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Transparency Rules Set to Take Effect

Employee Benefits

In late 2020, the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury issued final rules on Transparency in Coverage (TiC). The goal of the rules is to provide pricing and cost sharing information by health insurance companies and self-insured health plans to enable consumers with access to price information prior to pursuing treatment.

Among the TiC rules is a requirement that health insurance carriers and organizations with self-funded health insurance make available on a public website three separate machine-readable files. The three required files must contain:

  • Information detailing in-network provider rates for covered items and services;
  • Out-of-network allowed amounts and billed charges for covered items and services and;
  • Negotiated rates and historical net prices for covered prescription drugs.

Originally, these requirements were scheduled to be effective on January 1, 2022. But in August 2021, new guidance changed how and when these rules would be enforced. Under the new guidance, the requirement for separate machine-readable files containing in-network information and out-of-network information to be published was delayed until July 1, 2022. The enforcement of the requirement for a machine readable file containing prescription drug information is delayed indefinitely.

Entities who offer fully-insured plans do not need to worry about these new requirements as their health insurance carrier will be responsible for posting and maintaining the machine-readable files.

Entities who self-fund their health plans are required to take steps to comply with the new rules. Qualifying organizations could compile the necessary data for the files themselves, but these files will be very large and are required to be updated monthly. Self-funded organizations may be well-served to work with another party, such as a Third Party Administrator (TPA), to maintain the files, host the files, or do both. The regulations permit these arrangements but the organization should be aware that if the files are improperly maintained or hosted by another party, the organization will be liable for any violations.

If an organization with a self-funded health plan decides to work with another party to create and/or host the machine-readable files, the organization needs to either have the files on their own public-facing website or include a link to the files on their public-facing website. Files or a link to the files posted on an organization’s intranet do not comply with the new TiC rules as the files or link would not be publicly available and accessible. The files or link must be accessible without the creation of a user account or the submission of personal information.

Starting July 1, 2022, organizations with self-funded healthcare must make the following publically available on the internet to comply with TiC rules:

  • A machine-readable file with information pertaining to in-network rates for covered items and services and;
  • A machine-readable file with information pertaining to out-of-network allowed amounts and billed charges for covered items and services.

Key Takeaway

Organizations that leverage self-funded health insurance plans must comply with the TiC rules beginning July 1, 2022. Those organizations who are required to comply with these rules should understand the requirements and work with their legal counsel to ensure compliance. Qualifying organizations may be well-served to work with existing insurance partners to meet their new compliance obligations.

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