New health plan guidance regarding transparency regulations and last year’s budget act
Late last Friday afternoon, the Departments of Labor, Health and Human Services, and the Treasury issued some new frequently asked questions (FAQs) regarding implementation of the transparency in coverage (TIC) regulations and the Consolidated Appropriations Act of 2021 (CAA).
You might recall that the TIC regulations require group health plans to publish three machine-readable files for plan years beginning on or after January 1, 2022. The TIC regulations also require an online shopping tool in plan years beginning on or after January 1, 2023. Please see this blog article for a quick reminder of the TIC regulations: https://erisalinc.com/more-details-on-transparency-rules-that-apply-in-2022-and-beyond/.
You might also recall that the CAA imposes significant requirements on group health plans, including the No Surprises Act (NSA). The NSA applies for plan years beginning on or after January 1, 2022. Please see this blog article for a quick reminder of the CAA: https://erisalinc.com/last-weeks-government-funding-bill-significant-new-benefit-plan-rules/.
Last Friday’s FAQs provide important guidance regarding the TIC regulations and the CAA. Here is a quick summary of some of the major points:
- Enforcement of Machine-Readable File Requirements. The government intends to enforce the requirement that plans publish the three machine-readable files for plan years beginning on or after January 1, 2022 – subject to two exceptions:
- No enforcement of machine-readable file requirements related to prescription drugs. The third machine-readable file that must be disclosed under the TIC regulations requires disclosure of information related to prescription drugs. The FAQs indicate that the government recognizes the overlapping requirements (issued after the TIC regulations) contained in the CAA – and intends to evaluate whether the prescription drug machine-readable file requirement remains appropriate.
- July 1, 2022 delayed enforcement date for machine-readable file #1 and file #2. The TIC regulations require disclosure of machine-readable files for in-network rates and out-of-network allowed amounts and billed charges, for plan years beginning on or after January 1, 2022. The government is basically delaying enforcement of this rule until July 1, 2022. For plans that have a plan year in 2022 that begins after July 1, 2022, this is not helpful.
- Self-Service Price Comparison Requirements. The government recognizes that the TIC regulations require an online shopping tool for plan years beginning on or after January 1, 2023 – and the CAA also has similar-but-separate requirements. The government believes these requirements are duplicative except the CAA imposes an additional requirement that pricing information be available by telephone also, upon request. The government intends to propose rulemaking requiring the same pricing information that is available online and in paper form (under the TIC regulations) will also be required by telephone. Additionally, the government will not enforce the CAA price comparison requirements until the plan year beginning on or after January 1, 2023 – to align the compliance date of the TIC regulations with the compliance date of the CAA.
- ID Card Requirements Applicable to Plan Years On or After January 1, 2022. The CAA requires plans to include on any physical or electronic ID card issued to participants and beneficiaries any applicable deductibles, any applicable out-of-pocket maximums, and a telephone number and a website address for individuals to seek consumer assistance. These requirements apply for plan years on or after January 1, 2022. The FAQs provide:
- No regulations coming. The government does not intend to issue regulations addressing the ID card requirements prior to the effective date.
- Good faith is the standard. Until such guidance is ultimately issued, the government expects a good-faith, reasonable interpretation of the law. This means:
- The information on ID cards must be reasonably designed and implemented to provide the required information to all participants, beneficiaries, and enrollees.
- The government will consider each of the specific data elements included on relevant ID cards; whether any data element required, but not included on the face of an ID card, is made available through information that is provided on the ID card, as well as the mode by which any information absent from the card is made available; and the date by which a plan makes required information available on ID cards. As an example, the government would deem a plan to be in good-faith compliance where the plan includes on any physical or electronic ID card the following:
- the applicable major medical deductibles and out-of-pocket maximum;
- telephone number;
- website address for individuals to seek consumer assistance and access additional applicable deductibles and maximum out-of-pocket limits (additional limits could also be provided on a website accessed through a Quick Response code on the ID card or through a hyperlink in the case of a digital ID card).
- Advanced EOBs Effective Date Delayed. The CAA requires an advanced EOB in certain circumstances for plan years on or after January 1, 2022.
- No regulations coming. The government does not intend to issue regulations addressed the advanced EOB requirement prior to the effective date.
- But no enforcement. Because the government understands the complexity involved in the advanced EOB and related requirements, the government will not enforce this rule – so plans do not need to provide an advanced EOB for plan years beginning on or after January 1, 2022.
- No Gag Clauses. As to the CAA requirements that generally prohibit plans from entering into an agreement that restricts the plan from disclosing cost and quality of care information, which were effective December 27, 2020, the government does not intend to issue regulations anytime soon – but does expect compliance.
- Provider Directory Requirements. The CAA requires plans to establish a process to update and verify the accuracy of provider directory information, among other things. These provisions apply for plan years beginning on or after January 1, 2022. The government does not intend to issue regulations on these requirements any time soon. Plans are expected to implement these provisions using a good faith, reasonable interpretation of the requirements, but this appears to require plans to financially stand behind any incorrect information given to plan participants.
- Deferred Disclosure Deadline for Pharmacy and Other Information. The CAA requires plans to report certain prescription drug expense and other information to the government (e.g., 50 most frequently dispensed drugs; total number of paid claims for each drug; etc.) by December 27, 2021 – and then annually by June 1 (beginning June 1, 2022). The government is not going to enforce the first deadline of December 27, 2021 or the second of June 1, 2022. The government encourages plans to be working towards compliance by December 27, 2022 (for 2020 and 2021 data).