New federal regulation preserves access to supplemental benefits products

WASHINGTON -- In a new rule announced today, federal regulators maintained access to a financial planning option that safeguards families from the cost of uncovered medical expenses. The new rule also includes important disclosures that will help consumers better understand the financial products they are considering.

The Departments of Health and Human Services, Labor and the Treasury made critical changes to the final “Tri-Agency” rule on short-term, limited duration health plans that ultimately did not negatively impact supplemental benefits. These benefits are not a form of primary medical coverage and are therefore distinct from the limited medical insurance products targeted by the Tri-Agency regulation. As originally proposed, the regulation would have disallowed many benefits now available to policyholders of certain supplemental products.

“The agencies took care in the final regulations to ensure they did not adversely affect supplemental benefits,” said American Council of Life Insurers (ACLI) President and CEO Susan Neely. “The new disclosure requirements are consistent with life insurers’ commitment to ensuring that consumers are informed on what supplemental benefits products cover and the financial protections they provide prior to purchase.”

Supplemental benefit policies help people pay for health expenses not covered by primary medical insurance.  They can reimburse policyholders for safety modifications to an apartment or home, transportation to a medical facility, co-pays and deductibles, and many other expenses normally paid for “out-of-pocket.”

In a recent Morning Consult survey, 82 percent of women with children believe supplemental insurance benefits are valuable; 77 percent of those who are currently employed say that having the option to purchase this coverage through their employer is appealing.

“Supplemental benefits are important for middle-income families. Some 80 percent of adults with annual incomes between $50,000 and $100,000 view supplemental insurance benefits as valuable for financial protection, said Neely. “We applaud the Administration for making certain that consumers can continue to access the financial protections these products provide.”