New regulatory guidance from three federal agencies that enforce private-sector benefits laws will make employers’ daunting 2021 health benefit to-do lists slightly—but only slightly—more manageable heading into 2022.
Most importantly, the frequently asked questions (FAQ) guidance delays several of the most challenging 2021 and 2022 compliance requirements under the Consolidated Appropriations Act, 2021 (CAA) and the Patient Protection and Affordable Care Act (ACA): so-called “advanced explanations of benefits” (EOBs) providing good-faith estimates of the out-of-pocket costs for scheduled medical services; a “price comparison tool” to enable participants to compare cost-sharing amounts for specific network providers; extensive drug cost information that was to have been reported to the federal regulators in December 2021; and public pricing disclosures related to in-network rates, out-of-network allowed costs, and prescription drug prices.
The FAQ guidance, issued August 20, 2021, by the U.S. Department of Labor, U.S. Department of Health and Human Services, and U.S. Department of the Treasury, also provides some relief or useful clarifications related to other key 2021 health benefit compliance items for employers, including gag clauses, identification cards, continuity-of-care requirements, and provider directories.
The FAQ guidance neither delays nor provides other relief related to the new surprise medical billing requirements under the No Surprises Act, which was enacted as part of the CAA and is set to take effect January 1, 2022, or the Mental Health Parity and Addiction Equity Act “comparative analysis” required by the CAA, which is already in effect.
Here is a summary of the key employer takeaways in the new FAQ guidance.
Advanced EOBs
Under the No Surprises Act, plans are required to provide good-faith estimates of expected provider charges for a specific scheduled service, along with good-faith estimates of the cost sharing that would apply to a participant, and the amount already incurred toward any financial responsibility limits. This was initially set to take effect January 1, 2022, but the guidance indicates that the agencies will defer enforcement until regulations are issued on these plan disclosures and the disclosures required by medical providers. (Question 6)
Price Comparison Tool and Public Price Disclosures
Under the No Surprises Act, plans are required to offer online tools and phone support to enable participants to compare cost-sharing amounts for specific network providers in a specific region. Separately, under the ACA, plans are required to offer three “machine-readable files” on a public website covering in-network rates, out-of-network allowable amounts, and prescription drug prices. Both the No Surprises Act and ACA requirements were set to take effect on January 1, 2022. The guidance delays the effective date of the No Surprises Act requirements to January 1, 2023, and the ACA in-network and out-of-network requirements to July 1, 2022. The ACA prescription drug requirement is delayed until the agencies issue regulations on the matter. (Questions 1-3)
Drug Cost Reporting
The CAA requires employer plans to report very detailed prescription drug cost information to the agencies, including the 50 most commonly covered drugs per plan, the 50 most expensive drugs per plan, and the total health spending for each plan broken out into specific categories. The initial reports were to be provided to the agencies by December 27, 2021, and then by June 1, 2022. The agencies will defer enforcement related to the 2021 and 2022 reports until they issue further guidance, though the agencies “strongly encourage plans” to get ready to report 2020 and 2021 plan year data no later than December 27, 2022. (Question 12)
Gag Clauses
Under the CAA, plans cannot enter into network or other agreements that would prevent them from making available provider-specific cost or quality-of-care information to providers or participants, electronically accessing de-identified claims and encounter information for each participant (consistent with privacy laws), or sharing either of those types of information with business associates. Plans have to attest to the agencies each year that they have no such clauses in their agreements. This requirement took effect on enactment of the CAA on December 27, 2020, and is not changed by the FAQ guidance. The agencies have indicated that additional guidance is forthcoming on how plans will attest to their compliance. (Question 7)
Insurance Cards
Under the No Surprises Act, plans have to update physical or electronic insurance cards to include network and out-of-network deductibles and out-of-pocket limits and consumer assistance contact information. This is set to take effect on January 1, 2022, a date unchanged by the FAQ guidance. The guidance does clarify, though, that the agencies will consider both data actually on the cards and data “made available through information that is provided on the ID card.” (Question 4)
Continuity of Care
Under the No Surprises Act, when a provider or network contract is terminated, plans have to take steps to protect hospitalized or other continuing care patients. This requirement will take effect on January 1, 2022. The guidance clarifies that the agencies intend to issue formal regulations on this requirement, but will not do so before the effective date. Until such regulations take effect, plans will be held to a good-faith compliance standard. (Question 10)
Provider Directories
Under the No Surprises Act, plans are required to take several steps to improve provider directories, such as updating them at least every 90 days, and more promptly notifying participants about whether a particular provider is in the network. These requirements will take effect on January 1, 2022, and the guidance does not change that. The agencies do indicate that they intend to issue formal regulations in the future, and may also have specific additional guidance on required disclosure of balance billing information. (Questions 8 and 9)
