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No Surprises Act Requires Employers to Act

What: The Consolidated Appropriations Act, 2021, requires group health plans to furnish, upon request, a disclosure referred to as an “advanced explanation of benefits” (EOB) whereby providing specified information about items or services scheduled to be received by a plan participant or beneficiary. This requirement aims to prevent individuals from receiving surprise billing.

When: January 1, 2022

How: Upon receipt of the request, the advanced EOB must be provided within one business day for scheduled procedures and three business days if the request is made at least 10 business days before the scheduled procedure.

The advanced EOB must be provided in clear and understandable language and include the following information:

  • Whether or not the provider or facility is in-network. If so, it must provide the contracted rate. If the provider or facility is nonparticipating, the advanced EOB must also provide a description of how the individual may obtain information on participating providers and facilities, if any.

  • A good faith estimate of the cost of the services to be provided that must include:

    • The total cost for the services;

    • The amount the plan is responsible for paying for the items and services;

    • The amount of any cost-sharing; and

    • The amount that the individual has incurred toward meeting the limit with respect to deductibles and out-of-pocket maximums (as of the date of the advanced EOB).

  • A disclaimer that coverage is subject to medical management techniques.

  • A disclaimer that the information provided in the advanced EOB is only an estimate based on the items and services reasonably expected, at the time of scheduling (or requesting), to be furnished and is subject to change.

To Do: While insurers and TPAs must satisfy this requirement, there are few tasks plan sponsors should tackle in the near future such as:

  • Amend Summary Plan Descriptions to include a description of the right to request an advanced EOB and the steps needed to do so;

  • Ask insurers/TPAs what steps they are taking to get ready for advanced EOB requirements; and

  • Review service provider agreements and revise as necessary to include responsibility for providing advanced EOBs (and responsibility for any penalties and/or costs that may be associated with missing deadlines or providing egregiously incorrect information).

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