By: HUB’s EB Compliance Team

Late on Friday, November 15, the Departments of Treasury, Labor, and Health and Human Services released a proposed rule that would dramatically expand the cost information health plans have to provide. This is part of the Trump Administration’s attempt to create price competition in the health care marketplace (as described in the accompanying fact sheet).

Short Summary

The proposed rule is intended to allow consumers to comparison shop. It has two broad requirements that would apply to all plans (other than those that are grandfathered under the Affordable Care Act):

  1. Group health plans and health insurance carriers would be required to make available to those enrolled in their coverage personalized out-of-pocket cost information for all covered health care items and services through a self-service website. The information would also have to be made available in paper form upon request. In an effort to make it easy to understand, the rule would require the information to be written in “plain language” and in a format similar to the format of an Explanation of Benefits (“EOB”).

     

  2. Group health plans and health insurance carriers would be required to make available to the public the in-network negotiated rates with their network providers and historical payments to out-of-network providers. The information would be made available in a way that researchers, employers, and third-parties (think app developers) could use the information to create price comparison tools.It would be updated monthly.

The goals of the proposal are two-fold. First, it is designed to allow individuals to get estimates of what they would owe so they can comparison shop. Obviously, comparison shopping only makes sense for non-emergency care. Second, the proposal is designed to provide opportunities for innovation and competition to drive price comparison (and presumably lower prices).

Considerations

If this is finalized as proposed, it would be the most dramatic expansion of disclosure obligations for group health plans since ERISA was passed in 1974. However, employers should keep a few thoughts in mind:

  • As HUB often says, these are just proposed rules. Nothing is finalized yet and no changes are immediately necessary.
  • If the rule is finalized as proposed, the disclosure (and related obligations) will be handled by the insurers. Therefore, employers with insured plans need not worry. Self-funded plans that use an insurance carrier’s network should be able to rely on that carrier’s disclosures as well.
  • As the saying goes, “It’s difficult to make predictions, especially about the future.” Having said that, it seems likely that this rule will be challenged in court. The rules around public disclosure will likely be opposed by health insurance carriers who view their price negotiation as confidential and part of the service that they provide as carriers.
  • The rule, if finalized, would not apply to health reimbursement arrangements (HRAs), health flexible spending accounts (health FSAs), or other account-based arrangements.

HUB will continue to monitor the progress of this proposed rule and provide updates as appropriate.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

The information herein is intended to be educational only and is based on information that is generally available. HUB International makes no representation or warranty as to its accuracy and is not obligated to update the information should it change in the future. The information is not intended to be legal or tax advice. Consult your attorney and/or professional advisor as to your organization’s specific circumstances and legal, tax or other requirements.