Tuesday 06 September 2022
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FAQs regarding the implementation of transparency provisions under the Affordable Care Act and the No Surprises Act from the Departments of Labour, Health and Human Services and Treasury offer welcome relief to plan sponsors who are struggling to comply with transparency requirements that were in effect for some plans as of July 1, 2022, and for those facing additional obligations coming on January 1, 2023 and January 1, 2024.
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The final coverage transparency rules were released on November 12, 2020 and require non-grandfathered group health plans and health insurance issuers to disclose cost-sharing information in a standardized format that is updated monthly. . Departments have delayed the effective date of this requirement, so plans and plans for the calendar year beginning on or before July 1, 2022 had to post the data on their public websites no later than July 1. . Plans renewed on or after July 1, 2022 are required to publish this information upon renewal. The data must be provided in a machine-readable format (MRF) which is not easily used by the employer or its employees, causing many employers to question the value and necessity of adding this data, or a link to the data, to their website.
In addition, the No Surprises Act requires plan sponsors and insurers to develop and maintain an online price comparison tool to allow plan members to compare cost-share amounts for network provider items and services. As of January 1, 2023, plans must provide a tool that provides pricing data for the 500 most common medical items and services, then must include all covered items and services as of January 1, 2024.
Plan sponsors typically delegate plan administration tasks, such as claims processing, preparing ID cards, and provider network contracts, to their third-party administrators (TPAs) or insurance companies. Most were surprised to learn that transparency of coverage rules required additional written agreements, changes to service agreements, linking to their company website and, in some cases, creating a separate website to host a link to the APT website to fulfill transparency requirements.
The final rules grant sponsors of fully insured plans the ability to transfer responsibility for posting MRFs to their insurers if they have a written agreement where the insurer agrees to do so. If they contract with the insurer to post this information and the insurer fails to meet the posting requirement, the insurer, not the plan sponsor, is considered to have broken the rules. Sponsors of self-funded plans, on the other hand, have a higher level of compliance obligations.
Transparency rules require sponsors of self-funded plans to make these files publicly available, either by hosting the files on their own publicly accessible website or by contracting with their TPA to host the files and then posting a link to the files. files on the TPA website. Unlike fully insured plan sponsors, self-funded plan sponsors will be held liable for violating transparency rules if their TPA fails to meet disclosure requirements, even if they have a written agreement to do so. Penalties for violating this rule can be up to $100 per day (adjusted annually), per violation, per affected person, so sponsors of self-funded plans should monitor their TPAs to ensure compliance. compliance.
The bottom line for employers
Recent FAQs provide that if a plan enters into a written agreement with an insurance company or TPA to display the MRFs and Cost Comparison Tool on their website, the plan sponsor does not need to post a link to these files on their own company’s website. . The requirement to post a link to the MRFs and Cost Comparison Tool only applies if the group health plan maintains a public website for the plan, which is not common since most plans keep their information on an intranet site, not on a publicly accessible website. .
The guidelines also state that if a group health plan does not have its own public website, the plan is not required to create a website for the purpose of providing a link to a location where FRMs can be accessed at audience. This is good news for many diets who may have been told this was necessary.
Plan sponsors who have entered into a written agreement with their insurance company or TPA to maintain and display the MRFs and cost comparison tools required under the transparency rules, may remove any links to the files that are currently displayed on their company’s public website and do not need to add a link to their company’s public website in the future. Self-funded schemes that have established a public website to host this information or to provide a link to the MRFs may remove the site after entering into a written agreement with the TPA to provide this data. The written agreement with the insurer or TPA is essential to ensure compliance with transparency rules, so all plan sponsors should confirm it is in place before removing any links or data from their website .
Additionally, given the potential penalties that may be imposed for non-compliance with these rules, sponsors of self-funded plans should implement a process to ensure that their TPAs comply with the requirements of the transparency rules.
Sam Slade is Managing Director, Benefits, at The Hilb Group of New England, where he provides consulting and brokerage services to local employers. He has extensive experience in all aspects of employee benefits, including underwriting, plan design, communications, compliance and analytics, with a particular focus on alternative funding and self-insurance. Sam lives in South Kingstown with his wife and three sons.
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