Health Care Cost Transparency Reporting for Group Health Plans

Employee Benefits

Health Care Cost Transparency Reporting for Group Health Plans

Interim Final Rules addressing medical and prescription drug pricing transparency, as required under the No Surprises Act (part of the 2021 Consolidated Appropriations Act), were jointly issued by the Treasury and the Labor and Health and Human Services Department on November 17, 2021. The interim final rules were published in The Federal Register on November 23, 2021 and are generally effective December 27, 2021. However, the joint rules delay reporting requirements for health plans applicable to 2020 and 2021 calendar years for an additional year until December 27, 2022. For reference, please review our prior article.

The rules also clarify specific details on required reporting elements for group health plans and health insurance issuers offering individual or group health coverage and carriers providing coverage to the Federal Employee Health Benefits (FEHB) program. Under the transparency rules, plans subject to the rules must report cost information for specific categories of health care expenditures on an annual basis. Health reimbursement arrangements and other account-based group health plans, short-term limited-duration insurance and excepted benefits are excluded from the reporting requirements.

Reporting in General

At this time, there are no specific details on how the reporting is to be submitted. The regulations state: “The report must be submitted in the form and manner prescribed by the Secretary, jointly with the Secretary of the Treasury and the Secretary of Health and Human Services.” Further guidance is anticipated.

The interim final rules clarify that if the plan is fully insured and the plan and issuer agree in writing that the issuer will comply with the reporting requirements, the issuer, and not the plan, is responsible for any reporting failures. On the other hand, while the sponsor of a self-insured plan may contract with a third party (including carriers, TPAs, pharmacy benefit managers or other third parties) to perform the reporting requirements, the plan is responsible for any reporting violation by the third party.

The reporting rules require plans to provide general information on plan coverage, including plan year beginning and ending dates, the number of participants and beneficiaries or enrollees, and each state in which the plan or coverage is offered. Other than these specific characteristics, plans and issuers or other entities reporting on their behalf (issuers, TPAs or other service providers) should submit most of the required information on an aggregate basis by state and market segment, rather than at the plan level.

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