Departments Issue New Transparency in Coverage FAQ

On February 2, 2024, the DOL, HHS, and IRS (the departments) issued FAQ guidance on the implementation of certain requirements under the Transparency in Coverage (TiC) Final Rules. This FAQ clarifies the participant cost-sharing tool compliance requirements where a plan is providing cost estimates based on claims data, but there is extremely low utilization of the item or service at issue.

As background, the TiC Final Rule issued in October 2020 requires non-grandfathered group health plans to disclose certain data, such as in-network (INN) provider negotiated rates and historical out-of-network (OON) allowed amounts, to the public via machine-readable files posted to a website. (See the October 12, 2023, edition of Compliance Corner for additional information.) Additionally, these plans must provide participants with personalized cost-sharing information for covered services via an online self-service tool, in paper form (upon request), as well as over the phone. The rule has phased-in effective dates from 2022 to 2024, with all items and services required to be available via an online self-service tool for plan years beginning in 2024.

Under the cost-sharing tool requirement, plans must disclose the following cost-sharing information at the request of a participant:

• Estimate of cost-sharing liability for the covered item or service.
• Accumulated amounts incurred to date.
• INN rate (as a dollar amount) for an INN provider (includes negotiated rate and fee schedule).
• OON allowed amount for item or service (if the provider is OON).
• If a bundled payment arrangement, a list of the items or services.
• Any prerequisites for the item or service.

In this FAQ, the departments recognize that in certain limited circumstances, plans and insurers may not be able to provide accurate cost-sharing estimates as required by the TiC Final Rules for items and services with extremely low utilization rates. The departments advise that they are likely to exercise discretion, on a case-by-case basis, not to bring enforcement actions against plans and insurers that fail to include in their self-service tool or fail to provide over-the-phone cost-sharing information for items and services for which a cost estimate for such items and services would need to be based on past claims data and for which there have been fewer than 20 different claims in total over the past three years. For these items and services, the plan or insurers should indicate on the self-service tool that the item or service is covered but that a specific cost estimate is not available according to the TiC Final Rules because of insufficient data. The self-service tool should also encourage the enrollees to contact the plan or insurer for more information on applicable cost-sharing requirements. Where the participant or beneficiary reaches out to the plan directly (rather than using the self‑service tool), the plan should provide all available relevant information (e.g., information available on the SBC).

Employers that sponsor non-grandfathered group health plans should be aware of the recently released FAQ. For further information regarding the cost-sharing tool or other TiC or CAA 2021 requirements, download a copy of our Transparency and CAA 2021 Obligations of Group Health Plans publication.

FAQ About Affordable Care Act Implementation Part 65 »