A federal health insurance coverage price transparency rule takes effect on July 1, 2022, for all health insurance policies renewed between January 1, 2022, and July 1, 2022. For all other plans, the requirement will take effect upon renewal in 2022. The new rule applies to health insurance carriers and employers that offer group coverage excluding:
- Grandfathered plans (Grandmothered plans are affected by the regulation)
- Excepted benefits (e.g., standalone vision, dental, and hearing plans)
- Retiree only plans
- Short-term limited duration plans
- FSAs, HRAs, & HSAs
- Medicare/Medicaid
The regulation requires all affected insurance carriers and group health plan sponsors to make machine-readable data files of health care price information available online and maintain the data. One file must contain all in-network provider negotiated rates, and the other historical out-of-network allowed amounts, all of which must be updated monthly. The regulation initially required a third machine-readable file of prescription drug pricing information to be made available, but that part of the rule was delayed until further notice. So, any group with a renewal between January and July needs to ensure machine-readable files of the rates their plan pays providers are posted on July 1, and all other groups need to make sure their machine-readable files are online and accessible in the month in which their 2022-2023 plan or policy year begins.
Machine-Readable File Requirement for Transparency Deadline
Machine-readable data does not necessarily mean data files that are understandable to the average consumer. However, the information does need to meet detailed technical specifications. Files must include billing codes used to identify items/services, and they must meet the standardized formatting guidelines outlined in the rule. The files cannot be PDF or Excel documents, and they must be publicly accessible, meaning a health insurance carrier or group plan sponsor cannot require any personal information, password, or other credential to view the data.
The machine-readable file that addresses out-of-network allowable charges must show historical payments to and billed charges from out-of-network providers. The files must include all out-of-network payments unless the provider has fewer than 20 claims for the item or service during the reporting period. The reporting period for out-of-network claims information is the 90-day period starting 180 days before the file publication date. The file needs to be updated every month to show the correct reporting period. That means a provider’s claims which were excluded one month might need to be included the next month’s data report based on the number of claims. It also means that all groups need to be prepared to present historical claims data on July 1, 2022.
What Does the Regulation Mean for Your Business
If an employer group of any size offers applicable coverage through a fully-insured health insurance policy administered through a carrier, then the employer plan sponsor may contract with their carrier to fulfill the requirement for them. If the carrier and the employer group agree to this via the renewal contract, then the carrier can assume compliance liability for the employer. The vast majority of fully-insured carriers are offering this as a service.
Employers sponsoring self-funded plans, including those employers who sponsor level-funded plans, always retain compliance liability and cannot shift it to a carrier or other third-party. They may contract with the issuer or other third-party claims administrator or vendor to help them implement and maintain their machine-readable files and online posting responsibilities, but ultimately, it is the plan sponsor’s job to ensure that their plan complies with the new requirements. Also, while the self-funded group can contract with a third party to collect post, and maintain their data via the third-parties website, self-funded and level-funded groups must post a link on their own public website linking to the place online where their machine-readable files are maintained. Therefore, all self-funded and level-funded plans need to make sure they have a plan for posting their data by July 1 or their next renewal date, whichever is applicable. Employers sponsoring self-funded/level-funded plans should confirm with their TPA/carrier whether they plan on assisting with this requirement.
Insurance Carrier Links
Rob is an employee benefits expert with over 25 years of experience. He is the founder and principal of Precision Benefits Group, a leading provider of corporate benefits plans. He is a member of the Philadelphia Business Journal Leadership Trust and regularly contributes to the publication.