ACA takes the mystery out of shopping for insurance

Posted October, 9 2012 by arianne

Consumers seeking health coverage are often in the dark about how different plans work, what they cover, and what out-of-pocket costs will be incurred.  Current plan members may find themselves in a similar situation, resulting in surprise bills due to a lack of understanding of their plan’s benefits. A new Affordable Care Act (ACA) provision, which went into effect September 23, aims to alleviate this problem.

As of September 23, 2012, health insurance plans must provide consumers with a Summary of Benefits and Coverage (SBC) and a Uniform Glossary. These documents must be provided at the time of application, at the time of renewal of coverage, and upon request.  The documents are consumer-friendly, and are meant to assist consumers in making informed decisions when seeking and using coverage.

The SBC is standardized; each plan uses the same template, so that consumers can compare and contrast options when shopping for coverage.  The template is a chart that informs consumers of covered benefits, what costs apply when services are received in-network or out-of-network, and any limitations or exceptions to coverage.  The template includes examples to illustrate how the plan’s coverage functions.  It also contains some basic information on rights to continued coverage, appeal rights, and language access.

The Uniform Glossary educates consumers about health plan jargon. It defines and explains terms such as “deductible,” “balance billing,” and “appeal.”  It uses a diagram to illustrate how the consumer will share costs with the plan in light of the deductible, coinsurance, and out-of-pocket limit.

An SBC and Uniform Glossary must be issued for both employer-based and individual plans. Non-English speakers can request the SBC and the Uniform Glossary in languages other then English.

You can find links to a sample SBC and the Uniform Glossary here.

You can find SBC templates and the glossary in languages other than English here.

Some carriers post the SBC online. Here’s an example.