Health Plan Transparency Requirements: Public Disclosures Required Soon

Employee Benefits

Health Plan Transparency Requirements: Public Disclosures Required Soon

In October of 2020, the DOL, IRS and CMS issued final regulations (referred to in this article as the “Health Plan Transparency Regulations” or the “Regulations”) implementing two significant health plan pricing transparency initiatives. After a delay in the effective dates of the regulations, one requirement (the requirement to make certain information available to the public) will be effective for most plans in the near future. This article provides a refresher on the requirements of the Regulations and highlights some recent developments related to compliance.

By what date must health plans comply with the new requirements?

According to FAQs issued by the regulatory agencies in August 2021, the portion of the regulations requiring group health plans and health insurance issuers to make certain pricing information available to the public becomes effective on the later of July 1, 2022, or the first day of the 2022 plan year. As a result, for plans with plan years beginning between January 1 and July 1, 2022, the information must be made available on or before July 1, 2022. For plans with plan years beginning after July 1, 2022, but before January 1, 2023, the information must be made available by the first day of the 2022 plan year.

Who must comply with the Regulations?

The Regulations apply to both group health plans (including employer-sponsored plans, multi-employer (Taft-Hartley) plans and MEWAs) and health insurance issuers providing coverage in the group and individual insurance markets. While the term “group health plan” is a very broad term, it is generally limited to medical plans for purposes of the Regulations. The Regulations indicate that group health plans that are HIPAA excepted benefits (e.g., most dental and vision plans, on-site medical clinics, etc.) and account-based health plans (e.g., health FSAs, HRAs, ICHRAs, etc.) are not subject to the requirements. Furthermore, the Regulations do not apply to grandfathered health plans (i.e., plans that have not made changes to plan design or premium sharing since March 23, 2010, in excess of permitted amounts as described in the Final Rules for Grandfathered Plans, which were published in the Federal Register on November 18, 2015).

What information must be made available to the public under the Regulations as of the effective date?

The Regulations require plans and issuers to disclose certain pricing information to the public. This information must be made available in two separate machine-readable files. The data files must be displayed in a standardized format specified in the Regulations. Plans and issuers must provide updates to the files monthly.

Each machine-readable file must include a specific set of data.

  • One file must include the rates negotiated between the plan/issuer and in-network providers for all covered items and services.
  •  Another file must include data showing the historical payments to and billed charges from out-of-network providers.
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