Transparency in Coverage Enforcement

On April 19, 2022, the U.S. Department of Labor (DOL), U.S. Department of Health and Human Services (HHS), and the U.S. Treasury issued joint guidance concerning the 2020 Transparency in Coverage Final Rules. The primary subject of this guidance, entitled FAQs About Affordable Care Act Implementation Part 53, involves the provision of a safe harbor for health plans to disclose in-network health costs, that do not equate to a dollar amount. This guidance reminds affected entities of the upcoming enforcement date for the Final Rules, or July 1, 2022. 

The Final Rules and Disclosure of Costs

The Final Rules require all non-exempt health plans and health insurance issuers to post information about the costs of in-network and out-of-network healthcare costs in dollar amounts. In addition, these entities must post the information in machine-readable files on a public website to be available for participants, beneficiaries, and enrollees. These Rules apply to all plan years beginning after January 1, 2022. 

After the publication of the Final Rules, questions arose about posting dollar values for some alternative reimbursement arrangements that exist for in-network costs. Under those arrangements, reimbursements occur based on a percentage of billed charges, making it impossible to predetermine and disclose dollar amounts for the services as the Final Rules require. 

Establishment of a Safe Harbor for Alternative Reimbursement Arrangements 

The new FAQs address this concern and provide a safe harbor for health plans regarding this issue. More specifically, the FAQs provide that insurers may publicly post a percentage number rather than a dollar amount when insurers use an alternative percentage billing method. 

Suppose the insurer needs to submit additional information to describe the contractual arrangement in terms of the negotiated rate. In that case, it can provide the necessary information in an open text field. However, this submission is only permissible if disclosure is impossible via machine-readable files due to the current technical specifications.

Guidance on Public Websites

The FAQs also give some limited guidance on the technical requirements for the public websites on which health plans must disclose health care costs. Most importantly, the website must be publicly accessible, meaning that plans cannot charge users a fee to access the information. In addition, plans cannot require users to create user accounts, passwords, or other credentials or supply any identifying information to access the information. Finally, if plans choose to utilize a third-party website to host the files, they must include a link to the location of the files on their own public websites. Therefore, it is insufficient for plans to simply post the files on their plan websites or a plan sponsor’s company intranet since those postings would not be publicly accessible as required. 

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 470-571-1007.

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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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