As employers work toward annual enrollment and new service contracts for their health plans, it is key to remember one of the changes to enhance disclosure to individuals contained in the “No Surprises Act” and Transparency in Coverage rules. Beginning on January 1, 2024, there will be an expanded disclosure requirement for group health plans to provide price comparison information for all covered items and services. The No Surprises Act intends to clarify for individuals what their likely costs will be for out-of-network service providers at a facility and for air ambulance services.
When an individual seeks treatment, schedules items or services, or otherwise requests, the transparency-in-coverage provisions of the No Surprises Act require a health care provider to send to the individual’s insurer or group health plan a good-faith estimate of all of the expected charges for the service or item scheduled.
When the individual’s plan or insurer receives the Good Faith Estimate (GFE), such health plan or insurer must prepare an Advanced Explanation of Benefits (AEOB) and provide it to the individual, showing a number of data points, including the network status of the providers, the contracted rate for the item or service, and the share of costs that the individual is likely to be responsible for with respect to the scheduled service.
FAQs 60 issued last week (July 7, 2023) by the U.S. Department of Labor, the U.S. Department of Health and Human Services, and the Internal Revenue Service clarifies the price comparison information required to be made available to individuals beginning on January 1, 2024. Significantly, data that must be included in the price comparison tool and shown for uninsured or self-pay individuals includes facility fees that are being charged by health care providers outside of the hospital setting where a facility fee is normally charged. The FAQs encourage health care providers to minimize the burden on individuals from the imposition of facility fees, and while these fees are not yet required to be disclosed to persons who are in a health plan or have insurance coverage through the GFE or AEOB, the three Departments indicated that the facility fees will be required in forthcoming proposed regulations on good faith estimates and advance explanation of benefits.
FAQs 60 also clarifies the extent to which a provider is considered to have a contractual relationship with an insurer and must be considered in-network for the required limits under the Patient Protection and Affordable Care Act’s maximum out-of-pocket limits.
Employers should consider visiting with their group health plan vendors regarding the status of their preparation for the transparency in coverage, good faith estimates, and advance explanations of benefits required under the No Surprises Act, as explained further under FAQs 60.
In additional proposed regulations released on the same day, Short Term Limited Duration Insurance or Level Premium Plans may have a limited shelf life. Proposed regulations were published aimed at curtailing the use of these insurance tools for longer durations than three months as health plan coverage for purposes of the employer shared responsibility tax minimization. The progression of these proposed regulations through the regulatory process needs to be monitored by employers offering such limited coverage as their useful life may be limited.
For additional information on the Frequently Asked Questions (FAQs) regarding implementation of certain provisions of the Affordable Care Act and the No Surprises Act, please see FAQs About Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 60.
The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice. For additional assistance related to the new disclosure requirement for group health plans, please contact Greta E. Cowart or a member of the Employee Benefits & Executive Compensation (ERISA) practice.
Greta E. Cowart has counseled employers for more than 30 years on best practices in human resources and employee relations related to benefits and executive compensation. In her practice, Greta routinely develops strategies for effective administration of claims and other disputes, including defense of grievances, and in ERISA claim litigation, while also considering applicable labor and employment laws. Greta also provides fiduciary training and review of fiduciary operations to improve the documentation of the fiduciary process.