Transparency in Health Coverage
As we discussed in our CAA webinar last July and our January compliance update, new transparency in coverage requirements apply to group health plans and health insurers in the individual and group markets. These rules require plans and issuers to disclose certain price and cost information to participants, beneficiaries and enrollees.
These provisions only apply to non-grandfathered coverage, including both insured and self-insured group health plan sponsors. The requirements take effect in three phases, as follows:
- Jan. 1, 2022: Detailed pricing information must generally be made public for plan years beginning on or after Jan. 1, 2022 (though extended to July 1, 2022, as mentioned below).
- Jan. 1, 2023: A list of 500 shoppable services must be available via the internet-based self-service tool for plan years beginning on or after Jan. 1, 2023.
- Jan. 1, 2024: A list of the remainder of all items and services is required for plan years beginning on or after Jan. 1, 2024.
Links and Resources
- On Oct. 29, 2020, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a final rule regarding transparency in coverage.
- Transparency in coverage FAQs were released on Aug. 20, 2021.
Transparency in Coverage Requirements
The Transparency in Coverage Final Rules (TiC Final Rules) require non-grandfathered group health plans and health insurance issuers offering non-grandfathered coverage in the group and individual markets to disclose certain information. The final rule includes two approaches to make health care price information accessible to consumers and other stakeholders, allowing for easy comparison shopping.
Participant, Beneficiary and Enrollee Disclosures
First, most non-grandfathered group health plans and health insurance issuers offering non-grandfathered health insurance coverage in the individual and group markets will be required to disclose personalized price and cost-sharing information to participants, beneficiaries and enrollees (or their authorized representatives). Specifically, plans and issuers must provide personalized out-of-pocket cost information and the underlying negotiated rates for all covered health care items and services, including prescription drugs, through an internet-based self-service tool and in paper form upon request.
- An initial list of 500 shoppable services, as determined by the Departments, is required to be available via the internet-based self-service tool for plan years that begin on or after Jan. 1, 2023.
- A list of the remainder of all items and services will be required for these self-service tools for plan years that begin on or after Jan. 1, 2024.
Second, most non-grandfathered group health plans or health insurance issuers offering non-grandfathered health insurance coverage in the individual and group markets will be required to make available to the public (including stakeholders such as consumers, researchers, employers and third-party developers) three separate machine-readable files that include detailed pricing information.
- The first file must show negotiated rates for all covered items and services between the plan or issuer and in-network providers;
- The second file must show both the historical payments to, and billed charges from, out-of-network providers (historical payments must have a minimum of 20 entries in order to protect consumer privacy); and
- The third file must detail the in-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level.
Plans and issuers will display these data files in a standardized format and provide monthly updates.
These machine-readable files are required to be made public for plan years that begin on or after Jan. 1, 2022. However, the Departments reserved enforcement discretion in their FAQs to apply the following two exceptions:
- Under the first exception, the Departments will defer enforcement of the machine-readable files requirement relating to prescription drug pricing pending further rule-making. Following the enactment of the Consolidated Appropriations Act, 2021 (CAA) – which imposes potentially duplicative and overlapping reporting requirements for prescription drugs – the Departments are currently considering whether the prescription drug machine-readable file requirement remains appropriate.
- Under the second exception, the Department will defer enforcement of the requirement to publish the remaining machine-readable files until July 1, 2022. On July 1, 2022, the Departments intend to begin enforcing the requirement that plans and issuers publicly disclose information related to in-network rates and out-of-network allowed amounts and billed charges for plan years (in the individual market, policy years) beginning on or after Jan. 1, 2022. For 2022 plan years and policy years beginning subsequent to July 1, 2022, plans and issuers should thus post the machine-readable files in the month in which the plan year (in the individual market, policy year) begins, consistent with the applicability provision of the TiC Final Rules.
HHS encourages states that are primary enforcers of these requirements with regard to issuers to take a similar enforcement approach, and will not determine that a state is failing to substantially enforce this requirement if it takes this approach.
Most carriers will address these requirements for their clients (see, for example, information from UHC and Cigna). Employers with self-funded plans should work with their carrier/TPA to ensure compliance.
COVID-19 National Emergency Extended, Deadline Relief Continues
On Feb. 18, 2022, President Biden announced an extension of the National Emergency concerning COVID-19, stating that it must continue in effect beyond March 1, 2022. This extension impacts deadline relief related to the following employee benefit plan deadlines:
- HIPAA time frames—The 30-day period (or 60-day period, if applicable) to request special enrollment.
- COBRA time frames—The 60-day period to elect COBRA coverage; the date for making COBRA premium payments (generally at least 45 days after the day of the initial COBRA election, with a grace period of at least 30 days for subsequent premium payments); and the date for individuals to notify the plan of a qualifying event or disability determination (generally 60 days from the date of the event, loss of coverage or disability determination).
- Claims procedures time frames—The date within which individuals may file a benefit claim under the plan’s claims procedure, and the date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure.
- External review process time frames—The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination, and the date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete.
Under the relief, these deadlines can be disregarded until the earlier of one year from the date individuals were first eligible for relief or 60 days after the announced end of the National Emergency (also referred to as the end of the “Outbreak Period”).
The DOL recognizes that plan participants and beneficiaries may continue to encounter problems when the relief described above is no longer available, due to the one-year limit. Accordingly, plan fiduciaries should make reasonable accommodations to prevent the loss of or undue delay in payment of benefits in these cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established timeframes. Employers should consider affirmatively sending a notice regarding the end of the relief period when individuals are at risk of losing coverage.
The DOL also acknowledges that full and timely compliance with ERISA’s disclosure and claims processing requirements by plans and service providers may not always be possible. In the case of fiduciaries who have acted in good faith and with reasonable diligence under the circumstances, the DOL’s approach to enforcement will be marked by an emphasis on compliance assistance and includes grace periods and other relief.
Some State Insurance Mandates May Affect Health Savings Account Eligibility
Multiple states have adopted copay accumulator “adjustment” laws to try and help individuals afford the high costs of prescription drugs. These laws allow consumers to use coupons from drug manufacturers to reduce their out-of-pocket expenses at the pharmacy, but require their health insurance companies to credit the full cost of the drugs toward their deductibles.
However, last April, the Internal Revenue Service stated that, in its opinion, such laws constitute “other coverage” under existing HSA statutes and could possibly disqualify individuals with HDHP coverage from contributing to their HSA accounts.
Arizona, Arkansas, Arizona, Connecticut, Georgia, Kentucky, Illinois, Louisiana, Oklahoma, Tennessee, Virginia, West Virginia and Puerto Rico already have copay accumulator laws on their books, and several others are considering them. However, Arkansas and Kentucky have protections for HSAs in place, and Arizona, Georgia and Virginia have lesser protections for HSAs. The remaining states would need to amend their rules or pass subsequent ones to bring their laws back into compliance – some of which have already expressed will occur soon.
These laws only control fully-insured plans written out of these states. Employers with fully insured plans in these states should work with their carrier to determine if their policy complies and notify HSA account holders of any possible issues. Additionally, employers might consider not marketing the plan as an HDHP and/or not accept HSA contributions if they believe their employees may not be HSA-eligible due to these laws.