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PPACA Uniform Explanation of Coverage

June 3, 2011


One of the new benefit summaries required by the Patient Protection and Affordable Care Act (PPACA) is a "Uniform Explanation of Coverage." This document will serve as a "mini-SPD" by providing a summary and explanation of benefits and coverage provided under a group health plan. By law, the notice must be no longer than four pages, and must use print no smaller than 12-point font. Among other disclosures, the notice must include the following:

• Uniform definitions of standard insurance and medical terms;
• The plan's cost-sharing provisions;
• Continuation of coverage provisions;
• Examples to illustrate common benefits scenarios, including those pertaining to pregnancy or chronic medical conditions; and
• An Internet web address where a copy of the actual coverage policy or certificate of coverage can be reviewed and obtained.

The obligation to provide the new Uniform Explanation of Coverage will become effective on March 23, 2012, without regard to the plan year of the applicable plan. The summary will need to be furnished to employees who enroll in the plan on or after that date, and then during each subsequent open enrollment.

PPACA requires that the Uniform Explanation of Coverage be developed by the Department of Health and Human Services (HHS) in consultation with the National Association of Insurance Commissioners (NAIC) and other working groups. A model was required to be issued by the HHS by March 23, 2011, which the HHS has not yet done. However, last month, the NAIC provided its working model to the HHS. From what I hear, the HHS will be issuing the official templates within the coming months, and likely will be very similar to the version created by the NAIC.

Links to the NAIC models (both a template and a sample) are below. Interestingly, while the law requires that the summary be no longer than four pages, the sample is six pages long. This supports the view of many of us that the authors of this section of PPACA did not have a full appreciation of the difficulty in condensing all the required information in four pages.

NAIC Template
NAIC Summary of Coverage

You may wish to review the preliminary models to get a sense as to how and when to begin developing the Uniform Explanation of Coverage for your own plans.

For further information or questions regarding the Medicare Part D creditable coverage disclosure rules, please contact the Schwabe attorney with whom you work or Wally Miller at 541-686-3299 or