By: HUB’s EB Compliance Team

In nearly all our major purchase decisions, we are aware of the price of the product or service before we agree to pay. One notable exception is health care. However, with some recently passed laws, this is about to change quickly. The momentum is building within Congress and federal agencies to make health care price transparency a reality when we engage with hospitals and providers. Even employer sponsored health plans have a role to play in this future.

In 2019, the Centers for Medicare and Medicaid Services issued an initial rule on hospital price transparency under the Affordable Care Act. Last November, federal agencies finalized a series of health plan transparency rules we detailed here. Congress subsequently weighed in and added price transparency rules of their own in the Consolidated Appropriations Act, 2021 (“CAA”), which we detail here. Some of the originally identified implementation dates conflicted when they were first released. Since then, some of the conflicts were resolved with the issuance of an issued by the Departments of Labor, Health and Human Services (HHS), and the Treasury. We anticipate additional regulations and guidance will be released until these transparency rules are fully implemented

Below is a high-level summary of what we know so far. Given that the obligation for most of these transparency rules ultimately falls on the group health plan, employers should start paying attention to these new requirements and consider the following 

  • Insured plans: The responsibility for the plan’s compliance falls primarily on the insurance carrier, unless otherwise noted. Therefore, employers should confirm they are making progress on this requirement.
  • Self-funded plans: The legal responsibility for plan compliance falls on the plan itself and its fiduciaries, including the employer (unless otherwise noted). However, most employers will rely on their TPA because the TPAs have all the information necessary to produce the required disclosures.  Therefore, employers that sponsor self-funded plans should confirm with their TPAs that they will be handling these requirements. Contractual amendments will likely be required.

 

Summary of Transparency Requirements

Rule

Effective Date

Responsible Party

High-Level Summary

Hospital Price Transparency

1/1/21

Hospitals

Hospitals required to post list of prices in publicly-available machine readable files and a consumer-friendly display for certain shoppable services.

Prescription Drug Cost Reporting

12/27/22* and no later than June 1 for each year thereafter

All group health plans

Plans must submit prescription drug cost and spending information and certain plan information to the Departments of HHS, Treasury, and Labor.  The drug cost and spending information primarily focus on the “Top 50” drugs either by cost or cost increase.  The plan information includes number of participants, premiums paid, and the employer/employee split in premiums.

Broker/Consultant Fee Disclosure

12/27/21 with certain exceptions for existing contracts

All ERISA-covered group health plans (including FSAs, HRAs, and some EAPs)

Brokers and consultants must disclose their compensation prior to be engaged to perform services and when contracts for services are renewed or extended.  If not received, employers should request to avoid a prohibited transaction.

Group Health Plan Payment Information

7/1/22 for plan years beginning after 1/1/22 and before 7/1/22; for other plans, the first plan year on or after 7/1/22*

Non-grandfathered group health plans

Required to make 2 separate files available that include:

1.       In-network rates.

2.       Historical out-of- network payments and billed charges for most services.

 

The rules originally required a machine-readable file of in-network negotiated rates and historical net prices for all covered prescription drugs. However, enforcement of that provision has been delayed until further notice.*

Automatic Advance EOB (from the Consolidated Appropriations Act, 2021)

Enforcement delayed until rules are issued.*

All group health plans

Doctors, hospitals, or other providers must ask if the individual is enrolled in a health plan at the time service is scheduled.  If the individual is enrolled in a health plan, the provider must submit a good faith estimate of the cost to the health plan.

The health plan is then required to issue an advance explanation of benefits that estimates the amount the plan will pay and the individual will pay.

Continuing Care Warning

Plan years beginning on/after 1/1/22

All group health plans

Plans will be required to notify patients if they are receiving continuing care with a provider and the plan’s contract with that provider is terminated. It gives the individual the option to continue care with that provider or at that facility under certain circumstances and requires the provider to accept the in-network payment from the plan or carrier.

 

Provider Directory Requirements

Plan years beginning on/after 1/1/22

All group health plans

Plans will be required to keep their provider directories up to date.

ID card requirements

Plan years beginning on/after 1/1/22

All group health plans

Plans must add information to health insurance cards.  Specifically, the cards must include deductibles and out-of-pocket maximums (both in-network and out-of-network).  They must also include a phone number and web address where individuals can obtain consumer assistance information (e.g., search or ask if a provider is in-network).

No Surprises Act / Surprise Billing Prohibited

Plan years beginning on/after 1/1/22

All group health plans

Prohibits “surprise billing” in nearly all circumstances, with limited exceptions (e.g., where an individual agrees in advance to pay a provider’s out-of-network rate).  Specifies how plans should calculate reimbursement and cost-sharing amounts for out-of-network services (including air ambulance).  Establishes an arbitration process for payment amount disputes.

Also requires plans and providers to give notice to individuals of these protections.  Additionally, claims related to emergency services and air ambulance services are subject to external review.

Self-Service Advance EOB (from health plan transparency rules and the Consolidated Appropriations Act, 2021)

Plan years beginning on/after

1/1/23 for all services*

All group health plans

Group health plans must offer a self-service cost comparison tool that will allow individuals to obtain an “advance EOB” for services on their own without a provider request.  (Note there are some overlapping data elements with the Automatic EOB, but they are not exactly the same.)

*Enforcement of this provision was delayed until the date or event specified in this chart.  The original effective dates and delays are explained in more detail in our article here.

When we say “all group health plans” above, the typical ACA exceptions for retiree-only plans and excepted benefits apply.  In other words, those plans are not subject to these rules. However, "all group health plans" does include grandfathered plans as they are subject to these rules.

Takeaways

As mentioned above, we anticipate additional regulations and guidance will be released until these transparency rules are fully implemented. The most significant challenge relates to timing, with so many rules coming online on or around January 1, 2022. We have already seen some of the conflicting details and implementation dates harmonized by the federal agencies in FAQs. Additional rules are projected to be released this year, with the remainder coming later. To the extent rules are not issued, good faith compliance with the above requirements should suffice. In the meantime, as noted above, employers should work with their carriers or TPAs to make sure these obligations are being implemented.

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

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only, and is not intended to constitute legal or tax advice as to an organization’s specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your organization’s particular needs.