On October 29, 2020, the IRS, DOL and HHS jointly issued the “Transparency in Coverage” final rule. First proposed in November 2019 as per Executive Order 13877, the final rule imposes new cost-sharing and pricing disclosure requirements upon group health plans and health insurers. Generally, these rules apply to fully-insured and self-insured group health plans and are phased in:
For plan years starting on or after Jan 1, 2022, plans and insurers must make extensive price transparency disclosures to the public in machine-readable files that are updated monthly. The disclosures must show negotiated rates for covered items and services between the plan or insurer and in-network providers, as well as historical payments to, and billed charges from, out-of-network providers.
For plan years starting on or after Jan 1, 2023, disclosures are required for an initial list of 500 items and services, and all items have to be disclosed by Jan 1, 2024. Plans and insurers must make advance disclosures of the specified cost-sharing information to participants through an internet-based self-service tool, and upon request, in paper form.
A good faith special applicability provision (safe harbor) is included in the rule which provides some protection from errors, but issues must still be corrected as soon as practicable.
For fully-insured plans, the employer can have the carrier provide this information with a written agreement. For self-insured plans, the employer plan sponsor is ultimately responsible for the disclosures, but the TPA or another claims payment provider may be able to assist with publishing this information on behalf of the plan.
Thus, employers should prepare now for these coming obligations and discuss with the carrier or TPA on how this information will be properly disclosed.