Looming Deadline for Employers to Comply with Transparency in Coverage Requirements

In response to questions, recently released guidance, and new information we have recently received, please accept this revision to the June Bulletin.

The U.S. Department of Health and Human Services, Department of Labor, and Department of the Treasury have released guidance under the Transparency in Coverage (TiC) rules that take effect on July 1, 2022, with the purpose of providing plan participants with the critical information necessary to make informed decisions about their health care needs. According to the Centers for Medicare and Medicaid Services(CMS), the goal of this legislation is to bring greater competition to the private healthcare industry. For the first time, most consumers will be able to get real-time and accurate estimates of their cost-sharing liability for healthcare items and services from different providers in real-time, allowing them to both understand how costs for covered healthcare items and services are determined by their plan, and also shop and compare health care costs before receiving care. Plan sponsors should be working with carriers and third-party administrators (TPA) to ensure they have the necessary information in the proper format to comply with the new rules by the deadline.

Employer Responsibilities

Non-grandfathered health insurance plans that were in place on or after January 1, 2022, must post pricing information on a public website hosted by the employer, the carrier or a third party. This information must be available no later than July 1, 2022, through a public website and, if requested, in paper format.

Employers who sponsor fully insured group health plans must coordinate with their health insurance carriers to:

Publish this information in written form to all participants, beneficiaries, or enrollees of a group health plan by July 1, 2022.
Create a unique URL, or hyperlink to host a site that publishes two separate machine-readable files (MRFs) by July 1, 2022, as follows:

In-Network: Negotiated rates for all covered items and services between the plan or issuer and in-network providers.
Out-of-Network: Allowed amounts paid to and billed charges from out-of-network providers for all covered items and services provided during the 90-day period starting 180 days prior to the information publication date. This file must include at least 20 historical entries to help protect individual participant privacy.

Employers who sponsor self-insured group health plans must work with their TPA to publish this information to all participants, beneficiaries, or enrollees of a group health plan on time.

The following is suggested verbiage to include with the link:

“This link leads to the machine-readable files that are made available in response to the federal Transparency in Coverage Rule and includes negotiated service rates and out-of-network allowed amounts between health plans and healthcare providers. The machine-readable files are formatted to allow researchers, regulators, and application developers to access and analyze data more easily.”

Exemptions

Certain grandfathered health plans which have continuously been continuously in place since March 23, 2010, are exempt from this Transparency in coverage reporting requirement, as long as they maintain their grandfathered status under the applicable rules.

Potential Liabilities

A self-funded group health plan may contract with a third-party administrator to implement some or all requirements of the rule on behalf of the plan. However, plans should be aware that they ultimately remain responsible for any MRF failure.

A carrier for a fully-funded plan will be responsible for any MRF failure as long as it is required in writing to ensure a plan’s compliance.

Additional Transparency in Coverage Information

Per the regulation, anyone in the United States should be able to access this link on the public website without any requirement such as a password, account setup, login credentials, a fee, or an age restriction.

The MRF must be updated on a monthly basis, so plan sponsors should establish processes to coordinate regularly with the carrier in an insured plan and with the TPA in a self-funded plan.

What Action Is Needed Now?

At this time, Plan Sponsors need to ensure that the machine-readable files are available online for all participants, beneficiaries, or enrollees of a group health plan by July 1, 2022. No other notices are needed to be sent to employees at this time.

TRANSPARENCY IN COVERAGE – TIMELINE
Date	Action Required	Done by	Comments
1/1/22 7/1/22	(Original due date of 1/1/22 was pushed out six months, to 7/1/22) Make public the in-network rates, out-of-network allowed amounts and billed charges, and in two machine-readable files (MRF). The first MRF must disclose a plan’s negotiated rates for covered items and services for all in-network providers. The second MRF must show the historical payments and billed charges from out-of-network providers. This file should include at least 20 historical entries to help protect individual participant privacy.	Plan Sponsors (employers) In practical terms, the carriers and third party administrators need to provide this data, but ultimately it falls back on Plan Sponsors (e.g. the employers) to ensure compliance. The Plan Sponsor is the one who will face non-compliance penalties.	Monthly updates required
1/1/2023	Provide out-of-pocket cost estimates for 500 shoppable items and services in an internet-based, self-service tool for members, in addition to in-network rates and out-of-network allowed amounts.		Monthly updates will be required Waiting on final rulings & guidelines
1/1/2024	Self-Service tool providing cost estimates, in-network rates, and out-of-network allowed amounts for all covered items and services, including prescription drugs.		Monthly updates will be required Waiting on final rulings & guidelines for self service tool design
TBA	MRF with historical prescription drug prices.		On indefinite hold, pending outcome of legal challenges from Pharmaceutical Care Management Association
			Rev A – 6/10/2022