Lykes – ACA Compliance

Email Subject: What you need to know about Transparency Requirements

Your Frost Insurance Benefits Compliance Team is continuing to ensure that you receive the latest information and resources to keep your group health plans in compliance with current regulations, and we are pleased to provide some of the most Frequently Asked Questions (FAQs) regarding the upcoming Transparency in Coverage Final Rules (TiC Final Rules) requirement.

As background, guidance indicates that group health plans and health insurance issuers must disclose detailed pricing information in machine-readable files (MRFs). Many of our customers have questions about this obligation. Because you offer a self-funded plan, we have customized the FAQs most applicable to your plan design.

Q/A-1: Our self-funded carrier sent us correspondence indicating a July 1, 2022 effective date. We have a December 1 plan year beginning date. Should we have posted Machine Readable Files (MRFs) already?

Answer: While insurance carriers and TPAs had to comply by a hard deadline of July 1^st- the same was not true for employers sponsoring self-funded group health plans. Instead, the enforcement deadline occurs on a rolling plan year basis. Please find a table below outlining the enforcement deadlines, by plan year beginning date:

Q/A-2: We have a Benefits Administration System or Intranet Portal for our employees. We posted the MRF link there. Is that acceptable?

Answer: Unfortunately, no. The files must be posted on a site available to the general public, meaning not just employees, but regulators, industry groups, application developers, etc. Additionally, the files “must be publicly available and accessible to any person free of charge and without conditions,” such as having to establish a user account, password or other credentials, and without having to submit any personal identifiable information such as a name, email address or telephone number in order to access the file. See Treas. Reg. § 54.9815-2715A3(b)(2) (Page 82 of the PDF)

Q/A-3: We do not have a public facing website. Do we still have to comply with the MRF posting requirement?

Answer: Recent guidance from the Centers for Medicare and Medicaid Services (CMS) finally clarified this point, in Q/A#37, which may be reviewed here. They said that if a group health plan does not have a public website, the plan may satisfy the requirements for posting the Allowed Amount file and the In-Network file by entering into a written agreement under which a service provider (such as a TPA) posts the Allowed Amount file and the In-network Rate file on its public website on behalf of the plan. However, if a plan enters into an agreement under which a service provider agrees to post the Allowed Amount file and the In-network Rate file on its public website on behalf of the plan, and the service provider fails to do so, the plan violates these disclosure requirements.

Q/A-4: Can we post the files in the “Careers” section of our website?

The regulations state the group health plan sponsor has discretion as to the exact location on the public website, since they are in the best position to determine where the files will be most easily accessible by the intended users. The most important thing is to ensure the files must be accessible and free of charge without having to establish a user account, password or other credentials, and without having to submit any personal identifying information such as a name, email address or telephone number.

Q/A-5: Some places say we have to post the actual files, but some places say we have to post a link. Which is it?

In the majority of cases, only the link where the files are actually housed will need to be posted on the employer’s website. The files will actually be maintained and updated monthly on a separate website- such as the insurance carrier’s website or the third party administrator’s website. The regulations clearly allow employers to enter into an agreement with a third party (such as a TPA) or their health insurance carrier (issuer) to provide and maintain the required information; however, the responsibility remains with the group health plan or the issuer if the third party fails to perform.

Q/A-6: Is there a disclosure to include?

Answer: There is no official disclosure language. However, some employers have opted to include language similar to the example below:

“This link leads to the machine-readable files that are made available in response to the federal Transparency in Coverage Rule and includes negotiated service rates and out-of-network allowed amounts between health plans and healthcare providers. The machine-readable files are formatted to allow researchers, regulators, and application developers to access and analyze data more easily.”

Q/A-7: The files provided by our insurance carrier or TPA are unreadable. I think there is a mistake. In what format must the files provided?

Answer: Many are confused by the file formatting. The file format is not in Excel or PDF. The regulations define MRFs as files presented in a digital format that can be imported or read by a computer system for further processing without human intervention, while ensuring no semantic meaning is lost. A common file format is JSON, which is not typically understandable by the average layperson. The expectation is that researchers and application developers will be able to pull the JSON data, manipulate it, and then present it in ways that the average employee can understand- such as through a health care shopping comparison App or online tool, many of which are still being developed.

Q/A-8: What exactly must be disclosed under the MRF requirement?

Answer: Generally, the insurer or TPA will handle the exact disclosure obligations.

However, if an employer chooses to decline the offer from the insurer or TPA to handle the obligation, the employer will want to review the guidelines for creating the MRF, which are located on the CMS website: https://github.com/CMSgov/price-transparency-guide. Specifically, the following information must be disclosed:

• First file: In-network provider negotiated rates for covered items and services (the “In-network Rate File”);
• Second file: Historical payments to and billed charges from out-of-network providers (the “Allowed Amount File”); and
• Third file: In-network negotiated rates and historical net prices for covered prescription drugs (the “Prescription Drug File”)—this particular MRF requirement is delayed until further notice.

Q/A-9: What if we previously offered a fully insured plan, but moved (or are considering moving) to a self-funded plan for our upcoming plan year?

Answer: When moving to a self-funded plan, the MRF posting requirements shift to the plan sponsor/employer and the plan will be required to post MRFs to a publicly accessible website. Additional action will be required, please reach out to your Frost Insurance contact to discuss further.

Q/A-10: We are a local municipality, local governmental plan, church plan, or other non-ERISA plan. Do we still have to comply?

Answer: Yes. This requirement is enforced by several agencies- the Department of Labor and Centers for Medicare and Medicaid Services. While the DOL has jurisdiction for enforcement for private employers, CMS has enforcement authority for non-ERISA plans, such as local governmental entities and church plans.

Q/A-11: Do you have a table that compares the requirements, depending on the kind of group health plan we offer our employees?

Answer: Yes, please find a helpful table below.

Additional Resources:

Transparency in Coverage Final Rule Fact Sheet

FAQs about Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 49