn't always standardized across insurers or even the type of cancer." Up to six additional coverage examples might be required in the future, Larsen said.

The forms will be required beginning Sept. 23, despite calls from insurers for the rules to become effective 18 months after HHS released them. Insurers are permitted to offer the summaries online but must tell consumers that they can receive a hard copy promptly upon request. Insurers that fail to comply with the rules could pay up to $1,000 per enrollee, Larsen said.

Acting CMS Administrator Marilyn Tavenner said the forms will "allow people to make an apples-to-apples comparison of plans" She said, "If an insurance plan offers substandard coverage in some area, they won't be able to hide it in dozens of pages of text."

Health insurers said that they already provide user-friendly materials to consumers and that the rules will result in duplication and increased costs (McCarthy, National Journal, 2/9 [subscription required]; Alonso-Zaldivar, AP/San Francisco Chronicle, 2/9; Baker, "Healthwatch," The Hill, 2/9).

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