🗓️ July Updates
Keeping HR pros up to date with important compliance updates and human resource articles.
July 1st Deadline to Post Machine-Readable Files
In August 2021, the Departments of Health and Human Services, Labor, and Treasury released guidance delaying several health plan price transparency disclosure requirements of the Transparency in Coverage Rule and the No Surprises Act. Several of the updated deadlines just took effect on July 1, 2022. MOST employers will rely on their insurance carriers and third-party administrators (TPA’s) to provide the machine-readable files (MRFs). Below is a Q&A to summarize these requirements and any applicable employer action steps.
What is the Transparency in Coverage Rule?
The Transparency in Coverage Rule is a federal regulation issued by the Departments of Health and Human Services (HHS), DOL, and Treasury in November 2020. The rule implements a section of the ACA requiring insurers and group health plans to:
- Offer an online price comparison tool for beneficiaries that includes personalized cost-sharing covered service and items, including prescriptions.
- Provide publicly available machine-readable files that include detailed information on in-network negotiated rates and historical data for out-of-network charges for covered services and items, including prescriptions.
What is the No Surprises Act?
The No Surprises Act is a part of the Consolidated Appropriates Act (CAA), a COVID-related stimulus package that became law in December 2020. The law was designed to restrict out-of-network healthcare charges that “surprise” individuals with unexpected bills. Most provisions of the Act don’t directly impact employer-sponsored healthcare coverage, but there are a few rules that small to midsize businesses must comply with, especially regarding health plan price transparency. The law requires group health plans to:
- Provide an “advanced” explanation of benefits, including good faith estimates of out-of-pocket expenses for specified scheduled medical services.
- Report prescription drug cost information in detail, including the 50 most expensive and the 50 most covered drugs per plan.
What Are the Health Plan Price Transparency Disclosure Deadlines?
In August 2021, HHS, DOL and Treasury released FAQs about the impending health plan price transparency disclosures. Most notably, the key requirements and deadlines are as follows:
- Online price comparison tool – delayed until January 1, 2023.
- Machine-readable files – Due July 1, 2022. Requires group health plans and health insurance issuers to disclose on a public website detailed pricing information in three separate readable files. Specifically, the following information must be disclosed:
- First file: In-network provider negotiated rates for covered items and services (the “In-network Rate File”)
- Second File: Historical payments to and billed charges from out-of-network providers (the “Allowed Amount File”)
- Third File: In-network negotiated rates and historical net prices for covered prescription drugs (the “Prescription Drug File”) – please note that this particular MRF file is delayed until further notice.
The files must be publicly available and accessible free of charge without any restrictions.
What Are the Employer Responsibilities & Action Steps?
Most employers will rely on their insurance carriers and third-party administrators (TPAs) to prove the MRFs. The Final Rule allows fully insured employers to shift legal responsibility for the MRFs to their carriers. Self-insured employers can use their TPAs (or other service providers) for the MRFs if this is set forth in a written legal agreement. Still, these employers remain legally liable for compliance under the Final Rule.
The Final Rule suggests that self-insured employers may be required to post a link on their websites to where the MRFs are publicly available, but this is not clearly addressed in the Final Rule. To access the Final Rule – Transparency in Coverage Final Rules
How Are the Major Medical Carriers Handling the Posting of MRFs?
Blue Cross Blue Shield Michigan
Fully Insured – posted on the public website
Self-Funded – link posted within the employer portal; needs to be copied and pasted and linked in the group’s public domain without any password requirements. This file will update accordingly. There is no need to update unless otherwise notified.
Fully Insured – public link will be posted here – https://transparency-in-coverage.uhc.com/; It is NOT recommended that you open the file, as it is a non-standard format and could harm your computer.
Level Funded/ASO – customers were emailed a link to post to their website. It has to be posted in an easily accessible location; cannot require a password and cannot be on the company Intranet.
Fully Insured – will be posted on the public website by 7/1/22.
Level Funded/ASO – self-funded employers must also host the files themselves by downloading them monthly. Still waiting for clarification on where this will be accessed.
Level Funded/ASO – A link is posted on their website for a link to the company that is hosting the files for the networks, as they are the ones needing to provide the information.
Group Marketing Services
Level Funded/ASO – A link is posted on their website under the MEMBER heading; www.groupmarketingservices.com
Level Funded/ASO – Companies that contract with an outside vendor for PPO pricing did not receive the files by July 1st. From what Liberty Union has shared with us, they are only aware of one PPO nationwide that is ready to send files.
Price Comparison Tool Required for 2023 Plan Years
The Final Rule requirement to provide a price comparison tool applies to group health plans (including self-insured and level-funded plans) and health insurance issuers. However, the requirement doesn’t apply to Plans with grandfathered status, excepted benefits (such as limited-scope vision and dental benefits) and account-based plans (such as HSAs, HRAs, FSAs).
Most employers will rely on their health insurance issuers or TPAs to develop and maintain the price comparison tool and provide related disclosures in paper or over the phone upon request. Employers with fully insured health plans should confirm that their health insurance will comply with the price comparison tool requirements, beginning with 2023 plan years, and ensure this compliance responsibility is reflected in a written agreement. Similarly, employers with self-insured plans should reach out to their TPAs (or other service providers) to confirm they will be complying by the deadline and update agreements, as necessary.
PCORI Fees Due August 1, 2022
Self-insured Plans: The ACA imposes PCORI fees on health insurers and self-insured plan sponsors. PCORI fees are reported and paid annually using IRS Form 720. These fees are due each year by July 31 of the year following the last day of the plan year. For plan years ending in 2021, the next PCORI fee payment is due Aug. 1, 2022, since July 31, 2022 is a Sunday. The PCORI fees generally apply to insurance policies providing accident and health coverage and self-insured group health plans. The final regulations contain some exceptions to this general rule, and also clarify how the PCORI fees apply to certain types of health coverage arrangements.
PCORI Fees for HRA’s: In the PCORI fee final regulations, the IRS did not provide an overall exemption for HRAs. However, they outline two special rules for plan sponsors that provide an HRA. Under these special rules, if a plan sponsor does not establish or maintain an applicable self-insured health plan other than an HRA, the plan sponsor may treat each participant’s HRA as covering a single life. In addition, an HRA is not subject to a separate PCORI fee if the plan sponsor also maintains another self-insured plan providing major medical coverage, as long as the HRA and the plan have the same plan year.
Roe v. Wade Overturned & Employer Considerations
The U.S. Supreme Court in a June 24th decision upheld Mississippi’s restrictions on abortion, a ruling that may lead employers to revise their employee health benefits. Since this ruling, we have been fielding many questions from employers on what this may mean for their workplaces moving forward. Employers should understand the issues that may present themselves and what legal development should be monitored.
While there is no specific mandate or ban on covering abortion costs at the federal level, many states have passed their own regulations regarding abortion coverage. More states are likely to ban or restrict abortion coverage under health plans. The scope of benefits that may be provided by a health plan will depend on the specific restrictions that are imposed at the state level.
In the state of Michigan, there is a preliminary injunction currently blocking Michigan’s 1931 law banning most abortions. This nearly-century old Michigan law is technically in effect, since the Supreme Court ruling superseding it has been overturned. However, our Michigan Court of Claims Judge issued an injunction in May that blocks the law from being enforced. So, as of Monday, June 27th, abortion is legal in Michigan and the state’s 1931 abortion ban cannot be enforced.
Employers that are considering offering abortion-related benefits, such as out-of-state travel to a jurisdiction where abortion laws may be more accommodating should keep in mind compliance and liability considerations. If you are considering covering travel costs for abortions, our recommendation is that you offer this benefit for a variety of procedure categories such as abortion services, behavioral health services, cancer treatment, cardiac services, human organ transplant, maternity/reproductive health services, musculoskeletal procedures, etc.
There is much to consider so we also advise that you seek legal counsel before making changes to your current policies. Stay tuned as we will see more developments on this topic in the future.