Health Care Reform Changes for 2012

Several changes prescribed by the Affordable Care Act that affect group health benefit plans are effective in 2012.

Summary of Benefits
Group health plans must provide a four-page (double-sided) summary of benefits and coverage (SBC) and access to a separate glossary with uniform definitions of specific medical and coverage-related terms to all eligible individuals. The purpose of the SBC is to help these individuals understand their current coverage or the differences in the coverage and benefits between health plans when they are shopping for a new plan. Recently, the Department of Health and Human Services, the Department of Labor and the Internal Revenue Service (the Departments) have issued proposed regulations for the requirements of the SBC as well as a model format. Comments on the proposed regulations were due in October, and final guidance should be issued within the next several months. The Departments have postponed the original March 23 mandatory distribution date until final guidance is issued. Physicians Care will produce SBCs on behalf of our clients whenever the distribution date is determined.

Advance Notice of Material Modifications
Group health plans must inform participants of any material modification no later than 60 days before the effective date of the change. This advance notice applies only if the change is not reflected in the most recent SBC provided and if it occurs mid-plan year. Further, plans are not required to provide this advance notice until they are required to provide the SBC.

New Premium Tax on Health Plans
The annual federal premium tax on group health plans to fund comparative effectiveness research programs begins on the first plan year beginning after October 1, 2012. The fee equals $1 per covered life for the first year and $2 per covered life thereafter. The Internal Revenue Service has requested comments on how the fee should be calculated and paid.