The Departments of Labor, Health and Human Services, and the Treasury (collectively the “Departments”) explain updated details via FAQs Part 61 regarding enforcement of transparency in coverage (TIC) regulations and similar transparency requirements in the Consolidated Appropriations Act, 2021 (CAA).

Compliance Snapshot:

  • Enforcement for the TIC public disclosures of pharmacy pricing machine readable file requirement – deferred since August 20, 2021 – will now be administered on a case-by-case enforcement approach; and
  • Departments will not continue a categorical “enforcement safe harbor” described in FAQs Part 53 regarding the TIC in-network machine readable file requirement, and instead will exercise enforcement discretion also on a case-by-case basis.


The TIC final rule requires non-grandfathered group health plans to disclose detailed pricing information to the public through an internet-based self-service tool and in paper form, upon request (among other requirements). More specifically, plans must include specific content on 3 separate machine readable files on a public website with information on (1) in-network rates for covered items and services, (2) out-of-network rates for covered items and services, and (3) negotiated rates and historical pricing for covered prescription drugs. Our prior blog elaborates on these requirements, Deadline to Post Transparency in Coverage Machine Readable Files is July 1, 2022.

The Departments announced delayed enforcement on August 20, 2021, for the TIC provision regarding the pharmacy drug machine readable file requirement, communicating that they will not enforce the requirement for plans to post machine readable files on prescription drugs pending further rulemaking. The Departments acknowledged that after the final rules on TIC were released, Congress passed the CAA, which requires plans to report similar pharmacy drug information (see our blog Prescription Drug Cost Reporting: Employer Guidance for more details), and deferred enforcement to review potentially duplicative and overlapping reporting requirements for prescription drugs.

In addition, FAQs Part 53 announced “an enforcement safe harbor for satisfying the reporting requirements for plans and issuers” that are unable to comply with the TIC in-network rates machine readable file requirement for specific reasons, intending to apply when compliance was not possible due to “alternative reimbursement arrangements that do not permit the plans and issuers to derive with accuracy specific dollar amounts contracted for covered items and services in advance of the provision of that item or service” or when the plan “otherwise cannot disclose specific dollar amounts” according to the Departments’ guidance.

FAQs Part 61: New Guidance

As explained via FAQs Part 61, the Departments have now considered whether the TIC pharmacy machine readable file requirement remains appropriate given that the CAA reporting requirements have been implemented for calendar years 2020 – 2022 and as such, have begun collecting CAA required information. The Departments state in Q1 of FAQs Part 61 that it is now clear that there is “no meaningful conflict between the reporting requirements” of the CAA and the TIC final rule, explaining that the CAA requires disclosure of different and additional information than the TIC final rule. As such, the prior enforcement discretion is withdrawn and the Departments state that a case-by-case enforcement approach is appropriate and additional technical requirements and implementation timeline guidance is anticipated.

Additionally, Q2 of FAQs Part 61 explains that the Departments will no longer continue to maintain an “enforcement safe harbor” for the TIC in-network rates machine readable file requirement and as such, they are rescinding the statement of enforcement discretion provided in FAQs Part 53. Stating that the intent was not to provide a categorical exception to enforcement of the TIC in-network machine readable file requirement, the Departments now clarify that “whether a plan or issuer is able to comply with the requirements to disclose certain rates as dollar amounts is a fact-specific determination; therefore, the Departments intend to exercise enforcement discretion with respect to this requirement on a case-by-case basis, without any categorical “safe harbor.” Plans that are unable to determine dollar amounts for the in-network rates should follow the Department’s technical reporting guidance. Importantly, the Departments note that they are unlikely to pursue enforcement when a plan can demonstrate the compliance with relevant TIC final rules would have been extremely difficult as described in FAQs Part 53.

Employer Impact

Given the FAQs Part 61 guidance, the deferred enforcement and safe harbor described above now no longer apply and employers should be aware of the updated guidance. As such, employers now must ensure compliance with machine readable file requirements for prescription drug costs as done for the in-network and out-of-network rates. In addition, those relying on the prior “safe harbor” for in-network rates where determining dollar amounts for the in-network rates was a challenge must now report applicable rates if able (or rely on the case-by-case enforcement and demonstrate the extremely difficult circumstances following the Department’s technical guidance).

Practically speaking, employers should discuss these requirements with their carriers, TPAs, or pharmacy benefit managers (PBMs) to ensure compliance and should also review (and update, as needed) any written contract in place requiring the carrier, TPA, or PBM to post the required machine readable files on an employer plan-sponsor’s behalf so that it encompasses the prescription drug file. We will continue to monitor and communicate the anticipated implementation guidance, once available.

Additional Resources

Disclaimer: The information provided is for informational purposes only and is not intended to constitute legal or tax advice. The information provided may not reflect the most current legal developments and may vary by jurisdiction. The content is for general informational purposes only and does not apply to any particular facts or circumstances. This communication does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents herein do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in the proper jurisdiction. The contributing authors of this content expressly disclaim all liability to any persons or entities with respect to any action or inaction taken based on the contents of this communication. © 2023 Sequoia Consulting Group. All Rights Reserved.  

Diane Cross — Diane is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Diane enjoys spending time with her family, live music, and cycling.