Recently, the Departments of Treasury, Labor, and Health and Human Services (the Departments) released FAQs on the Transparency in Coverage (TIC) Final Rules public disclosure requirement, which requires group health plans and carriers to post in- and out-of-network pricing information to a public website. As a reminder, the deadline to comply with the TIC public disclosure requirements is July 1, 2022.
TIC Public Disclosure Posting Requirement
The TIC Final Rules require non-grandfathered group health plans (including fully insured, level funded, and self-insured plans) and health insurance issuers to post certain pricing information on three “machine-readable” files to a public website. The disclosure requirement does not apply to grandfathered group health plans, excepted benefits (e.g., stand-alone dental and vision plans), health reimbursement arrangements (HRAs), other account-based plans (e.g., health FSAs, individual coverage HRAs), or short-term limited duration insurance.
The “machine readable files” have specific formatting and content requirements and must include information on:
- In-network provider negotiated rates for covered items and services;
- Historical out-of-network allowed amounts and associated billed charges for covered items and services; and
- Negotiated prices and historical net prices for covered prescription drugs.
The machine-readable files must be updated monthly and clearly indicate the last time they were updated.
The TIC public disclosure requirements are applicable for plan years that begin on or after January 1, 2022. However, the Departments previously announced delayed enforcement of the the in- and out-of-network machine readable files to July 1, 2022. The Departments also delayed enforcement of the prescription drug machine readable file requirement while they consider whether this requirement remains appropriate.
Please note that the TIC Final Rules also require plans to provide certain disclosures to plan participants, which has a phased-in effective date beginning January 1, 2023. For more on the plan participant disclosure requirement, see our prior blog, Steps Employers Can Take to Prepare for the New “Transparency in Coverage” Rules.
Public Posting Requirement
Machine-readable files must be posted on a public website. The files must be publicly available and accessible to any person, free of charge and without conditions, such as the establishment of a user account, password, or other credentials, or submission of personally identifiable information to access the file, such as name, email address, or telephone number.
Plans and issuers should determine where to post the machine-readable files based on their determination of where the files will be most easily accessible by intended users; the Departments do not prescribe a specific location where the information must be disclosed.
Fully Insured Group Health Plans
Employers that sponsor fully insured group health plans can satisfy the posting requirement by entering into a written agreement with their carrier to provide and post the required information. Accordingly, if an employer and carrier enter into such an agreement and the carrier fails to post the files as required, then the carrier, not the plan, will be held liable. Many insurance carriers are now working to comply with the TIC public disclosure requirements.
Self-Insured and Level Funded Group Health Plans
Employers with self-insured or level funded plans can contract with their third-party administrator (TPA) to provide the required disclosures; however, unlike fully insured plans, employers that sponsor self-insured or level funded plans will be held liable for any failure to comply, even if the employer enters into an agreement with their TPA. Employers can, however, enter into a contractual agreement whereby their TPA agrees to indemnify the employer in the event they fail to provide the disclosures, as required.
Further, while the machine-readable files can be hosted on a 3rd party website (i.e., TPA website), it is currently unclear whether the employer must also provide a link on their own public website to the location where the file is publicly available. As such, the cautious approach (absent further guidance) would be for these employers to also post a link to such files on their public website.
Employer Action Items
Fully Insured Plans
- Employers with fully insured plans who contract with their carrier to provide the public disclosures will not be held liable for any failure to meet the requirements. Therefore, employers may want to ensure their carrier contracts include provisions that make the carrier (not the employer) responsible for providing the disclosures. If no such provision is included, employers may want to enter into a separate written agreement with their carrier (without a written agreement, employers can still be liable).
- Though many carriers are providing the required public disclosures, employers may want to reach out to their carrier to determine whether the machine-readable files will be posted and the location of the posting.
Self-Insured/Level Funded Plans
- Employers may want to enter into a written contract that requires their TPA to provide the public disclosures and, if their TPA fails to comply, would also indemnify the employer.
- Employers may want to monitor/reach out to their TPA to ensure they will post the machine-readable files by the July 1, 2022 compliance deadline and that they will update the files monthly. Employers may also want to determine where the files will be posted (employers with self-insured/level funded plans will be held liable for failures to meet the requirements, even if a written agreement is entered into with their TPA).
- If the machine-readable files are posted on a 3rd party website, employers may also want to provide a link on their own public website to the location where the file is made publicly available.
Employers should speak to benefits counsel if they have questions about any of the above requirements.
- TIC Public Disclosure FAQs (April 19, 2022)
- FAQs on Deferred Enforcement (August 20, 2021)
- Final Rule on Transparency in Coverage (November 11, 2020)
- Sequoia Forewords
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