The Transparency in Coverage Rule creates several requirements for issuers and non-grandfathered group health plans, including employer-sponsored plans. It is designed to help patients know how much their healthcare will cost in advance of treatment.
As your employee benefits partner, Ascela has put together this article to ensure our clients are prepared for July 1, 2022.
Transparency in Coverage Regulations Overview
Federal transparency law applies to all size employers, and to fully and self-insured medical plans. Plan sponsors have a responsibility to make it available to all their participants.
Plan obligations will be phased over a 3-year period. 3 years with 3 phases of Transparency rules.
Phase 1: Publicly Available Machine-Readable Files
Phase 2: Consumer Price Transparency Tool
Online shopping tool that will allow consumers to see the negotiated rate between their provider and their plan, as well as personalized estimate of their out-of-pockets costs for around 500 of the most shoppable items and services.
Phase 3: Shopping Tools will be required to show the costs for the remaining procedures, drugs, durable medical equipment's and any other item or service consumers may need.
These regulations do not apply to grandfathered plans, excepted benefits (standalone vision, dental and hearing plans), Medicare/Medicaid, FSA, HRAs and HSAs, retiree only plans, or short-term limited duration plans
Delayed effective date July 1, 2022 (for plan years beginning on or after 1/1/22). Rule is effective for plan years beginning on or after January 1, 2022, on July 1,2022.
Anyone who has a 1/1/22 thru 7/1/22 plan year, their eff date is 7/1/22.
Plan starts of 8/1/22, 9/1/22, 10/1/22, 11/1/22, 12/1/22 effective dates will be first day of their plan year in 2022.
Phase 1: Publicly Available Machine-Readable Files
The first component of the law that is required this year are Machine Readable Files.
Requirements:
Information must be PUBLICALLY available. Files must be updated monthly, and files must include billing codes used to identify items/services.
Files are required to include:
In-Network Rate File: All negotiated rates for every covered item and service for every In-Network provider. This is a lot of information and not always readily available through carriers and TPAs as of now, but must be included.
Allowed Amount File: Historical allowed amounts and billed charges for Out-of-Network providers
Prescription Drug File: Negotiated rates and historical net prices for all covered prescription drug plans (delayed pending rulemaking)
Information must be in a standardized machine readable format. PDF/Excel documents are NOT permitted.
Fully insured plans: rules provide that the plan will satisfy disclosure requirement if the plan requires the health insurance issuer to disclose information on their carrier’s site by agreement.
Fully insured sponsor does not have to have it link it back to their website as long as a written agreement is in place with carrier to post on their website.
Self-funded plans: plan sponsors MUST include link on its own website to the where the file is publicly available. Rely on carriers to do to provide this information.
Phase 1 Frequently Asked Questions
Q: Is there a certain place on the website that it must be shown (top/bottom etc)? Is there a specific format that must be adhered to? A: The Departments have not provided any specific guidance on either of these items. Our recommendation is that the link be publicly accessible; beyond that, location and formatting of the link are currently at the employer’s discretion.
Q: Are employer groups responsible for submitting documentation to the DOL or any government site? A: No, there are no self-reporting requirements associated with posting the machine-readable files.
Transparency in Coverage Rule Webinar Recording
Our partner, Savoy, has also released a Transparency in Coverage Rule webinar recording for our clients to reference. Click HERE to watch the previously recorded broadcast.
Additional Questions?
If you have any questions, please contact your Ascela Account Management Team.