QUESTION: What is “transparency in coverage” cost-sharing disclosure, and does it apply to our company’s group health plan?
ANSWER: “Transparency in coverage” refers to an Affordable Care Act provision that requires health plans and insurers to disclose certain cost-sharing information to participants, beneficiaries, enrollees, and, in some cases, the public. The requirements apply to most insured and self-insured group health plans, and to insurers, but grandfathered health plans, excepted benefits, and short-term limited-duration insurance are exempt. Health reimbursement arrangements and other account-based group health plans are generally exempt as well. But “grandmothered” health plans are required to comply. Special rules allow an insured plan to satisfy the requirements if the insurer offering the coverage provides the required information pursuant to a written agreement.
Plans and insurers must make personalized disclosures of specific cost-sharing information to participants, beneficiaries, and enrollees through an internet-based self-service tool and, upon request, in paper form (see our Checkpoint article). These disclosures are required for an initial list of 500 items and services for plan years that begin on or after January 1, 2023, with all items and services to be disclosed for plan years that begin on or after January 1, 2024. Here are highlights of what must be disclosed:
Estimated Cost-Sharing. The estimated amount the individual must pay for a covered item or service under the plan’s terms (including deductibles, coinsurance, and copayments).
Accumulated Amounts. The amount of financial responsibility that an individual has already incurred at the time the request for cost-sharing information is made (e.g., as a deductible or an out-of-pocket limit).
In-Network 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 for concurrent review, prior authorization, step-therapy, or fail-first protocols.
Disclosure Notice. A notice with several specific disclosures, including a statement about balance billing and disclaimers about differences in actual and estimated charges.
Plans and insurers also must provide public disclosure (updated monthly) of (1) applicable rates with in-network providers (including negotiated rates); (2) charges and allowed amounts a plan or insurer has historically paid for covered items or services furnished by out-of-network providers (including prescription drugs); and (3) negotiated rates and historical net prices for prescription drugs furnished by in-network providers. These disclosures are required for plan years beginning on or after January 1, 2022.
For more information, see EBIA’s Health Care Reform manual at Section XXXVII.D (“Transparency in Coverage Cost-Sharing Disclosures”). See also EBIA’s Self-Insured Health Plans manual at Section XXVIII (“Participant Disclosure Requirements for Self-Insured Health Plans”).
Contributing Editors: EBIA Staff.