Recently we spoke about a simple, but important change to employee W-2s that is taking place due to the Affordable Care Act (ACA or Healthcare Reform). Additional changes rolling out in 2012 are designed to simplify paperwork and standardization of coverage for employers and employees.

    Cigna has a very easy to understand definition of standardization of coverage per ACA, the following is what employers can expect:


    Effective with plan years beginning March 23, 2012, all health insurers and self-insured employers must give people who apply for and enroll in individual or group health plans a standardized Summary of Benefits and Coverage including:

    • A four-page benefits summary describing plan benefits, cost sharing and limitations
    • A “Coverage Facts Label” (CFL) illustrating consumer costs based on the specific plan’s benefits for common medical scenarios, currently identified as: maternity, breast cancer treatment and diabetes management
    • A glossary of standard medical and insurance terms
    • Customer service phone number and a website to review or obtain a copy of their full policy or certificate

    Health care reform requires the standardized benefits summary:

    • Be no more than four pages
    • Be printed in 12-point font
    • Be written in appropriate language that is respectful of culture
    • Use terms most people understand

    The benefit documents must also include dollar values for:

    • Daily hospital room and board
    • Miscellaneous hospital services
    • Surgical services
    • Physician services
    • Prevention and wellness services
    • Prescription drugs
    • Mental health benefits
    • Other benefits

    The ACA says documents must also include:

    • The exceptions, reductions and limitations of the plan’s coverage
    • Details on the plan’s cost-sharing rules
    • How coverage renews or continues
    • A statement indicating the Summary of Benefits is not a policy, and the full policy can be reviewed for details on how to use the plan.

    Important Note – All plans regardless of grandfathered status will be required to pay $1,000 per enrollee for what is considered willful non-compliance.

    If you found this information helpful, please click on the information below for a wealth of knowledge from FosterThomas and our partners:

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