FAQs (Part 56) Announce Delay, Good Faith Enforcement Relief for Prescription Drug and Health Care Spending Reports

The DOL, HHS, and IRS have jointly issued FAQs (Part 56) with enforcement relief and a delay for reporting data under a transparency provision included in the Consolidated Appropriations Act, 2021 (CAA, 2021), which requires group health plans and insurers to annually report prescription drug and health care spending, premiums, and enrollment information to the government (see our Checkpoint article). In November 2021, the agencies issued interim final regulations describing the content and timing requirements for the reports (see our Checkpoint article). Among other things, the regulations provide that plans and insurers must submit information based on the “reference year,” which is defined as the calendar year immediately preceding the calendar year in which the data submission is due. According to the CAA, 2021, calendar year 2020 information is required to be submitted by December 27, 2021; calendar year 2021 information by June 1, 2022; calendar year 2022 information by June 1, 2023; and so on. However, the agencies advised in the regulations that they would not initiate enforcement actions against plans or insurers that submitted the required data for the 2020 and 2021 reference years by December 27, 2022. HHS also released supporting documents for the regulations, including data submission instructions for plans and insurers for the 2020 reference year. In addition to reviewing who must report and when, the instructions explain how the data is to be submitted through the RxDC module in the Health Insurance Oversight System (HIOS) (see our Checkpoint article).

The agencies have now announced that for the 2020 and 2021 data submissions that were due by December 27, 2022, they will not take enforcement action with respect to any plan or insurer that uses a good faith, reasonable interpretation of the regulations and the RxDC reporting instructions. The agencies also provide a submission grace period through January 31, 2023, and will not consider a plan or insurer to be out of compliance provided that a good faith submission of 2020 and 2021 data is made on or before that date. Several clarifications and reporting flexibilities are also provided, including rules allowing multiple submissions by a reporting entity and reporting by multiple entities on behalf of the same plan or insurer. The guidance also permits emailed submissions (rather than through HIOS) in limited circumstances and makes optional the reporting of certain amounts not applied to the deductible or out-of-pocket maximum.

EBIA Comment: While this is welcome relief, the agencies advise that they expect plans and insurers to continue to work in good faith toward full compliance with the reporting requirements. The next report (with 2022 data) is due by June 1, 2023. For more information, see EBIA’s Health Care Reform manual at Section XXXVI.L (“Prescription Drug and Health Care Spending Reporting”). See also EBIA’s Self-Insured Health Plans manual at Section XXIX.D.4 (“Prescription Drug and Health Care Spending”) and EBIA’s ERISA Compliance manual at Section XXI.C (“Caution Regarding Additional Obligations”).

Contributing Editors: EBIA Staff.