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Summary: On February 2, 2024, the Department of Health and Human Services (HHS), together with the Department of Labor (DOL) and the Department of the Treasury (collectively, the “federal agencies”) released an FAQs document providing compliance guidance with respect to the health plan cost-sharing tool requirement in instances of extremely low utilization rates for certain items and services.
Read on for more information.
Non-grandfathered group health plans are required to provide a searchable, internet-based self-service tool that reflects accurate cost-sharing and rate information for plan participants, in accordance with the Transparency in Coverage (TiC) Final Rules. The TiC Final Rules were passed in late 2020 with the intended goal of helping consumers make informed health care decisions and hopefully lead to improved health outcomes. Group health plans have a significant role in supporting this goal by providing plan participants with required information in compliance with the TiC.
This self-service tool requirement was implemented in two phases:
Note that the following plans are not subject to the TiC requirements:
In an effort to increase health plan pricing transparency for participants, the TiC self-service tool is designed to provide estimates of cost-sharing responsibility for a specific item or service from a specific provider. The intent of the self-service tool is to enable health care consumers to compare cost and quality across health care providers and choose those providers that work best for themselves and covered dependents while also managing their finances.
The searchable, internet-based self-service tool must disclose the following data elements:
Plans are also required to provide cost estimates, free of charge, in paper format or over the telephone upon a participant’s request. This paper disclosure must be mailed out within two business days of receiving the request.
The federal agencies released this new FAQ guidance acknowledging that, in certain, limited circumstances, group health plans may not be able to provide accurate cost-sharing estimates as required by the TiC Final Rules for items and services with extremely low utilization rates. In these instances, the federal agencies will likely exercise their discretion, on a case-by-case, not to bring enforcement actions against group health plans for failure to include information in their self-service tool (or upon paper or phone request) for items and services in which:
In these instances, the group health plan should indicate on the self-service tool that the item or service is covered, but that a specific cost estimate is not available due to insufficient data. Additionally, the self-service tool should encourage plan participants to contact the plan for more information on relevant cost-sharing amounts.
For plan participants that contact the group health plan directly, instead of using the self-service tool, the plan should provide any available relevant information, such as information available on the Summary of Benefits and Coverage (SBC), or the cost-sharing portion of the item or service for which the participant will be responsible.
Since plan carriers and third-party administrators (TPAs) are in the best position to regularly update the TiC self-service tool, group health plans must rely on them for full compliance with these requirements, including this new FAQ guidance.
On a related note, the TiC compliance requirements for group health plans also require public posting of machine-readable files (MRFs), specifically:
The first two MRFs listed above (in-network and out-of-network rates) were required to be posted on the public websites of group health plans by July 1, 2022. Click here and here for prior Risk Strategies articles detailing these MRF requirements.
The federal agencies initially deferred enforcement of the prescription drug MRF requirement. However, the federal agencies rescinded their deferred enforcement policy for the prescription drug MRF in September 2023 and indicated they will develop technical requirements and an implementation timeline for enforcement in future guidance. Once the federal agencies release this updated guidance, group health plans are advised to work with their plan service providers (carriers, TPAs, and/or pharmacy benefit managers) to update contractual obligations for compliance with the prescription drug MRF requirement.
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 The FAQ document provides an example of rates based on a percentage of billed charges and where cost-sharing is based on a percentage of those charges.
 The FAQ document states that to determine whether this 20 different claim threshold is met, group health plans’ contracted service providers (such as carriers, TPAs) may aggregate claims for items and services for more than one plan in a manner consistent with how the service provider uses claims data to support the self-service tool.