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Assembly Panel Ok’s Egan, Benson & Sumter Bill Requiring Health Insurers to Use Standard Explanation of Health Benefits Forms

(TRENTON) – Legislation sponsored by Assembly Democrats Joseph Egan, Daniel Benson and Shavonda Sumter that would create a standard written explanation of benefits form to be used by all health insurance providers in New Jersey was advanced by the Assembly Financial Institutions and Insurance Committee on Monday.

The bill (A-2140) requires health insurance carriers issuing health benefits plans in New Jersey to provide a standardized written explanation of benefits form (commonly referred to as an EOB) to a covered person whenever a claim is generated under the covered person’s health benefits plan.

“Using standard forms can help make confusing EOBs, which can vary in length and detail, more user friendly,” said Egan (D-Middlesex/Somerset). “It is important that people be well-informed about their benefits, especially what services are covered since they would be footing the difference.”

“Many of these forms, with their convoluted industry terms, can be hard for the average person to decipher,” said Benson (D-Mercer/Middlesex). “Having one standard form that is simple and straightforward is not only practical, but it makes for a more knowledgeable health consumer.”

“An explanation of benefits form is meant to be understood by the patient and caregiver” said Sumter (D-Bergen, Passaic). “This is their statement of benefits; so, it must be plainly written in clear terms that any individual can easily comprehend.”

Under the bill, the Commissioner of Banking and Insurance would be charged with designing a standardized form that is clear and easy for a covered person to understand, and is consistent with the “Life and Health Insurance Policy Language Simplification Act” for insurance carriers to use.

The form would include, but not be limited to, a summary of current services, including the cost of service, the amount paid by the carrier and the amount to be paid by the covered person; an explanation of the reason for benefit denial, if any; and a summary of the covered person’s policy.

The bill will now go to the Assembly Speaker for further consideration.