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Diegnan, Egan & Benson Bill Requiring Health Insurers to Use Standard Explanation of Health Benefits Forms Clears Assembly Panel

(TRENTON) – Legislation sponsored by Assembly Democrats Patrick Diegnan, Joseph Egan and Daniel Benson that would create a standard written explanation of benefits form to be used by all health insurance providers in New Jersey was approved Thursday by an Assembly Committee.

The bill (A-1447) 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.

“People should be able to follow these forms explaining health services rendered, especially when it can end up costing them,” said Diegnan (D-Middlesex). “Standardizing these forms not only makes their production more efficient, but it can help make EOBs easier to follow and understand.”

“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.”

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 was released by the Assembly Financial Institutions and Insurance Committee.