When must group health plans comply with the CAA 2021 Advanced Explanation of Benefits (AEOB) requirement?

Although the CAA 2021 AEOB provision was effective January 1, 2022, the DOL, IRS, and CMS (the departments) deferred enforcement of this requirement. The departments have not yet specified an enforcement date but recently provided an update on their progress towards AEOB rulemaking and implementation. 

Under the CAA 2021, individuals are entitled to a good faith estimate of expected charges and an AEOB prior to receiving healthcare services, including services from an out-of-network (OON) provider. For example, when a participant schedules a service (or requests information), the healthcare provider or facility must provide the individual and their plan or insurer with an estimate of the expected charges, including the billing and diagnostic codes. The plan or insurer must then send the individual an AEOB, which includes: 

• Whether the provider or facility is in-network (INN) or OON, and if: 

  • INN — the contracted rate for the service or item. 

  • OON — an explanation of how to find an INN provider and/or facility.   

• A good faith estimate of the cost of the anticipated service(s) and or item(s), including any participant cost-sharing and any accrued amounts already met by the participant towards their deductible and out-of-pocket maximum. 

• Any applicable medical management techniques (e.g., prior authorization). 

• A disclaimer that the information is only an estimate and subject to change (and any other information or disclaimer the plan determines is appropriate). 

The AEOB must be provided to the participant within one business day of the plan’s receipt of the good faith estimate (or within three business days if the estimate or request is made at least 10 business days before the scheduled procedure). The advanced EOB is designed to help participants understand their expected costs before items or services are furnished and allow them to make cost-conscious decisions about their care. Participants can also use the estimates to compare prices among providers.  

In 2021, the departments deferred rulemaking and enforcement of the good faith estimate and AEOB for insured individuals until they established standards for the technical exchange of the required data between providers, payers (including plans and insurers), and participants.  

As mentioned above, on April 23, 2024, the departments provided a progress report on implementation of the AEOB.  The update included a summary of comments received in response to a September 2022 Request for Information. Among other items, commenters advocated for the testing of any data exchange standards in real-world settings before a national rollout. They also expressed concerns about participant privacy.  

According to the update, the departments studied various types of healthcare providers, payers, and third-party vendors to understand their technical needs and capabilities, existing claims processes, communications channels, and potential financial and operational constraints. Additionally, the departments engaged digital service researchers, who recommended a single data exchange standard for the transmission of data between payers and providers and emphasized that current published technical standards may not be sufficient to meet the AEOB requirements. As a result, new standards may need to be developed to ensure successful implementation. 

Accordingly, the AEOB enforcement date for group health plans does not appear imminent; however, plan sponsors should be aware of the recent progress report. We will be monitoring for further developments regarding the AEOB implementation. We are also awaiting announcement of enforcement dates for the initial CAA 2021 air ambulance reporting and Transparency in Coverage Final Rule prescription drug machine-readable file posting. Please stay tuned to Compliance Corner for updates on these requirements.

For an overview of group health plan transparency and CAA 2021 requirements, please download a copy of the PPI publication Transparency and CAA 2021 Obligations of Group Health Plans.