Health Plan Transparency Compliance: Written Agreements with Insurance Carriers, Third-Party Administrators or Pharmacy Benefit Managers
Federal law (in particular the Affordable Care Act (ACA) and the No Surprises Act (NSA)) includes a variety of health plan transparency requirements applicable to group health plans and health insurance issuers. Some of these requirements are already in effect, and others have yet to take effect.
While a group health plan’s insurance carrier or third-party administrator will, in many cases, do most of the heavy lifting to comply with these requirements, plan sponsors should still be proactive to help ensure they are compliant. The requirements apply directly to an employer’s group health plan. Under federal law, the group health plan is distinct from the insurance carrier issuing an insurance policy providing benefits under the group health plan or from any third party that provides claims administration services to the plan. As a result, plan sponsors may be subject to penalties or enforcement action if their group health plans do not independently comply with these transparency requirements.
That being said, the regulations implementing the transparency requirements that have been issued to date have generally allowed group health plans (and their sponsors) to rely on third parties (e.g., insurance carriers, TPAs, PBMs, etc.) to assist them in complying, so long as certain conditions are satisfied. These regulations include:
- The ACA transparency regulations, which require group health plans (i) to make available, on a public website, certain machine-readable files (MRFs) containing health plan data by the later of July 1, 2022, or the first day of the plan year beginning in 2022 and (ii) to make available to participants, on an internet website, a selfservice tool that may be used to obtain cost-sharing and pricing information by the first day of the plan year beginning in 2023; and
- The regulations issued under the prescription drug reporting requirements of the NSA (under which the initial reporting is due December 27, 2022).
These regulatory provisions, which differ depending on whether the plan is fully insured or self-insured, are discussed below.
Fully Insured Plans
Although the transparency requirements for fully insured plans apply to both the employer’s group health plan and the insurance carrier issuing the group insurance policy, the regulatory agencies generally do not expect the group health plan and insurance carrier to comply separately with the requirements. The regulations issued so far have included an “unnecessary duplication” provision, such as the following provision that was included in the final ACA transparency regulations:
Special rule for insured group health plans. To the extent coverage under a group health plan consists of group health insurance coverage, the plan satisfies the requirements of this paragraph (b) if the plan requires the health insurance issuer offering the coverage to provide the information required by this paragraph (b) in compliance with this section pursuant to a written agreement. Accordingly, if a health insurance issuer and a plan sponsor enter into a written agreement under which the issuer agrees to provide the information required under this paragraph (b) in compliance with this section, and the issuer fails to do so, then the issuer, but not the plan, violates the transparency disclosure requirements of this paragraph (b).
To access the machine-readable files created and published by United Healthcare, please click here.