The Secretary of Health and Human Services has recently issued new Rules and Regulations, one after another. Unlike at least one other, more controversial Regulation, these are now in final form and they did not draw political fire or the attention of a religious organization.
One Regulation with immediate effect is to require Health Insurance Plans and Companies to issue Summaries of Benefits and Coverage. These forms are standardized. They are intended to be written and distributed in an "easy-to-read, easy-to-understand" format. The effective date is September, 2012 but the Regulation is in final form now. See Noam N. Levey, "New Rules For Health Plans Require Clear Summaries of Benefits" (Los Angeles Times Online, Friday, February 10, 2012).
Another new Regulation would require 80 percent of collected Premium money to be used to fund actual Healthcare. The remaining 20 percent can be used by Health Insurance Companies to pay so-called overhead expenses, such as CEO salaries. If a consumer pays Premiums greater than the 80-20 "medical loss ratio" mandated by the Regulation, she, he or it is entitled to a refund of the excess amount the next year. Parenthetically, California has adopted a similar Regulation but the California Regulation calls for the calculation of 80% - 20% to be made when a Health Insurance Company files for its Rates in a given year, while the Federal Regulation apparently is based on a calculation which is made instead after consumers have paid the annual Premium. See "Regulation: Health Insurers Must Put More Premiums Into Medical Care" (Insurance Journal Online, Thursday, February 9, 2012).
More Regulations? Yes. Many will benefit your clients. Take a look at them. More to come, as they say.
The author is Co-Chair of the Health, Life and Disability Insurance Subcommittee of the American Bar Association's Insurance Coverage Litigation Committee.
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