Agencies Propose Sweeping Transparency in Coverage Requirements for Health Plans and Insurers

The IRS, DOL, and HHS have jointly proposed regulations that would require most self-insured and insured group health plans, and insurers, to make extensive price and cost-sharing disclosures to participants, beneficiaries, enrollees, and, in some cases, the public. The proposals follow an Executive Order, issued last June, intended to improve transparency in health care, as required by the Affordable Care Act (see our Checkpoint article). The proposals would be generally effective one year after finalized (with a good faith safe harbor). Here are highlights:

• Required Disclosures to Participants, Beneficiaries, and Enrollees. Plans and insurers would be required to disclose the following personalized cost-sharing information to participants, beneficiaries, and enrollees, upon request, through an Internet-based self-service tool and in paper form:

  • Estimated Cost-Sharing Liability. The amount the individual is responsible for paying for a covered item or service under the terms of the plan (including deductibles, coinsurance, and copayments).
  • Accumulated Amounts. The amount of financial responsibility that an individual has incurred at the time the request for cost-sharing information is made (e.g., as a deductible or an out-of-pocket limit).
  • Negotiated Rate. The amount a plan, insurer, or TPA has contractually agreed to pay an in-network provider for a covered item or service.
  • Out-of-Network Allowed Amount. The maximum amount that would be paid for an item or service furnished by an out-of-network provider.
  • Items and Services Content List. A list of the covered items and services when an item or service is subject to a bundled payment arrangement.
  • Notice of Prerequisites to Coverage. A notice informing the individual that a specific covered item or service may be subject to a prerequisite (such as medical management techniques).
  • Disclosure notice. A notice about balance billing, with disclaimers about differences in actual and estimated charges.
• Required Public Disclosures. The proposals would also require plans and insurers to make price transparency disclosures to the public, primarily about negotiated rates with in-network providers and historical out-of-network allowed amounts. The information would have to be provided in machine-readable files and updated on a monthly basis.
• Insurer May Make Disclosures. Special rules would allow a plan to satisfy the disclosure requirements if the insurer offering the coverage provides the required information pursuant to a written agreement.
• Model Notices. According to the preamble to the proposed regulations, the agencies have developed model language that plans and insurers could use to satisfy the proposed notice requirements. The models are to be released separately; comments are requested.
• Exemptions. The proposed regulations would not apply to grandfathered plans, health reimbursement arrangements and health FSAs, excepted benefits, or short-term, limited-duration insurance. “Grandmothered plans” (see our Checkpoint article) would be subject to the rules.

EBIA Comment: At the same time these proposals were released, the agencies released finalized requirements for hospitals to disclose their standard charges, including negotiated rates with third-party payers. And there is more to come: Within 180 days of the June 2019 Executive Order, HHS has been directed to increase access to de-identified claims data from group health plans (as well as taxpayer-funded health care programs) for researchers, innovators, and others. For more information, see EBIA’s Health Care Reform manual at Section XXXVI.F (“’Transparency in Coverage’ Reporting and Cost-Sharing Disclosures”), EBIA’s Self-Insured Health Plans manual at Section XXIX.C.4 (“Health Care Reform Reporting Requirements: ‘Transparency in Coverage’ Reporting”), and EBIA’s Consumer-Driven Health Care manual at Section V.E (“Summary of Effects of Health Care Reform on Account-Based Plans”).

Contributing Editors: EBIA Staff.