Greater Price Transparency/Advanced Explanation of Benefits Requirements Coming Soon!

Passed in December 2020, the Consolidated Appropriations Act, 2021, (CAA) included provisions that address group health plan price transparency provisions, reporting, disclosure, and other patient protections. The price transparency rules are slated to become effective on January 1, 2022, so employers should be working with their carriers or TPAs on compliance efforts soon.

Advance EOB Requirements

The CAA requires that health plan participants receive an advance explanation of benefits (EOB) whenever they schedule a health care service at least three business days in advance. Participants are also able to request an advance EOB for a health care service whether or not the service has been scheduled. 

For services scheduled at least three business days in advance, providers must give the participant’s plan a good faith estimate of anticipated charges. For services scheduled at least 10 days in advance – or for requests made for a service not yet scheduled – providers are required to provide the estimate within three business days of scheduling. 

Once the estimate is provided, the group health plan must provide the participant with an advance EOB that includes the following:

  • Whether or not the provider or facility is “in-network” under the plan.
    • If the provider or facility is in-network, then the advance EOB must include the contracted rate(s) for the services.
    • If the provider or facility is out-of-network, then the advance EOB must provide information on how the participant can find an in-network provider or facility.
  • The good faith estimate as given by the provider or facility.
  • A good faith estimate of the amount the plan is responsible for paying for the items or services.
  • A good faith estimate of the amount of any cost sharing the individual will owe as of the date the advance EOB is being provided.
  • A good faith estimate of the amount the participant has already incurred toward the deductible or out-of-pocket maximum.
  • If the item or service is subject to medical management (like prior authorization, step therapy, etc.), then the advance EOB must state that coverage for the items or services is subject to such medical management technique.
  • A disclaimer that the advance EOB is only an estimate based on the expected items or services and may be subject to change.
  • Any other information or disclaimer that the plan determines is appropriate.

Because guidance from the federal enforcement agencies will be forthcoming on these requirements, employers and other group health plan sponsors should pay close attention to such guidance as well.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 678-439-6236.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.
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