Effective for plan years beginning on or after Jan. 1, 2023, group health plans and health insurance issuers must make an internet-based price comparison tool available to participants, beneficiaries and enrollees. This requirement comes from final rules regarding transparency in coverage (TiC Final Rules) that were issued by the Departments of Labor, Health and Human Services and the Treasury (Departments) in November 2020.
According to the Departments, this tool will provide consumers with real-time estimates of their cost-sharing liability from different providers for covered items and services, including prescription drugs, so they can shop and compare prices before receiving care.
The TiC Final Rules require health plans and issuers to provide this information in paper form upon request. In addition, plans and issuers should be prepared to provide this comparison information over the telephone to comply with a transparency requirement added by the Consolidated Appropriations Act, 2021 (CAA).
Most employers will rely on their health insurance issuers or third-party administrators (TPAs) to develop and maintain the price comparison tool and provide related disclosures in paper or over the phone upon request.
Employers with fully insured health plans should confirm that their health insurance issuer will comply with the price comparison tool requirements, beginning with 2023 plan years, and ensure this compliance responsibility is reflected in a written agreement. Similarly, employers with self-insured plans should reach out to their TPAs (or other service providers) to confirm they will be in compliance by the deadline and update agreements, as necessary, to reflect this responsibility.
The TiC Final Rules’ requirement to provide a price comparison tool applies to group health plans (including self-insured and level-funded plans) and health insurance issuers. However, the requirement does NOT apply to:
TheTiC Final Rules require group health plans and health insurance issuers in the individual and group markets to make an internet-based self-service tool available to participants, beneficiaries and enrollees to disclose personalized price and cost-sharing liability for all covered health care items and services, including prescription drugs. This tool must be available without a subscription or other fee. Also, upon request, group health plans and issuers must make this information available in paper form.
The self-service price comparison tool must be available by the following phased-in deadlines:
Accordingly, group health plans with a calendar year plan (Jan. 1-Dec. 31) must make a price comparison tool available beginning Jan. 1, 2023, for the 500 shoppable items and services identified in the TiC Final Rules.
Group health plans, including self-insured plans and level-funded plans, and health insurance issuers of individual and group coverage are subject to the price comparison tool requirement. However, grandfathered health plans, excepted benefits (for example, limited-scope dental and vision benefits) and short-term, limited-duration insurance (STLDI) are NOT required to provide the price comparison tool. In addition, account-based group health plans, such as HRAs and health FSAs, and HSAs are not subject to the price comparison tool requirement.
The TiC Final Rules include the following special provisions for group health plans to avoid unnecessary duplication:
According to the Departments, the price comparison tool will enable individuals to obtain real-time, accurate estimates of their potential cost-sharing liability for covered items and services they might receive from different providers. Having access to this information will allow them to understand and compare health care costs before receiving care.
The price comparison tool must allow users to search for cost-sharing information for a covered item or service by entering certain information: a billing code or descriptive term (for example, “rapid flu test”); the in-network provider’s name if a user wants cost-sharing information for a specific in-network provider; and certain other relevant factors, such as the location of service, facility name or dosage. The price comparison tool must provide real-time responses based on cost-sharing information that is accurate at the time of the request. Responses must include the following information:
The TiC Final Rules do not make any changes to federal and state privacy laws that apply to group health plans and health insurance issuers, including the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Departments acknowledge that some of the content that must be disclosed under the TiC Final Rules may be “protected health information” subject to HIPAA’s privacy, security and breach notification rules. Health plans and issuers must continue to comply with HIPAA and other applicable state or federal privacy laws when disclosing information, including restrictions on who may have access to personalized cost-sharing information.
The CAA, which was signed into law on Dec. 27, 2020, includes a number of requirements for group health plans and health insurance issuers intended to increase transparency in health care and eliminate surprise medical bills. Similar to the TiC Final Rules, the CAA requires plans and issuers to make a “price comparison tool” available on the plan’s or issuer’s website. The CAA also requires plans and issuers to provide price comparison guidance by telephone, upon request, to individuals enrolled in coverage.
According to a series of FAQs from Aug. 20, 2021, the Departments intend to issue proposed rules addressing whether compliance with the TiC Final Rules’ price comparison tool satisfies the CAA’s price comparison requirements. The CAA adds a requirement not imposed under the TiC Final Rules: Price information must be provided over the telephone upon request. The Departments intend to propose that the same pricing information available through the online tool or in paper form must also be provided over the telephone upon request.
The CAA’s price comparison requirement is effective for plan years beginning on or after Jan. 1, 2022. However, in the FAQ guidance, the Departments recognize that the price comparison methods required by the CAA are largely duplicative of the price comparison tool required by the TiC Final Rules. The Departments also realize plans and issuers have been expecting to implement the first phase (500 items and services) for plan years beginning on or after Jan. 1, 2023. Accordingly, the Departments will not enforce the requirement that a plan or issuer makes available a price comparison tool (by internet website, in paper form or by telephone) for plan years beginning before Jan. 1, 2023.
This article is for educational purposes only. The tax and legal references attached herein are designed to provide accurate and authoritative information with regard to the subject matter covered and are provided with the understanding that LoVasco Consulting Group is not engaged in rendering tax or legal services. If tax or legal advice is required, you should consult your accountant or attorney. LoVasco Consulting Group does not replace those advisors.
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