Are You Ready to Meet the Upcoming Transparency Requirements for Self-Funded Employers?
The federal government has taken action in recent years to increase price transparency. This includes statutory changes enacted by Congress and regulatory changes made by the US Departments of Labor, Health and Human Services and the Internal Revenue Service.
These laws have created several new compliance requirements for employers. Because they stem from different laws and federal rules, they don’t fit perfectly together. In July of 2020 the Trump administration established the Transparency in Coverage (TiC) regulations. Other requirements became law as a result of the Consolidated Appropriations Act of 2021 (CAA), an omnibus spending bill passed by Congress. These requirements have staggered effective dates and implications for self-funded employers.
Updated Transparency Checklist for Employers
We understand that the changing laws and compliance requirements are difficult to track. The Alliance has asked Attorney John Barlament of Reinhart Boerner Van Deuren to update his compliance checklist for self-funded health plans. This updated checklist covers the latest new guidance and offers refreshed advice for self-funded employers. You can find the updated checklist here.
The checklist outlines the following requirements and regulations:
- Prohibition of gag clauses
- Mental health parity comparative analyses
- Required fee disclosures
- Continuity of care
- Insurance cards and provider directories
- Surprise billing protections
- Health plan machine readable files
- Advanced explanation of benefits
- Provider nondiscrimination
- Pharmacy information
- Self-service cost estimating tool
- Price comparison tool
- Air ambulance cost data
- Self-service cost estimating tool
Employers working with a third-party administrator (TPA) and other vendors should pay attention to necessary contract amendments to ensure their interests are protected. Your contract should spell out exactly what services the TPA and vendors are providing. Make sure the contract extends some of the obligations even after the contract expires to ensure future reporting can be coordinated and completed accurately.
Remember that self-funded employers are ultimately responsible for making sure their plan is compliant with all new requirements. It is important to protect your interests in any new contract language with your vendors. Employers and other plan sponsors could have fiduciary liability if they do not ensure their plans comply with these rules.
Upcoming Deadline: Prescription Drug Reporting
Please note the next big deadline coming up for employers is December 27, 2022. At this time, plans will need to submit certain information on their prescription drug spending. Refer to requirement #10 on the checklist for more information. Hopefully you are already talking with your TPA and pharmacy benefits manager (PBM) about who will be responsible for submitting this report. You can find the guidance from the federal government on this requirement here.
Please note that the requirements for price estimation tools and reporting air ambulance costs are due shortly after that.
Penalties for Noncompliance
When it comes to penalties for noncompliance, there’s good news and bad news. The bad news is that the employer penalty for noncompliance with many of the requirements can be a steep $100 per day per affected individual. Previous record of compliance, the gravity of the violation and whether or not the employer is making an effort to comply may be considered. You need to submit a corrective action proposal if your plan is found to be noncompliant. You will be given time to correct deficiencies.
If you are not ready to meet the requirements, we urge you to review the checklist and get any necessary paperwork in place with your TPA or other vendors as quickly as possible, before many of the requirements go into effect.
Do You Have Questions? The Alliance is a Resource for You
The Alliance is here to help in any way we can. If you have questions not addressed by the updated checklist, please reach out to us by clicking the “Learn More” tab and we can direct you to resources to help you.