Prepared by the Baldwin Regulatory Compliance Collaborative

Health Plan Price Transparency Plan Sponsor Action Steps

Health plan price transparency is designed to help consumers know the cost of covered items or healthcare-related services prior to the date upon which they receive care. By way of background, on October 29, 2020, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the “Departments”) issued final rules (“TiC Final Rules”) to effectuate this objective. This article focuses on the TiC Final Rules, and more specifically, on Phase I’s implementation requirements.

The TiC Final Rules adopted a three-year phased-in approach for implementing its disclosure of cost-sharing information requirements. Phase I became effective beginning with plan years on or after January 1, 2022 (the Phase I implementation date), in which most health plans and issuers of group or individual health insurance (other than grandfathered health plans) are required to begin posting pricing information for certain covered items and healthcare services in separate machine-readable files (“MRFs”). It is believed that this information can be used by third parties, such as researchers and application developers, to help consumers better understand the costs associated with their healthcare. Additional requirements relate to the operation of an internet-based pricing tool and phase in beginning January 1, 2023 (Phase II) and January 1, 2024 (Phase III).

Specifically, in Phase I, plans and issuers were required to disclose the following items in MRFs:

1. In-network provider negotiated rates;
2. Historical out-of-network allowed amounts; and,
3. Drug pricing information.

The Departments announced a delay in enforcing the implementation of the first two items above until July 1, 2022, for those plan years beginning between January 1 and July 1, 2022. For 2022 plan years beginning after July 1, MRFs must be posted in the month in which the plan year begins. In addition, an indefinite delay was announced with respect to disclosing drug pricing information, pending further review by the Departments.

This information must be delivered in separate MRFs and posted on a public internet website (or in writing, upon request), to promote public access to health coverage information. Cost estimates must be provided in real-time based on cost-sharing information that is accurate at the time of the underlying request. It is anticipated that access to this information will assist consumers in the evaluation of healthcare pricing, and that this evaluation will, in time, lead to reductions in healthcare spending.

PLAN SPONSOR REQUIREMENTS

Plan sponsors (both fully insured and self-insured) also share liability with the carriers and third-party administrators (“TPAs”) such that in the event a carrier or TPA fails to comply with some or all the requirements, the plan sponsor could be held liable. Therefore, it is very important for all plan sponsors to obtain, in writing, that the carrier and/or the TPA will be assuming responsibility with compliance.

The Departments have made it clear that the requirements they have laid out are merely an initiating point, and that additional actions may be required at a later date and/or installed on a voluntary basis by plans and issuers, to fulfill the requirements and the spirit of the TiC Final Rules. The following is a set of action steps that plan sponsors should consider complying with for the upcoming July 1 Phase I enforcement deadline:

Fully Insured Plan Sponsors

• Take an inventory of benefit plans to determine which plans are subject to the transparency in coverage requirements.
• Consult with the respective insurers to confirm, in writing, that they will be hosting the MRFs on their public website.
• If the insurer retains responsibility for hosting the MRFs, consider posting a link on your public website to these files (maintained on the insurer’s public website) no later than your enforcement effective date, unless directed otherwise after consulting with your counsel and/or carriers.
• To the extent you have carved-out certain health benefits, determine whether the insurer/TPA for the medical plan, or the carve-out benefit provider, will be establishing and housing the MRFs for these benefits, and post a link to that website.

Self-Insured Plan Sponsors

• Take an inventory of benefit plans to determine which plans are subject to the transparency in coverage requirements.
• Work with the TPA to ensure the MRFs meet regulatory guidelines and assign responsibility for posting the files onto a public website.
• If the TPA will be posting the MRFs onto its public website (or creating a public website on your behalf), confirm, in writing, that the TPA will be providing a link to this website in time to comply with the enforcement deadline. If you will be creating your own public website, you must do so, no later than the enforcement deadline.
• Review service agreements with TPAs and enter into new contracts or amend existing contracts, if necessary, to reflect any services and costs involved with complying with these additional requirements.
• To the extent that you have carved-out certain health benefits, determine whether the insurer/TPA for the medical plan, or the carve-out benefit provider, will be establishing and housing the MRFs for these benefits, and post a link to that website.

ADDITIONAL INFORMATION

Read more information regarding the TiC Final Rules here. For questions regarding this Legislative Update or any other related compliance issues, please contact your Burnham Benefits Consultant or Burnham Benefits at 949‐833‐2983 or inquiries@burnhambenefits.com.

This Legislative Update was prepared by the Baldwin Regulatory Compliance Collaborative (the “BRCC”), a partnership of compliance professionals offering client support and compliance solutions for the benefit of the Baldwin Risk Partners organization, which includes: Jason Sheffield, BRP National Director of Compliance; Richard Asensio, Burnham Benefits Insurance Services; Nicole L. Fender, the Capital Group; Bill Freeman, AHT Insurance; Stephanie Hall, RBA/TBA; Caitlin Hillenbrand, AHT Insurance; Paul Van Brunt, Baldwin Krystyn Sherman Partners (BKS); and Natashia Wright, Insgroup.

Burnham Benefits and the BRCC do not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with applicable federal and state law requirements, and is based on our interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.