On November 12, 2020, Congress and the Departments of Health and Human Services, Labor, and Treasury (the Departments) issued a final rule for Transparency in Coverage (TiC) aimed at group health plans with the purpose of encouraging transparency in health care costs. Then on December 27, 2020, the Consolidated Appropriations Act (CAA) of 2021 was signed into law and included the No Surprises Act (Act), which incorporates patient protections for surprise medical billing from providers, a subject that has been an ongoing topic of discussion for years. Although TiC and the Act are completely separate, they are commonly discussed in tandem due to the nature of requirements between health plans and providers.
While the new provisions are now law, the Act and TiC will require additional agency rulemaking and guidance. To address some of the initial questions, the Departments published a Fact Sheet on July 1, 2021 and interim final rules on July 13, 2021 titled “Requirements Related to Surprise Billing; Part 1” with a request for comments due September 7, 2021. Additionally, on August 20, 2021, the Department of Labor released frequently asked questions (FAQs) with clarification about the Act in their FAQs about Affordable Care Act and Consolidated Appropriations Act, 2021, Implementation Part 49.
Employers and plan sponsors should expect additional guidance and clarifications to be published in the next several months. In the meantime, there are plenty of questions that remain unclear, even for some of the more administrative aspects of operating employer plans. I’ve selected a few questions that we’ve received as information requests from International Foundation members to address in this blog.
What plans are required to comply with the No Surprises Act and Transparency in Coverage?
The Act applies to:
- employer-sponsored group health plans, including:
- self-funded plans;
- fully insured plans; and
- grandfathered plans.
The Act does not apply to:
- account-based plans like health reimbursement arrangements (HRAs) and flexible spending accounts (FSAs);
- excepted benefit plans issued as a separate plan from the health insurance like dental and vision, cancer and critical illness plans; and
- retiree-only plans.
TiC applies to most non-grandfathered plans and health insurers. It does not apply to:
- grandfathered plans;
- account-based plans like HRAs and FSAs;
- excepted benefit plans issued as a separate plan from the health insurance, like dental and vision, cancer and critical illness plans;
- short-term, limited-duration plans; and
- retiree-only plans.
What are the effective dates for complying with the No Surprises Act and Transparency in coverage?
Originally, the effective dates for most of the provisions of the Act and TiC were “the plan or policy year on or after January 1, 2022,” although a few of the effective dates were deferred to the years after 2022. Commenters who submitted statements on the guidance have suggested that January 1, 2022 did not allow enough time for compliance. The FAQs extended or delayed enforcement of many of the effective dates and noted that the Departments will apply a “reasonable, good faith compliance standard” when enforcing the effective dates.
After the release of the FAQs, Segal released its Timeline and Application of New Surprise Billing and Transparency Laws and Rules publication, including a chart of the regulations as of August 23, 2021 with the effective and applicability dates for the various provisions.
What if a plan sponsor or employer does not have a website for the requirement of publishing a price comparison tool for participants?
According to question 2 in the FAQs, the price comparison tool is required to be available by telephone and on the plan or issuer’s website “to the extent practicable.” At this time, it’s unclear what would happen if there were no website available to post the information.
Analysis of this provision by Vorys indicates that the price comparison tool included in both the Act and TiC requirements are considered “duplicative,” and the compliance date has been extended to “plan years beginning on or after January 1, 2023.”
What is the Advanced Explanation of Benefits, and how fast do they need to be processed?
The Advanced Explanation of Benefits (EOB) is meant to encourage participants to ensure their medical care will be provided by in-network providers in advance of treatment to assist with lowering health plan costs for both the plan and the individual participant. The process requires coordination between the plan administrator, the network(s) and providers to communicate with the participant.
The Advanced EOB must include:
- If the provider and facility are in-network
- If in-network, the contracted rate for the services scheduled
- If the provider or facility is out-of-network, the good faith estimate supplied to the plan sponsor
- The expected participant cost sharing amount
- The amount the participant has already accrued toward their annual deductible and annual out-of-pocket maximum as of that point in time
- Any requirements for the upcoming treatment, including prior authorizations
- A disclaimer that all information is estimated and subject to change.
Processing times. If the participant is insured, the provider or facility must provide a good-faith cost estimate, including billing and diagnostic codes, to the plan sponsor.
- If the participant makes an appointment at least three business days in advance, once the provider notifies the plan of the appointment, the plan sponsor must provide the participant with the advanced EOB no later than one business day after receiving the notification.
- If the participant makes an appointment at least ten business days in advance, once notified of the appointment, the plan sponsor must provide the participant with the advanced EOB no later than three business days after receiving the notification.
- Plan participants can also request from the plan or insurer an Advanced EOB for services before they have scheduled an appointment. After receipt, plan sponsors have three business days to fulfill the request.
The Advanced EOB enforcement process has been deferred until further regulations are published.
Additional guidance is expected to be released by the end of 2021. The International Foundation will be watching for this information and will bring it to our members in our Today’s Headlines emails and additional blogs as necessary. Plan sponsors and employers should be reviewing their responsibilities with their advisors as they may need to commit substantial effort towards compliance.
- CAA and other transparency measurers: Timing and implication of surprise billing for plan sponsors, Milliman, April 27, 2021
- Departments issue FAQs regarding implementation timing of group health plan reforms, Nixon Peabody, August 25, 2021
Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.
Anne Newhouse, CEBS
Information/Research Specialist at the International Foundation of Employee Benefit Plans
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