Beginning with open enrollment periods on or after September 23, 2012, employers subject to the Patient Protection and Affordable Care Act must provide employees with a Summary of Benefits and Coverage. The SBC is a plain-language tool for employees to compare medical plan options offered by the employer.
Summary Plan Descriptions required under ERISA, meanwhile, are often dense, complex documents. In fact, the Employee Benefit Research Institute found that SPDs are more difficult to understand than graduate school material.
The SBC and SPD are companion pieces. The SBC is like the "Get Started" summary that accompanies a computer printer. It provides basic information. But when a document jams or gets lost in cyberspace, it's the manual that gives detailed information on how to solve the problem. Likewise, the SBC gives basic information about common medical events. For detailed information, the SPD is the go-to document.
The "average plan participant" requirement in ERISA often gets lost in the burden of legal compliance. After all, the SPD is the document that ends up in court, and courts are generally predisposed to plan participants. The SBC, meanwhile, offers effective ways to improve readability through the use of plain language, short sentences, active voice and second-person pronouns.
Plain language means using the most straightforward way to express an idea. The glossary that accompanies the SBC defines each term with short, familiar words. SPDs, on the other hand, often pepper text with awkward words like "constitutes," "commences" and "renders."
Short sentences rule in the SBC. Unlike SBCs, SPDs often pack information into one long sentence. Plan sponsors and insurance companies should take a tip from the SBC and keep sentences short.
The SBC template achieves a near-perfect score for using active voice. Active voice makes sentences come alive. For example: "The plan provides coverage," and not "Coverage is provided by the plan."
The SBC template connects with the reader by using second-person pronouns (you or yours). If an SPD has taken on a formal or scholarly tone, check for third-person prevalence. For example: "You are required to enter elections online or via the Enrollment Center," not "Employees are required to enter elections online or via the Enrollment Center."
The SBC is just one example of the plain-language movement. Adapting SPDs (and certificates of coverage) to the plain-language standard benefits everyone.
Contributing Editor Leanne Fosbre is a senior summary plan description writer with HighRoads, an HR IT consulting company. She is a certified employee benefits specialist and can be reached at email@example.com.
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