Health Care Reform Update: SBC Rules; Voluntary Enrollment

We have once again partnered with our friends at UBA to bring you the latest Health Care Reform Update:
Employers Get More Flexibility in Health Care Plan Communications Rule
Clarifications made by regulators in the recently released FAQs regarding summary benefit and coverage (SBC) statements include making clear that separate statements do not have to be provided for each coverage tier.  Also, regulators said they do not intend to impose penalties during the first year the requirement is in effect, so long as employers are working in "good faith" to comply.

Expert Views on Approaches to Encourage Voluntary Enrollment
The Patient Protection and Affordable Care Act as amended (PPACA) mandates that individuals, subject to certain exceptions, obtain health insurance coverage or pay a financial penalty beginning in 2014 -- the "individual mandate."  Because of the possibility that legislative or judicial action could result in a change to, or elimination of, the mandate, Congress asked the Government Accounting Office (GAO) to identify potential alternatives to encourage, rather than require individuals to obtain private health insurance coverage. 

The experts interviewed by the GAO discussed nine specific approaches to encourage voluntary health insurance enrollment during our interviews.  The approaches are summarized below, generally presented in the order of frequency with which they were proposed by the experts for consideration.

• Modify open enrollment periods and impose late enrollment penalties.
• Expand employers' roles in auto-enrolling and facilitating employees' health insurance enrollment.
• Conduct a public education and outreach campaign.
• Provide broad access to personalized assistance for health coverage enrollment.
• Impose a tax to pay for uncompensated care.
• Allow greater variation in premium rates based on enrollee age.
• Condition the receipt of certain government services upon proof of health insurance coverage.
• Use health insurance agents and brokers differently:
• Exchanges or small employers that do not offer insurance could hire agents and brokers to assist uninsured individuals or employees to select and enroll in appropriate plans.
• The MLR requirement in PPACA could be amended to provide insurers with more flexibility to use premium revenue to compensate brokers for providing certain value-added services, such as identifying opportunities for explaining variations in plans through the exchanges for individuals as well as opportunities for premium tax credits and cost sharing reductions.
• Agents and brokers could be paid a flat fee for enrolling previously uninsured individuals in qualifying coverage in the exchanges.
• Require or encourage credit rating agencies to use health insurance status as a factor in determining credit ratings.

In discussing these approaches, four key themes emerged:

• Experts emphasized that most people would prefer to purchase health insurance coverage; however, to the extent that high cost is a barrier, the use of financial incentives is key.
• Regardless of the particular approach taken to increase voluntary enrollment in the absence of an individual mandate, the availability of affordable, high-quality health care plans with a basic set of benefits, and full coverage of preventive care services is essential to encouraging voluntary enrollment in the coverage.
• Strong marketing and public education from trusted, community-based sources informing people about their health care choices, their costs, and the consequences of not enrolling in a timely manner are important.
• Convenient access to the health insurance system through multiple access points staffed by knowledgeable individuals would further facilitate enrollment.

Experts noted that various approaches would have different impacts on encouraging voluntary enrollment, and that a combination of multiple approaches holds more potential to encourage voluntary enrollment than any single approach.  Furthermore, they emphasized that independent research is required to fully evaluate the potential effectiveness and legal or other implications associated with any approach or combination of approaches.
The full report can be found at: http://www.gao.gov/assets/100/97317.pdf.