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Final Rule on Healthcare Transparency to Affect Most Group Health Plans

Nov 11, 2020 Decorative image: health insurance form

Last month, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a Transparency in Coverage final rule that imposes new requirements on non-grandfathered group health plans as it relates to healthcare transparency. The requirements apply to both fully insured and self-funded plans, yet do not apply to grandfathered plans.

This proposed rule was issued in response to an executive order issued on June 24, 2019, that was aimed at improving price and quality transparency in healthcare. Among other things, the executive order directed the Departments to issue a proposed rule to require healthcare providers, insurers and self-insured health plans to provide patients with information about expected out-of-pocket costs for medical items or services before they receive care.

The requirements of the final rule will apply on a phased-in basis:

• For plan years beginning on or after January 1, 2022: Plans and issuers will be required to disclose on a public website their in-network negotiated rates, billed charges and allowed amounts paid for out-of-network providers, and the negotiated rate and historical net price for prescription drugs.

• For plan years beginning on or after January 1, 2023: Personalized cost-sharing information, for an initial list of 500 shoppable services, must be made available to plan participants through an internet-based self-service tool and in paper form upon request.

• For plan years beginning on or after January 1, 2024: Personalized cost-sharing information for the remainder of all items and services must be made available to plan participants through an internet-based self-service tool and in paper form upon request.

The final rule also allows issuers that share with consumers savings resulting from consumers shopping for lower-cost, higher-value services, to take credit for those “shared savings” payments in their medical loss ratio (MLR) calculations. This is intended to ensure that issuers would not be required to pay MLR rebates based on a plan design that would provide a benefit to consumers that is not currently captured in any existing MLR revenue or expense category.

Reach out to your Hylant representative for further information.

The above information does not constitute advice. Always contact your employee benefits broker or trusted adviser for insurance-related questions.

Author Holly Wahl, Hylant Vice President, Employee Benefits Compliance Leader