On February 2, 2024, the Departments of Labor, Health and Human Services, and the Treasury (collectively the “Departments”) issued FAQ Part 65, clarifying how to comply with transparency in coverage (TIC) cost-sharing disclosure requirements regarding items and services with extremely low utilization when cost estimates are based on claims data.


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.

In addition, plans must provide participants and beneficiaries with out-of-pocket cost estimates via a user-friendly online self-service tool (and by paper upon request). Implemented in two phases, the first phase of the price comparison tool required the first 500 items and services (as defined by the DOL) to be published in the tool effective for plan years beginning on or after January 1, 2023, and the second phase requires all other services covered by the plan to be included in the tool effective for plan years beginning on or after January 1, 2024.

For additional information on these requirements, see our prior blogs: Updated Enforcement Guidance for Transparency in Coverage Machine Readable Files and Transparency in Coverage Price Comparison Tool Requirements Expanded For 2024.

FAQ Part 65: New Guidance

The Departments recognize that in certain circumstances, plans may not be able to provide accurate cost-sharing estimates as required by the TIC final rules (described above) for items and services with extremely low utilization rates (e.g., where rates are not negotiated on prospective dollar rates and instead based only on past claims data). To that end, FAQ Part 65 clarifies that for such items and services, the plan or carrier should indicate on the self-service tool that the item or service is covered, but that a specific cost estimate is not available due to insufficient data. Per the FAQ, “the self-service tool should encourage the participant, beneficiary, or enrollee to contact the plan or issuer for more information on the item’s or service’s cost-sharing requirements. In cases where the participant, beneficiary, or enrollee contacts a plan or issuer to request such information, the Departments encourage the plan or issuer to provide any available relevant benefits information, such as information available on the Summary of Benefits and Coverage or the portion of the cost of the item or service for which the participant, beneficiary, or enrollee will be responsible.”

In addition, the Departments explain that they are likely to exercise their discretion on a case-by-case basis, and not enforce action against plans and carriers who fail to include cost-sharing information for items and services which would need to be based on past claims data where there have been less than 20 different claims over the past three years.

Employer Impact

Employers should be aware of these updates impacting overall compliance with TIC final rules. Practically speaking, there is little employer action regarding this guidance as carriers, TPAs and pharmacy benefit managers (PBMs) are generally complying on behalf of employer plan-sponsors. That said, employers should discuss these requirements with their carriers, TPAs, or PBMs to ensure compliance.

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. © 2024 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.