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Health Care Reform:

Health Insurance & Affordable Care Act

Your Guide to Health Insurance Paperwork

Health insurance comes with a flood of paperwork, and much of it includes unfamiliar words and phrases. There are four main types of documents you'll receive. You will receive the first two -- the summary of benefits and coverage, and the uniform glossary -- when you sign up for a health plan and each year when you renew your plan. The second two -- an explanation of benefits, or EOB, and medical bills -- you receive when you use your insurance.

The guidelines below will help you understand the purpose of each document and why it's important. This will help you spot billing mistakes and help you learn how your insurance works and what charges you have to pay.

1. What is the summary of benefits and coverage?

The Affordable Care Act requires all private insurers and employer health plans to provide a list of what benefits are included in the plan and the details of their coverage. The summary must use plain language that is easy for the average reader to understand. A sample form can be found here.

2. Why is the summary of benefits and coverage important?

In addition to listing your benefits and the coverage details, the summary includes information on:

  • Your appeals and grievance procedures
  • Whether the plan meets the federal requirements for insurance and exempts you from any tax penalty for not having insurance 
  • Instructions for how to get information in other languages

You should keep your summary of benefits and coverage handy so you can refer to it when you get an explanation of benefits or a bill.

3. What information is on the summary of benefits and coverage?

The summary should include:

  • Your deductible
  • Your cost-sharing amounts -- the portion of the treatment or service that is your responsibility
  • Your out-of-pocket limit
  • Whether the plan has a network of providers you must use and the difference in cost-sharing if you use an out-of-network provider
  • Whether you need a referral to see a specialist
  • Any services or treatments the plan does not cover
  • The plan’s coverage for common medical events like visits to primary care doctors, lab tests, and hospital stays

4. What is a uniform glossary of terms?

The glossary defines some of the most commonly used insurance terms in plain language. These terms include co-insurance, balance billing, appeal, and medically necessary. Your plan will have its own glossary, but you can see an example here.

5. What is an EOB?

Your insurance company sends you an explanation of benefits when it gets a request for payment from one of your health care providers (such as doctors, specialists, laboratories, hospitals, and clinics). The EOB describes the medical treatment you got from the provider. Note: Some HMOs do not provide an EOB because they pay their providers a monthly fixed fee for your care.

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