This report was produced by the Advisory Council on Employee Welfare and Pension Benefit Plans, usually referred to as the ERISA Advisory Council (the "Council"). This report examines Health Care Literacy. The ERISA Advisory Council was created by ERISA to provide advice to the Secretary of Labor. The contents of this report do not represent the position of the Department of Labor (the "DOL").

List of Members who Worked on the Report

Theresa Atanasio, Issue Chair
Michael F. Tomasek, Issue Vice Chair
Sewin Chan, Drafting Team
Karin S. Feldman, Drafting Team
Mildeen Worrell, Drafting Team
Marc LeBlanc, 2010 Council Chair
Theda Haber, 2010 Council Vice Chair
Mary Nell Billings
Denise M. Clark
David Evangelista
Sanford Koeppel
Anna Rappaport
Michael Sasso
J. M. Towarnicky
Kevin Wiggins

Executive Summary

The Council studied Health Care Literacy and heard testimony supporting the proposition that better health literacy will improve health outcomes. The Council developed the following recommendations that it believes will improve health care literacy. Specifically, the Council recommends that the DOL should:

  1. Seek consistency of health care-related terminology among Federal agencies, insured and self-insured plans. The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act ("PPACA" or "Affordable Care Act") requires the Department of Health and Human Services to develop consistent definitions of commonly used terms such as "copayment," "coinsurance," and "deductible." The DOL should use these terms in its communications and encourage use of these standard definitions in all benefit communications.
  2. Permit flexibility in delivery of the summary of benefits and coverage explanation (often referred to as the "four page notice") required under the Affordable Care Act. Plan sponsors will be required to provide this summary of essential group health plan benefits and coverage. The Council views this as a very good opportunity to promote health care literacy and believes that the DOL provide plan sponsors with flexibility to determine the most effective way to distribute this document to plan participants.
  3. Enlist greater use of focus groups. Several witnesses testified that focus groups are a useful tool in developing effective methods of communications, thereby advancing health care literacy.
  4. Encourage culturally appropriate communications. This includes recognizing the ability of employers to freely communicate with different cultural groups by informal communications in addition to those required by ERISA. When focusing on cultural translation of ERISA requirements, communications should translate concepts, not just words.
  5. Support the creation of metrics to determine if health care literacy is improving. This would allow the DOL the means to measure literacy progress.
  6. Promote health care literacy at the elementary school level. Based on testimony presented the Council strongly believes that financial and health literacy can be advanced by instilling vital concepts in children at an early age.
  7. Propose changes to the Summary Plan Description (SPD) regulation to achieve an optimal balance of participant disclosure and comprehension. The Council recommends that the DOL propose revisions to the existing regulations on SPDs for group health plans to provide guidance on how to make this vital disclosure more understandable and focused on what benefits are available under the plan.
  8. Encourage the creation of a standardized Explanation of Benefits form ("EOB").
  9. Issue a Request For Information (RFI) on alternative methods of disclosures in order to gather information on how communication methods can be improved and what alternative approaches can be adopted.
  10. Sponsor a clearinghouse and other methods of sharing information related to health care literacy best practices. The Council received testimony that strongly supports the benefits employers, their employees and families could gain from having a single source to access for reputable information on the current state of health care literacy; current and past efforts; and the success (or failure) of employers and employees with respect to this issue.

Finally, the Council commends the Office of Participant Assistance (the "OPA")(1) and believes more resources should be allocated to the OPA given the importance of the work it does and will be required to do under the Affordable Care Act. It is the sense of the Council that the OPA is doing an excellent job with the limited resources currently available. The Council supports the Secretary in recognizing OPA for the excellent work it does in furthering healthcare literacy and other matters that are of critical importance to employers, plan participants and beneficiaries.


With the certainty of significant change to the healthcare landscape given the enactment of the Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act (collectively the "Affordable Care Act"), the importance of abating the uncertainty Americans experience in navigating the complex U.S. health care system is vitally important.

Prior to the passage of the Affordable Care Act, with respect to health and welfare benefits, employees and other consumers often struggled with the informed selection and use of healthcare coverage, products and services. Testimony suggests that the majority of workers have difficulties making decisions about the extent and type of coverage, where to go for treatment and where they should start in addressing their existing medical issues.

Under the Affordable Care Act, the Secretary of Labor is tasked with developing standards for use by group health plans and group health issuers when compiling and providing participants with a summary of benefits and coverage under the applicable health plan or health care coverage. The Secretary is to consult with various interested parties throughout the industry to develop these materials. The summary of benefits and coverage must use uniform definitions of standard insurance and medical terms.

Having studied retirement literacy and the streamlining of disclosures, the Council understands that oftentimes, no matter how brief and well-written, the disclosures do not resonate with participants or promote a true understanding of benefit choices and limitations. Perhaps of the same mind, employers are increasingly utilizing behavioral economics techniques, establishing onsite clinics and creating innovative wellness program features to improve welfare plan participation and to maximize the value workers receive from their benefit plans.

With this backdrop in mind, the Council studied Health Care Literacy in order to (i) assist the DOL in its development of standards for use by group health plans and issuers, (ii) determine whether the DOL should take proactive steps to assist employers(2) in their innovative efforts to promote health care literacy and efficient employee use of available coverage in addition to the legally required disclosures or materials and (iii) determine whether the DOL should provide tools or other resources to employees and retirees that promote health care literacy, and if so, in what form.

The Council's recommendations arising from this study follow.

The Council's Recommendations.(3)

A. The DOL Should Seek Consistency of Health Care-related Terminology across Federal Agencies and Between Insured and Self-insured Plans.

The Affordable Care Act requires the Department of Health and Human Services to develop consistent definitions of commonly used terms such as "co-payment," "co-insurance," and "deductible." The DOL should coordinate with the Department of Health and Human Services and build upon these definitions so that they are used in plan documents, Summary Plan Descriptions, other required disclosures, and Explanations of Benefits. Sharon Watson, Office Director of the DOL's Office of Participant Assistance, indicated that the DOL's Website already has links to the primary health care Website established by Health and Human Services at The Council agrees with Ms. Watson's suggestion that the uniform definitions developed should also be used on the Websites for both agencies. While there should be universal defined terms, the Council is not advocating that there be uniformity in plan design.

B. The DOL Should Permit Flexibility in the Delivery of the "Four-Pager."

Section 2715 of the Public Health Service Act as amended by the Affordable Care Act requires a group health plan to issue a four page summary describing essential plan provisions. The summary will be required beginning in 2012. The Council recommends that the DOL provide for maximum flexibility in the preparation and delivery of this summary. This flexibility should allow plan sponsors to prepare and deliver the summary in a manner most effective for participants in the plan within parameters established by the DOL.

One witness testified that the delivery and formulation of the summary should be developed with the assistance of focus group testing.

The Council believes that this notice requirement presents a tremendous opportunity for plan sponsors to enhance health care literacy. Creativity should be encouraged so as to ensure that maximum value is achieved from this new requirement.

C. The DOL Should Support the Creation of Metrics to Measure Health Care Literacy.

The Council heard from many witnesses who stressed the importance of health care literacy while acknowledging its inadequacy among workers and the general population. The written testimonies cite much research that suggests improvements to health care literacy would be beneficial for both employees and employers. Greater literacy would increase employees' ability to choose health plan options that are most appropriate for their circumstances and empower them to make better decisions regarding medical treatments, ultimately improving their own and their family's health. Employers would also benefit through reduced medical costs and increased productivity via reduced absenteeism.

But despite this general agreement on the need for improvement, there is little consensus on how health care literacy should be measured or assessed. To track progress in improving health care literacy requires appropriate metrics. Without such metrics, it would be difficult to determine which efforts are making an impact. The Council recommends that the Secretary support efforts to create such metrics, possibly by partnering with the Department of Health and Human Services, other government agencies, industry groups and academic researchers.

D. The DOL Should Provide Information to Employers on How Communications Can Take into Account How People Learn, with Attention to Culturally Appropriate Communication.

Last year's Council report on Promoting Retirement Literacy and Security by Streamlining Disclosures to Participants and Beneficiaries described the greater effectiveness of communications that take into account how people learn. This includes the use of plain language and the adoption of progressive access in written and electronic materials. Examples include "quick start guides" with opportunities (links) for getting more detail on areas of particular interest. This year, the Council again heard from witnesses that these are effective ways for employers to convey health benefit plan and health care related information. The Council recommends that the DOL provide information to employers on how they can improve communications with their employees by adopting these practices.

The Council also heard testimony on the effectiveness of culturally appropriate communication. This includes preparing communications in other languages, as well as tailoring communications so that they are attractive to the target audience and are thus more likely to be read. The Council found particularly compelling one example of how an employer in the fashion industry had increased plan enrollment after making a plan communication resemble a fashion/lifestyle magazine. The DOL should encourage employers to pay particular attention to designing culturally appropriate communications.

E. The DOL Should Propose Summary Plan Description Regulation Changes for Group Health Plans.

The Summary Plan Description (SPD) continues to be "… the primary vehicle for informing participants and beneficiaries about their rights and benefits under the employee benefit plans in which they participate."(4) While the statute and the regulations require the SPD to "… be written in a manner calculated to be understood by the average plan participant,"(5) the testimony provided to the Council indicated that the SPDs are generally written at a level well above the literacy level of more than 40 percent of adults. Additional testimony noted that SPDs have become increasingly complex and legalistic in their descriptions in order to mitigate legal risks.

The Council recommends that the DOL propose revisions to the existing regulations on SPDs for group health plans to provide guidance on making this vital disclosure more understandable and focused on the benefits available under the plan. The DOL should consider whether it would be appropriate for SPDs to have a separate section containing the technical and legally required information not directly related to the health benefits offered under the plan.

The Council also recommends that the DOL allow for the use of two-tier or progressive access techniques requiring the provision of basic, necessary information upfront with clear direction provided so participants and beneficiaries know where to obtain additional specific information. The uniform summary of benefits and coverage required by the Affordable Care Act could serve as the beginning point for this suggested approach.

F. The DOL Should Encourage the Creation and Use of a Standard Explanation of Benefits.

For most participants, the first disclosure they receive after accessing benefits under a health plan is an Explanation of Benefits (EOB) form. The Council heard from numerous witnesses that the EOBs provided by plans are confusing, unclear and incomprehensible. The Council recommends that the DOL encourage the use of a model or standardized template for EOBs. As part of the development of the model, the DOL should consult with stakeholders, including participants, plan sponsors and third-party administrators, and communications experts, as well as the National Association of Insurance Commissioners (NAIC).(6)

The primary purpose of the EOB is to inform participants of how a claim for health services was processed and paid under the plan and what portion of the claim, if any, is the participant's financial responsibility. However, too often the information is presented using codes and descriptions that are not explained or are not understood by the participant.

Several witnesses testified it would be helpful if the information on the EOB and the presentation of this information was standardized. They suggested this standardization process could build on the standard definitions of medical and insurance-related terms to be developed under the Affordable Care Act.(7)

As part of the implementation of the Affordable Care Act, the DOL, together with the Department of Treasury and the Department of Health and Human Services, recently issued an interim final rule and other guidance on the internal claims and appeals and external review processes.(8)

The revised Model Notice of Adverse Benefit Determination,(9) one of the guidance documents issued by the DOL, includes information that could serve as the basis for developing a model or standard template EOB. The Notice contains the relevant components that allow participants to understand how a particular claim was processed and paid. The elements include the amounts charged, allowed and paid under the plan, as well as those portions that are the participant's responsibility (the deductible, co-payment and co-insurance). The Notice also includes the relevant codes for diagnosis, treatment and denial which, under the rule, must be explained.

G. The Secretary Should Commend and Further Support the Outreach Efforts of the Office of Participant Assistance ("OPA").

The Council heard the testimony of EBSA's Sharon Watson, Director of the Office of Participant Assistance (OPA), who recounted several activities currently performed by OPA. For example, OPA currently has over 100 publications in circulation, directed roughly evenly between participants and employers. Additionally, OPA regularly holds educational meetings on topics of interest throughout the country. Based on the foregoing, it is the sense of the Council that the OPA is doing an excellent job with limited resources. The Council respectfully submits that the Secretary should recognize OPA for the excellent work it does in furthering healthcare literacy and other matters that are of critical importance to employers, plan participants and beneficiaries.

In light of the important work that OPA performs, its potential to do more for healthcare literacy and the vital role that it must assume in assisting employers, employees and their families in learning about employer-provided healthcare as it will exist under the Affordable Care Act, the Council encourages the Secretary to make every effort to increase OPA's resources.

The Council heard testimony advocating the creation of forums related to healthcare literacy topics that would invite participation of employers of all sizes. The benefits community could use these forums as a learning and teaching resource to develop methods to better communicate with participants and beneficiaries, especially those that are considered most in need of improved literacy. The Council recommends that the Secretary direct the OPA to take a lead role in creating these forums.

The Council also heard from several witnesses who advocated the use of focus groups as a means of ensuring that individuals better understand and retain information being presented. In light of this testimony, the Council recommends that the Secretary make every effort to provide more resources for conducting focus groups to assist the OPA in developing more effective communications.

It is also the sense of the Council that in order to further healthcare literacy, the OPA should assume a higher profile. Accordingly, the Council recommends that the Secretary direct the OPA to publish its research and publications on the EBSA portion of the DOL Website and in the benefits press. To this end, the Secretary should make every effort to provide OPA with a prominent position on the EBSA portion of the DOL Website.

H. The DOL Should Encourage Elementary School Education on Health, Health Care and Financial Literacy.

Based on the testimony of numerous witnesses before the Council both this year and in previous years, the overwhelming sense of the Council is that financial and health literacy can be advanced by instilling vital concepts in children at an early age. Accordingly, the Council recommends that the Secretary take appropriate measures to work with other appropriate agencies with the overall goal being to encourage elementary school educators to include information related to health care coverage and concepts commonly found in employer-based health plans as part of all children's elementary school curricula. Further, the Secretary should encourage the Department of Health and Human Services to embark on a comprehensive elementary school health and wellness literacy initiative.

I. The DOL Should Issue a Request For Information (RFI) under Applicable Statutory Authority Regarding Alternative Disclosure Regimes for Health Benefits Plans.

The Council heard testimony from a number of representatives who agreed that the most critical forms of communication to plan participants and beneficiaries are all falling short of the intended goal – to convey information to plan participants and beneficiaries regarding what the benefits are and how they work. This concern was raised equally for the Summary Plan Description (SPD), the Explanation of Benefits (EOB), COBRA notices, HIPAA notices, plan summaries, and other required disclosures under ERISA.

ERISA requires that specified disclosures and notices be distributed to plan participants and beneficiaries. Traditionally, the distribution has been by mail, or in some cases by electronic means. The content of these disclosures and notices generally adopt a very legalistic approach to protect the employer and/or plan, and to ensure that the documents are in compliance with the law. Drafting that is premised fundamentally or principally on avoiding legal liability has been shown to get in the way of simple, understandable, effective communication. This format also falls short of reaching the intended users, especially the underserved recipients, including but not limited to language limited persons, sight impaired individuals, and individuals with limited literacy skills.

The Council believes that the Secretary should exercise statutory authority to issue a RFI to employers and plans who are impacted by these requirements; representatives of vulnerable and underrepresented communities; and leading stakeholders, such as the National Association of Insurance Commissioners and the National Institutes of Health. The purpose would be to gather information on how communication methods can be improved and what alternative approaches can be adopted. The Council anticipates that the following issues would be addressed: (1) who are the appropriate users of alternative disclosure; (2) what information is best suited for this process; (3) whether the alternative methods would complement existing disclosure formats and methods or be deemed legally sufficient standing alone; (4) any additional cost/benefit to employer and employees, and (5) the advantages and disadvantages of alternative disclosure.

The anticipated modifications should incorporate changing technology and an effort to embrace these changes; the different methods of learning by certain groups such as multi-tiered approaches of communication, including, but not limited to, audio, video, focus groups; shorter disclosures with a focus of one main topic or issue per disclosure; and the "Frequently Asked Questions" format. In addition, alternative methods of disclosure would be explored, including additional distribution methods for the SPD other than by mail. Including legally required statements in disclosures intended to educate plan participants would be examined with the goal of finding a more appropriate place of inclusion among the plan documents.

J. The DOL Should Establish a Clearinghouse for Studies, Articles, and Best Practices with Regard to Health Care Literacy. In the Alternative, the DOL should Explore a Partnership to Establish the Clearinghouse with HHS, other Federal agencies, NIH, NAIC, and Other Major Stakeholders.

The Council received testimony strongly indicating that employers, their employees, plans and families could benefit from the existence of a single source for reputable information on the current state of health care literacy and the success (or failure) of current and past efforts in this area.

Testimony indicates that certain employers, especially large employers who have the resources to adopt certain modified approaches, are succeeding at promoting health care literacy among their employees, and in some cases the employees' families. In addition, it was demonstrated that many employers struggle with how to bridge the gap between what they are legally required to disclose to employees and developing effective modes of communication.

The passage of the Patient Protection and Affordable Care Act with its numerous additional required disclosures has resulted in a greater level of concern among employers who sponsor health benefit plans regarding on-going compliance; how to best implement the requirements; and how best to achieve good investment returns on their efforts. Many employers have a diverse workforce and they care about reaching each group. As the Council heard, it can be difficult to adapt the required disclosures to certain cultural sensitivities or to adequately translate the requirements into another language. These concerns are not unique to a single employer. Rather, many employers share common concerns, often not knowing of each other or of the solutions being explored.

The creation of a clearinghouse would provide a safe and trustworthy resource for employers and/or plan sponsors to build on successful initiatives taken by other employers, health plans, medical societies and associations, independent non-profits, consumer advocates, and Federal agencies. This resource also would allow employers and plans to draw on best practices for health care literacy, including studies, findings, and recommendations from other employers and employee groups. The Participant Assistance Office of EBSA already has a possible foundation for such an initiative. The Department currently posts on its Website things that are available, including research on health care and retirement issues.

The testimony referred to studies that show if employers can understand the issues, they will care more and make more of an effort to invest for the benefit of their employees and their families. The Council believes that this level of interest can quickly be elevated if there is a forum where larger employers who are committed to health care literacy, wellness programs, and good effective communication, and who have successfully implemented programs can work with smaller employers and mentor them through the process.

The Council anticipates that whether the clearinghouse is established by the DOL or in partnership with the DOL and other major stakeholders, the following steps or approaches would be considered; (1) employers and plans would be encouraged to share the secret of their success in promoting health care literacy; (2) increased outreach to academia, research centers, and "think tanks;" (3) outreach sessions with employers that are designed to develop a voluntary mentoring program among large and small employers to aid in promoting greater health care literacy for their employees would be developed; and (4) increased effort to encourage greater participation of employer-to-employer communication as part of the current education workshops sponsored by EBSA.

Summaries of the Witness Testimony

Helen Darling, National Business Group on Health

The National Business Group on Health is a member organization of over 292 large employers who provide voluntary healthcare benefits to over 55 million Americans. Employers want employees and their families to be well-informed so they can make good choices about their healthcare benefits. Employers have come to understand that more personalized communications work better, with focus on getting more "health" for the money spent, not just more healthcare. Today healthcare benefits are consistently ranked #1 or #2 by employees in terms of most important benefits. Employees need to understand that 80% of their health outcome is up to them.

There is a direct connection between healthcare literacy and better healthcare. According to the Agency for Healthcare Research and Quality (AHRQ), approximately 45% of high school graduates have limited healthcare literacy. Healthcare literacy is one of the key factors affecting healthcare disparities and the proper utilization of healthcare services. Patients with limited healthcare literacy are more likely to suffer from poor care because of unnecessary doctor visits and possible incorrect diagnosis and incur up to four times greater medical expenses than patients with adequate literacy.

In May, HHS announced plans for a "National Action Plan to Improve Health Literacy" to communicate healthcare information clearly to U.S. residents. Their efforts target seniors, racial and ethnic minorities, recent immigrants and refugees, people with less than a high school degree, and those with an income beneath the federal poverty level, as those groups tend to lack healthcare literacy.

With the new healthcare reform and the likelihood that people will be moving between employer plans and the new exchanges, it is very important that we utilize standardized terms and definitions in communications. Ms. Darling urged that the government build on existing initiatives and not start over with our efforts.


  • Improve the user friendliness of Summary Plan Descriptions
  • Base summary of benefits and coverage on the standards required by the Affordable Care Act
  • Permit employers' current SPDs to satisfy the requirements of the Affordable Care Act
  • Reference standard definitions of insurance terms that already exist and do not start over
  • Retain the current federal definition of "welfare benefit plan" and protect ERISA preemption
  • Build on employers and other groups' successes with initiatives such as report cards, checklists, and online calculators, including drawing on best practices
  • Modify the interim final rules for GINA to incentivize employees to complete health risk assessments
  • Defer to HHS to continue to lead the federal government on behavioral economic techniques to foster improved health behaviors
  • Undertake a targeted awareness campaign aimed at younger employees with emphasis on retirement savings to address future healthcare costs
  • Work closely with HHS to create communications about long-term care products and avoid duplication of efforts

DR. Brian Elbel, New York University - Medicine and Health Policy

Dr. Elbel is an Assistant Professor of Medicine and Health Policy at New York University with appointments at both the School of Medicine and the Wagner Graduate School of Public Service. Has a PhD and MPH from Yale University. He studies how consumers make choices that influence their health and healthcare. His work includes a particular focus on how consumers choose health insurance plans. He has a strong emphasis in his work on behavioral economics, a field of study that combines economics and psychology to create realistic models of consumer behavior.

Dr. Elbel focused on three (3) general areas:

  1. What is known about how consumers are generally making choices about their health plans;
  2. Potential behavioral economics solutions to some of the problems that arise when consumers are choosing amongst different healthcare options
  3. What the Department may want to take into consideration with respect to (1) and (2) above.

With respect to (1) above, Dr. Elbel indicated that in general, consumers' use of information is not very high. Through surveys and experimental work, many appear to rely on asking their friends or family which choice to make. He explained that even when data are presented in ways that should make choices easier (e.g., lists are ordered, options are simplified) consumers still often make choices that do not maximize quality or even choose dominated options (i.e., they could have chosen a better plan for a cheaper price, or at least the same price).

With respect to (2) above, Dr. Elbel explained that there is a general premise that consumers are responsive to "nudges," or subtle influences that push consumers in a particular direction but do not necessarily fully dictate a choice. Generally, the idea is that consumers can always opt out or change the choice they are "nudged" towards, but that the path of least resistance will be the choice that is likely to be in the best interest of consumers. He has performed a hypothetical choice experiment using "nudges" in a healthcare setting and found that a fair number of consumers are very accepting of the nudge and are willing to accept where it leads them.

With respect to what (1) and (2) might mean for the Department of Labor in general, Dr. Elbel believes that the current evidence is telling us that some subset of consumers are having trouble processing information about their health choices; the manner in which this information is presented also appears to influence their choices in non-trivial ways. He underscored that the information is complex, multi-faceted, and non-intuitive to many. He believes that behavioral economics solutions, including the use of defaults, hold great appeal and that the Department should take this into consideration when developing healthcare literacy tools and materials for consumers.

Daniel Maguire, EBSA, DOL Office of Health Plan Standards and Compliance Assistance

Mr. Maguire is the Director of the Office of Health Plan Standards and Compliance Assistance. His office is participating in developing regulations with the Department of Treasury and the Department of Health and Human Services under the Affordable Health Care Act, HIPAA, the new Mental Health Parity and Addiction Equity Act, and the Genetic Information Nondiscrimination Act, otherwise known as GINA.

Mr. Maguire commented on two central themes of interest to the ERISA Advisory Council:

  1. Understanding the EBSA's involvement in the process of writing the new Affordable Care Act regulations and guidance; and
  2. Whether, in drafting the new Affordable Care Act guidance, the drafters were taking into consideration best practices for healthcare literacy.

As to the first concern, Mr. Maguire confirmed that his office has been involved in the creation of the Affordable Care Act guidance and Elana Lynett, a senior member of his staff has been involved particularly in the literary issues.

As to the second concern, Mr. Maguire explained that looking at what is out there in terms of best practices for healthcare literacy and what works is a starting point for his office.

Lynn Quincy, Consumers Union

Lynn Quincy, Senior Policy Analyst at Consumers Union, addressed ways to make employee communications about health plans more effective. Ms. Quincy noted that the new standard disclosure form required under the Affordable Care Act brings consistency across the range of individual and group plans, including those that are grandfathered and self-insured. In addition, she urged DOL to make other communications under the Affordable Care Act and ERISA consistent in format and content in order to enhance consumer and participant understanding. She noted that different meanings for the same term, such as "out of pocket limit," led to confusion and that using the same term with the same meaning in all communications, such as explanations of benefits, plan descriptions and other disclosures, would lead to better understanding of how health plan coverage works.

The development of standards and model documents by the DOL, including formatting guidelines, could promote best practices for appealing formatting and plain language writing. Ms. Quincy stressed the importance of field or focus group testing for model communications and she also suggested the DOL develop mechanisms for collecting feedback from participants and plan sponsors on the health plan communications it develops. Ms. Quincy noted the importance of strong enforcement mechanisms for disclosure standards.

Theresa Hay, Health Dialog

Health Dialog is a leading provider of analytics and healthcare decision support programs to 20 million healthcare consumers worldwide. Health Dialog's mission is to reduce unwarranted variation in healthcare as a means to improve the quality of care and uncontrolled cost trends. Health Dialog provides health coaching along with unbiased, evidenced-based information for medical decisions, chronic condition management, and wellness support.

Research shows that patients who have a basic understanding of medical information will do a better job of taking action to promote their own health and wellness, as well as manage chronic illnesses. Whether individuals have GEDs or PhDs, providing health communications that use clear, concise messaging is vital to effectively relaying health information.

Poor quality health communications affect not only the health of individuals but also the long-term success of the healthcare organizations working to improve people's health. Ninety million Americans – nearly half the adult American population – have limited health literacy skills, which significantly reduces their ability to navigate the U.S. healthcare system. This situation creates a marked disconnect between the demands of today's health systems and the actual level of people's health literacy skills. As a result, some speculate that poor health literacy costs the healthcare system from $106-$238 billion a year.

The definition of health literacy used by the U.S. Department of Health and Human Services is "the degree to which individuals have the capacity to obtain, process, and understand basic health information and services needed to make appropriate health decisions." A major cornerstone of health literacy is the use of clear or plain language – an evidence-based approach to clear and effective writing grounded in research on documented design, adult learning theory, health communication, and social marketing principles. As stated previously, nearly half of the US population has limited health literacy skills. Research shows that vulnerable populations include:

  • persons with low education levels;
  • persons 65 and older;
  • persons who speak English as a second language;
  • persons with chronic conditions; and
  • persons with mental health issues.

Health information is not broadly made available in a way that allows consumers with limited health literacy skills to make informed decisions regarding the care options that are best for them and their families.

Preliminary research showed that Hispanic and African American consumers want to be approached in a culturally appropriate way; i.e., in a way that builds a deep and lasting connection.

Participants of Hispanic focus groups prefer:

  • materials that have a focus on the family;
  • materials in Spanish; and
  • materials that include patient testimonials.

Participants in the African American focus groups prefer:

  • materials with images of families;
  • materials with images of African Americans in both the patient and caregiver roles; and
  • materials with health statistics.

This commitment to clear language messaging has inspired the Clear Language Certification Process.

With health reform now enacted, 32 million new people, many with low health literacy, will enter the healthcare system. Creating clear, concise messaging for healthcare consumers is essential to ensuring consumers and their families will get the care they need. Addressing health literacy through plain or clear language messaging should not be mistaken for "dumbing down," but as a way to provide essential information in a straightforward way that makes navigating our complex healthcare system less daunting for consumers.

Sharon Watson, EBSA, DOL Office of Participant Assistance

Ms. Watson is the head of the Office of Participant Assistance ("OPA") in the Employee Benefits Security Administration for the United States Department of Labor. The mission of the OPA is to (1) assist participants with understanding and obtaining their benefits and (2) assist plan sponsors in understanding their obligations in administering benefit plans. Through the third quarter of 2010, the OPA has handled over 300,000 inquiries and recovered $6 million dollars. Approximately 78% of the inquiries involved health benefits and 85% of those inquires involved COBRA.

Ms. Watson said plan sponsors need to understand their obligations. OPA provides workshops for plan sponsors to help them with compliance assistance. OPA also provides workshops with state insurance commissioners and consumer advocacy groups. OPA has established a rapid response team which is designed to provide speedy assistance to laid off workers.

The OPA has a dedicated web page. This web page provides COBRA compliance assistance and Affordable Care Act assistance, among other things.

The OPA focuses on participant education and helping participants obtain and maintain their health care coverage. The OPA has found participants like short communications directed at single issues, while employers like comprehensive guides.

With respect to communications in other languages, Ms. Watson said literal translations do not work. The challenge is to develop language that participants understand; that is clear, concise and accurate; and that can be cleared through legal review. She said focus groups work great but the ability to use them is limited by time and resources. Ms. Watson said that a question and answer format works best for participants. Finally, she said that information targeted for younger generations should use short sound bites.

Thomas Wilder, America's Health Insurance Plans

Thomas Wilder is Senior Regulatory Counsel with America's Health Insurance Plans ("AHIP"). AHIP represents nearly 1,300 health insurers that provide benefits for over 200 million Americans.

Mr. Wilder discussed (i) AHIP support for changes to summary plan descriptions and other ERISA disclosure rules to make them more consumer friendly, (ii) work that AHIP is doing to help improve health literacy, and (iii) specific recommendations for the Council to consider in its report to the Secretary.

Mr. Wilder defined "health literacy" as an individual's ability to understand what he or she is told and to actually make decisions based on that information. Many SPDs are written at a level somewhere between the ninth grade and college graduate, but the literacy of a lot of Americans is far below that level. The disconnect between what people need to know and what they are told is in some respects a function of the laws that set out very specific requirements for what people need to be informed of and what the disclosures have to be. Mr. Wilder stressed that he was not trying to say those laws need to go away. Rather, "the difficulty really is in translating legal requirements into plain English."

With regard to work AHIP is doing to promote health care literacy, Mr. Wilder noted that two years ago, AHIP formed a health literacy task force to take a look at how information was provided to consumers by health plans and by health care providers. As part of this effort, AHIP partnered with Emory University and got a grant from the Robert Woods Johnson Foundation to develop an assessment tool for health plans to use to evaluate their literacy programs and to evaluate the kinds of information they were providing to consumers. The purpose of this tool is to help develop communications and to help train plan personnel to interact with consumers either through written communications or things like nurse call lines so that they can do a better job of promoting health literacy.

Finally, Mr. Wilder offered some recommendations to the Council.

According to Mr. Wilder, the Department needs to take a "fresh look" at the requirements with respect to information provided to beneficiaries and participants, not only SPDs, but all of the kinds of required ERISA disclosures, to make sure that they are more consumer friendly. This work, according to Mr. Wilder, has to build on the work that is being undertaken now pursuant to the Affordable Care Act.

It is important for the Department to be engaged as HHS works on issues such as standard definitions and the standard evidence of coverage requirement. ERISA sets out unique issues with respect to fiduciary responsibility and there are other requirements that are imposed by ERISA that need to be reflected where appropriate in these definitions and in the standard evidence of coverage so that people who are getting their coverage through an employer or union-sponsored plan understand the unique aspect of those requirements.

Another critical component, according to Mr. Wilder, is consumer involvement in the design of these materials through the use of focus groups.

Finally, Mr. Wilder stated that "we need to do a better job of our communications to those individuals who don't speak English as a primary language." A challenge is to make sure information is translated, and to make sure it is culturally appropriate. For example, "grandfather" can be translated into Spanish, but "grandfathering" cannot.

Mr. Wilder is of the opinion that "it's really important that consumers really have an understanding of their coverage options and how their benefits work."

Mary Ellen Signorille, AARP Foundation

Mary Ellen Signorille, Senior Attorney with AARP Foundation Litigation, testified on behalf of AARP. Ms. Signorille noted the challenges confronting people in navigating through the health care system. These challenges are heightened for those with poor or marginal literacy and health literacy skills as they are at greater risk of making decisions that could harm their health or financial situation.

Ms. Signorille reviewed the assessment made by the National Adult Literacy Survey, noting that only 12 percent of adults are well-equipped to navigate the current health care environment, about half had intermediate skills and more than one-third had basic or below basic health literacy. Studies have demonstrated a relationship between low literacy and poor health outcomes. Of particular concern are older persons who rely more on the health system and face declining competencies as well as others, including members of racial or ethnic minority groups and those with lower education levels.

Clear straightforward communications in plain language would help. Other strategies to compensate for literacy deficits include reducing the amount of information to be processed, relating the implications of decision to experience and highlighting the meaning and significance of information. The use of short sentences, the active voice and large print are recommended as well as the presentation and framing of information which can influence decisions.

Different issues arise with web-based material, but they can be designed to facilitate decision making by offering step-by-step guidance. Accessibility of the information can be improved through graphics, multimedia and interactive elements. For those with poor literacy skills, other means of communication, such as audio or video instructions, could be offered.

Ms. Signorilli noted the importance of addressing the need for employers and others to consider the health literacy skills of employees and retirees. In her view, DOL and the other federal agencies implementing the Affordable Care Act could play an important role in assisting employers and plans in the use of innovative and effective communication approaches. She also urged that material developed by DOL and other agencies be tested with focus groups, including populations known to have poor or marginal health literacy skills. Most importantly, she urged the use of consistent formats, uniform terminology and sensitivity to cultural and linguistic preferences.

With respect to SPDs, Ms. Signorille stressed the importance of assuring the accuracy and completeness of the SPD as well as other disclosures. In addition, she suggested that the regulations be amended to provide that if an SPD provides a greater and/or better benefit than that described in the plan document, the SPD must govern.

Lisa Bauer, Adventist Healthcare

Lisa Bauer is the manager of Benefits and Retirement Administration for Adventist HealthCare. She has more than 30 years of experience in the field. As Benefits Manager, she is responsible for writing Plan Summary Descriptions (SPDs) and many other forms of benefits communications. In her testimony she stressed the importance of effective communications to all individuals at all levels.

Ms. Bauer testified that health care literacy is a universal issue that can benefit everyone. She does not see this as an issue which is limited to a single group. She testified that when it comes to using health care benefits, everyone is considered a lay-person, with most people at the same level of understanding. She stated that persons holding PhDs have trouble understanding their Explanations of Benefits (EOBs), and that nearly 50 percent of all adults, regardless of education level, have difficulty understanding prescriptions, appointment slips, informed consent documents, insurance forms, and other health care related materials.

This low level of understanding runs throughout the health care field, Ms. Bauer testified. She stated is was very important to implement steps to develop effective communications, especially to people who have health care coverage and who will use little of their benefits but will pay more than they anticipate in out-of-pocket costs. They do not understand why this is so.

She testified that effective communications should (a) be written at a third grade level; (b) be simple and attractive; (c) include multilevel communications; (d) fully integrate today's technology methods; (e) be written with the use of short sentences; (f) be written in the active voice in a conversational tone; (g) utilize pictures, graphics, simple flow charts, and simple tables; and (h) have information that is easily accessible.

Her testimony stated that there is a strong link between low levels of education and higher utilization of health care benefits. Ms. Bauer testified that adults with the lowest level of functional literacy were found to have three (3) times as many prescriptions. In addition, she cited a study of Medicaid patients that found those reading below a third grade level had average health care costs four (4) times that of the overall Medicaid population.

Ms. Bauer advocated for the use of use of standardized terminology, standard formats, and uniform definitions across the board. She believes this would go a long way to help simplify many of the more significant forms of communications. Also, she testified that less legal terminology should be used in the communication documents to the end users, especially the individuals receiving health benefits and care.

Chantel Sheaks, Buck Consultants

Ms. Sheaks is an employee benefits lawyer and Principal at Buck. Many employers strive for good communications. She shared a few of her clients' techniques, ranging from the very basic to the most high tech. For coverage, tools may be tailored to address a person's recent history. For example, if someone made many doctor visits in the preceding year, a high-deductible health plan, with lower premiums may cost this participant more. Others use very little care, and a PPO provides too much coverage at too high a cost.

She disfavors prescriptive regulation for disclosure as each workforce is unique. DOL should build on its participant outreach efforts by including plan sponsors. Specifically, the DOL should ask employers that are doing a good job to share with employers who want to do a better job, especially small employers that probably can't afford outside consultants. Outreach could take the form of a forum as has been used for fiduciary issues and Form 5500.

She cited "stall talk" as a low cost, low tech, technique. The most common questions and answers are taped to the inside of the toilet stalls. She praised an SPD in magazine format for a fashion magazine's employees, noting that there have to be techniques to get employees to read summary plan descriptions.

She offered Safeway's wellness initiative as her final example. It has a portal where employees can store health statistics, like Body Mass Index (BMI). Safeway rewards "good" behavior like completing a health assessment or lowering BMI.

Health literacy has to be easy. Online systems often require too many clicks. A one stop web page is often more accessible. Relevant information is available at one click.

Employers need to reach out to an employee's family also, as generally, there is a lead decision maker in a family on health issues who may not be the employee.

When money is tight, employers tend to skimp on health literacy. Health literacy impacts productivity, such as utilization of sick days, disability claims, and errors, which, in turn, impacts competitiveness.


  1. The Office of Participant Assistance (OPA) is now the Office of Outreach, Education and Assistance (OEA).
  2. The term "employer" is commonly used throughout. Most of the recommendations, however, would also be applicable to multiemployer plans.
  3. It should be noted that the Council vigorously debated a recommendation that the DOL should provide guidance that would encourage the automatic enrollment of participants in all welfare plans, or at least health plans, but was unable to reach a consensus on this topic. The issues discussed included the potential advantages and disadvantages to workers, fiduciary responsibility issues, plan sponsor concerns regarding potential conflict with state law and interest in reduced administrative burdens.
  4. Amendments to Summary Plan Description Regulation, 65 Fed. Reg. 70226, 70228 (November 21, 2000).
  5. ERISA Section 102(a), 29 USC § 1022(a); 29 CFR § 2520.102-2(a).
  6. Assistant Secretary Borzi, at the November 4, 2010 public meeting, suggested a future Advisory Council might explore the creation of a model EOB.
  7. Section 2715(g) of the Public Health Service Act added by Section 1001(5) of the Patient Protection and Affordable Care Act, P.L. 111-148.
  8. The interim final rule, issued on July 23, 2010, is at 75 Fed. Reg. 43330 and the other guidance, including Technical Releases and model notices, are available at
  9. The notice is available at