Final Transparency in Coverage Rules Significantly Impact Group Health Plan Disclosures

In late October 2020, the Departments of Health and Human Services (“HHS”), Labor (“DOL”), and Treasury (“DOT”) jointly released final regulations requiring group health plans and insurers to make available healthcare pricing to participants, beneficiaries, and the public. The regulations were issued in an effort to improve price transparency, give consumers the information necessary to make informed healthcare decisions, and prevent surprise billing. The regulations build upon previous actions by the Departments to increase price transparency in hospitals. (For more information on the hospital price transparency rules, click here.)

The final regulations impose the following new disclosure requirements on non-grandfathered group health plans and insurers: 

1. Effective January 1, 2022, non-grandfathered group health plans and insurers must publish extensive price transparency disclosures to a publicly available, free website, updated monthly. Required disclosures include negotiated rates for covered items and services and historical payments to out-of-network providers.

2. Non-grandfathered group health plans and insurers must provide participants and beneficiaries certain cost-sharing information upon request. Effective January 1, 2023, disclosures for an initial list of 500 items and services are required; all items and services must be disclosed for plan years beginning January 1, 2024. The information must be provided at no cost to the participant and is similar to what must be provided in an Explanation of Benefits (“EOB”) form, but the information must be provided before the services are rendered. The following information must be included in the disclosures: 

1. • Estimated cost-sharing: The amount the individual must pay for a covered item or service under the plan’s terms (including deductibles, copayments, and coinsurance). 

1. • Accumulated amounts: The amount of financial responsibility the individual has incurred at the time of the disclosure request. 

1. • Negotiated rates: The maximum amount the plan contractually agreed to pay an in-network provider for a covered item or service. 

1. • Out-of-network allowed amounts: The maximum amount that would be paid for an item or service furnished by an out-of-network provider.

1. • Items and services: A list of the covered items and services that are subject to bundled payment arrangements. 

1. • Coverage prerequisites: Information regarding the prerequisites, as applicable, required for a specific item or service. 

1. • Disclosure notice: Information about balance billing and disclaimers about differences in actual and estimated charges. 

Insured plans may generally satisfy the disclosure requirements through a written agreement with the plan’s insurer, but the group health plan remains ultimately responsible for the disclosures. While the price transparency rule does not go into effect until January 1, 2022, group health plans should begin considering how the disclosures will be made. Administrative services agreements may need to be re-negotiated to include the preparation and distribution of these disclosures.