By: HUB’s EB Compliance Team

As HUB has detailed in prior articles, there are many overlapping transparency requirements that are coming into effect over the next few years. Some were a part of a rulemaking from 2020 (the “Transparency in Coverage Rules” or “TiC Rules”) while others were enacted as part of the Consolidated Appropriations Act, 2021 (the year-end 2020 COVID relief bill or the “CAA”)). Recognizing the overlapping requirements and the challenges of developing the necessary technical infrastructure, the Departments of Treasury, Labor, and Health and Human Services (the “Departments”) issued a set of FAQs providing some delayed effective dates. However, plan sponsors are encouraged to continue their good faith efforts in this area as some of the delays are not very long.

Less for Machines to Read

Under the TiC Rules, plans were to release three machine-readable files of health plan expenses for plan years beginning on or after January 1, 2022. The three files were:

  1. One showing in-network negotiated rates.
  2. A second showing out-of-network allowed amounts and historical payments.
  3. A third related to prescription drugs.

The Departments will defer enforcement of the TiC Final Rules requirement that plans publish machine readable files relating to prescription drug pricing pending until additional rules are issued. However, for the other two machine-readable files referenced, enforcement is delayed for only six months. In other words, plans with plan years beginning from January through June of 2022 will have to post the files on in-network and out-of-network information by July 1, 2022. 

More Self-Service Advance EOBs

The TiC Rules required health plans to offer a self-service tool that would allow enrollees to get an estimate of the cost of an item or service in advance. This had to be offered online and on paper. The TiC Rules essentially required plans to issue explanations of benefits on request before the medical item or service was provided, rather than only after it was provided. The TiC Rules recognized that this would be an estimate. It was set to apply to 500 services beginning with plan years on or after January 1, 2023. It expanded to all services for plan years on or after January 1, 2024.

The CAA essentially required the same thing as the TiC Rules, but also expanded this to include requests on the telephone. It also was effective January 1, 2022, much earlier than the TiC Rules.

There is substantial overlap between the two requirements. Additionally, there are many other requirements going into effect in 2022. Recognizing this, the Departments say they will not enforce the CAA requirement until plan years beginning on or after January 1, 2023. Notably, this appears to mean that all services (not just 500, as specified under the TiC Rules) must be available for the first plan year on or after January 1, 2023. Additionally, the Departments are going to look at whether any changes need to be made to the TiC Rules to cover the similar CAA requirement (beyond just adding a telephone option).

But Fewer Automatic Advance EOBs

In addition, the CAA required group health plans to issue an advanced EOB automatically if a good faith estimate of an item or service was submitted to the plan by a health care provider. (Note: Under the CAA, providers were required to submit the estimate, unless the enrollee said not to.) This too was effective for plan years on or after January 1, 2022.

The Departments have confirmed that the challenges of developing the technical infrastructure necessary for providers and facilities to transmit to plans, by January 1, 2022, is too difficult to get done in such a short amount of time. Therefore, the Departments will defer enforcement of the requirement until after a notice and comment period regarding appropriate data transfer standards.

And Less Prescription Drug Reporting

Under the CAA, plans must submit prescription drug cost and spending information and certain plan information to the Departments. The drug cost and spending information primarily focuses on the “Top 50” drugs by cost and cost increase. The plan information includes number of participants, premiums paid, and the employer/employee split in premiums. The first reporting was scheduled to go into effect on December 27, 2021 (the first anniversary of the CAA). After that, reporting would be required annually by June 1.

The FAQs recognize that plans may need additional time to modify contractual agreements to enable disclosure and transfer of the required data between various entities. The Departments will defer enforcement to report pending the release of regulations. However, the Departments strongly encourage plans to start working to ensure that they are in a position to be able to begin reporting the required information with respect to 2020 and 2021 data by December 27, 2022. 

Other Requirements Are on Schedule

Effective for plan years on or after January 1, 2022, the following provisions kick in:

  • Plans are required to include certain information on the health plan ID cards. This came from the CAA. The information includes deductibles, out-of-pocket maximums, and a telephone number and web address for consumer assistance (many cards already contain the phone number and website).
  • Plans are required to keep their provider directories up to date. If they do not, and an enrollee obtains service from an out-of-network provider due to a directory mistake, the plan must cover the cost a the in-network cost-sharing.
  • Plans are required to provide a notice on their public facing website and with each explanation of benefits advising enrollees of the surprise billing prohibitions under the CAA. The Departments have provided a model notice to assist with this requirement.
  • 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.

The FAQs confirm that the Departments will undertake notice and comment rulemaking at some point, but will not issue regulations on these requirements before the January 1, 2022 effective date. Accordingly, they encourage plans to make a good faith, reasonable interpretation of the statute. In other words, don’t expect guidance or delayed enforcement.

Not Your Grandfather’s Grandfathered Plan

The FAQs also confirm that the CAA rules apply to grandfathered plans. In other words, all the new rules listed above and a few others in the CAA apply to grandfathered plans. This was commonly understood based on the reading of the statute, but this confirmation is appreciated.

Takeaway

The FAQs provide some helpful flexibility on some of the requirements. However, on others, they confirm that employers and their service providers are going to be left to good faith compliance. Employers should work with their service providers to make sure the requirements are being properly implemented and on this revised schedule. To help with this, HUB has updated the chart of transparency requirements (available here) to reflect this new guidance.

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.