New Health Plan Cost-Sharing Tool for 2023

As 2022 begins to wind down into fourth quarter, yet another compliance deadline looms on the horizon for group health plans. This one, in accordance with the Transparency in Coverage (TiC) Final Rules (finalized in November 2020), requires non-grandfathered group health plans to provide a searchable, internet-based self-service tool that reflects accurate cost-sharing and rate information for plan participants. This self-service tool requirement will be implemented in two phases:

• The first phase requiring information for 500 specified items and services to be accessible to plan participants by January 1, 2023.

• The remaining covered items and services under the TiC rules must be available through this self-service tool for plan years beginning on or after January 1, 2024.

Since plan carriers and third-party administrators (TPA) are in the best position to create and regularly update this TiC self-service tool, group health plans must rely on them for compliance with this requirement. Read on for more details and important information.

TiC Background

The TiC Final Rules were passed in late 2020 with the intended goal to help 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.

The TiC compliance requirements for group health plans includes a three-year, phased-in approach for non-grandfathered group health plans to provide plan participants with:

1. MRFs: Public access to the in-network and out-of-network machine-readable files (MRF) on July 1, 2022. Click here and here for prior Risk Strategies articles detailing the MRF requirements.

2. Searchable, internet-based self-service tool: Cost-sharing information provided to plan participants via an online self-service tool detailing 500 specified items and services for plan years that begin on or after January 1, 2023; and

3. Searchable, internet-based self-service tool: Cost-sharing information provided to plan participants via an online self-service tool detailing all covered items and services for plan years that begin on or after January 1, 2024.

Note that the following plans are not subject to the TiC requirements:

• Grandfathered plans, excepted benefit plans, retiree-only plans, short-term limited duration insurance plans, and account-based plans such as Flexible Spending Accounts (FSAs), Heath Reimbursement Arrangements (HRAs), and Health Savings Accounts (HSAs).

TiC Self-Service Tool Details

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 family members while also managing their finances.

At first, the tool will include information for 500 specified items and services for plan years beginning on or after January 1, 2023. Eventually, the tool will include information for all covered items and services for plan years beginning on or after January 1, 2024.

The searchable, internet-based self-service tool must disclose the following data elements:

• Estimated cost-sharing: Provide an estimate of the cost-sharing liability for a covered item or service by providers at the time the request is made, including deductibles, coinsurance, and copayments.

• Accumulated amounts: Inform plan participants of their status related to plan “accumulators” limits at the time the request is made (e.g., amounts that count toward deductibles, out-of-pocket maximums, visit or treatment limits, etc.).

• In-network rates: Inform plan participants of the negotiated rate or the underlying fee schedule rate, reflected as a dollar amount, for in-network providers for a requested covered item or service.

• Out-of-network allowed amounts: Provide the maximum amount a group health plan would pay for a covered item or service furnished by an out-of-network provider. Alternatively, the tool also may reflect another amount that would provide a reasonably accurate estimate of what a plan would reimburse an out-of-network provider for a covered item or service.

• Bundled payments: Disclose cost-sharing information for each item and service within an applicable bundled payment arrangement.

• Prerequisites: Inform plan participants of applicable coverage prerequisites, such as prior authorization or step therapy, that must be satisfied before they can receive an item or service.

• Disclosure notice: Provide a disclosure notice in plain language (written and presented to be understood by an average plan participant) containing specific disclosures at the time the request is made. A Model Notice is available from the federal agencies and may be used for this purpose.

Plans are also required to provide cost estimates, free of charge, in paper format upon a participant’s request. This paper disclosure must be mailed out within two business days of receiving the request.

For phase one of the TiC cost-sharing disclosure tool requirements, the list of the 500 items and services can be accessed here. This webpage will be updated quarterly by the governing federal agencies to reflect any items or services that are no longer valid. Plans will be granted a reasonable amount of time to update their self-service tools to reflect current codes.

Penalties

Penalties for noncompliance with TiC requirements, including the self-service tool, may include corrective actions and/or a civil money penalty up to $100 per day for each violation and for each individual affected by the violation.

Next Steps for Employers

As mentioned earlier, since plan carriers and TPAs are in the best position to create and regularly update the TiC self-service tool, group health plans must rely on them for full compliance with this requirement.

• Fully-Insured Medical Plans: Employers sponsoring fully-insured medical plans should rely on their insurance carriers for full compliance with the TiC self-service tool requirement. For good measure, fully-insured plan sponsor employers are encouraged to receive written confirmation from their carriers that the TiC self-service tool for those specified 500 items and services will be fully operational in advance of the first compliance deadline of January 1, 2023.

• Self-Funded Plans: Employers sponsoring self-funded medical plans (including level-funded plans) are directly responsible for the TiC self-service tool requirement but should contract with their TPA or other third-party vendor to satisfy this obligation via a written agreement. However, as with most compliance obligations, if the TPA or other contracted vendor fails to satisfy this TiC requirement, the self-funded plan bears the ultimate responsibility for such failures.

With the first compliance deadline of January 1, 2023 quickly approaching, employers sponsoring group health plans are advised to reach out to their carriers and/or TPAs now to ensure compliance.

Aside from the compliance obligations outlined here, the TiC self-service tool provides a well-timed opportunity for employers sponsoring group health plans to educate employees of the importance of comparing health care quality and cost through meaningful use of the service-service tool. This, in turn, can lead to employees becoming more informed health care consumers.

Finally – while on the topic of upcoming compliance deadlines for group health plans, don’t forget about the December 27, 2022 deadline to submit detailed prescription drug pricing and healthcare spending data to the Centers for Medicare & Medicaid Services. Click here for a Risk Strategies article with important information for group health plans to comply with this data reporting deadline.

Reach out directly to your Risk Strategies representative with any questions or contact us at benefits@risk-strategies.com.