In 2020, the Centers for Medicare & Medicaid Services (CMS) released the Transparency in Coverage Final Rules (TiC Final Rules) which, among other things, require non-grandfathered group health plans to post on a public website certain plan pricing information in machine-readable files (MRFs) by July 1, 2022.

Many employers (both fully insured and self-insured) have questions about how to comply. In this Client Alert we provide alternatives for compliance, though many insurers and third-party administrators (TPAs) have already taken steps to help ensure that employers are in compliance.

TiC Rules in a Nutshell

The TiC disclosure requirements apply to insurers and most non-grandfathered group health plans, including both insured and self-insured plans. They do not, however, apply to account-based plans (e.g., HRAs and FSAs), excepted benefits, or short-term, limited-duration insurance.

Broadly speaking, group health plans subject to the TiC Final Rules must disclose through three separate MRFs the following pricing information for each coverage option:

1. In-network provider negotiated rates for all items and covered services

2. Historical out-of-network allowed amounts for providers, and

3. In-network negotiated rates and historical net prices for all covered prescription drugs at the pharmacy-location level

The MRFs must be updated on a monthly basis and must clearly state the date the files were last updated. Guidance issued in late 2021 delayed the prescription drug requirements indefinitely. Thus, only the in-network and out-of-network MRFs must be made publicly available by July 1, 2022.

Hosting and Posting Links to the MRFs

Under the TiC Final Rules, the MRFs must be posted on a publicly available internet site accessible to anyone free of charge and without any conditions, such as establishment of a user account, password, or other credentials, or submission of personally identifiable information.

Fully Insured Plans

The TiC Final Rules allow fully insured plans to enter into a written agreement with the carrier to assume responsibility for compliance with the MRF requirements. Where such an agreement exists, the carrier, not the plan or the employer, is responsible for ensuring the MRFs meet all necessary form, content, and public posting requirements.

Self-Insured Plans

The rules allow self-insured plans to contract with its TPA to prepare, host, and update the MRFs. However, unlike their fully insured counterparts, self-insured employers ultimately remain responsible for the TPA’s noncompliance with the TiC requirements.

Few if any employers are able to compile the voluminous information necessary to create the MRFs and the infrastructure to host and update these large files (sometimes over a terabyte of data). Most must rely on their TPA to create and host the files. The TPA should be able to post the files and provide the employer with a link to the MRFs, and the employer must then post it on a public website.

The TiC Final Rules state that “if a plan or issuer chooses not to also host the file separately on its own website, it must provide a link on its own public website to the location where the file is made publicly available” (emphasis added) (as noted above, fully-insured plans can rely on their insurer to meet this requirement). The rules suggest that the link must be posted on the plan’s website (not the employer’s), though most employers that do not have a separate health plan website are complying by posting a link on a benefits or employment section of their company website. More guidance from CMS would be welcome on this issue, as well as how employers with no public website can comply.

In cases where the self-insured employer does not maintain a dedicated website for its group health plan where a link to the TPA’s posting of MRFs can be added, it may consider one or more of the following alternatives for complying with the rules:

• Create a dedicated website or subpage for the plan. Employers who already have a public website could engage a provider to create a stand-alone website for their employee benefit plans where the link can be posted, or create a dedicated plan subpage on the employer’s website.

• TPA-sponsored plan website. Certain TPAs may, in special cases (e.g., where the employer does not have its own public website), be able to assist the employer with establishing a separate public website specific to the employer’s plan where the link can be posted.

• Post on employer’s public website. A self-insured employer could post the link to the MRFs on their own public website. The link would ideally be posted on a subpage where benefits are typically discussed, such as a career opportunities subpage. As noted earlier, this approach would meet the “publicly available” requirements, but may not comply with a strict reading of the rules since the link is not being posted on the plan’s “own public website.” That said, most self-insured plans are utilizing this approach until further guidance is issued.

Action Steps

Group health plans that have not yet taken action should act quickly. Fully insured plans should enter into a written agreement with their insurer under which the insurer agrees to post the MRFs on the insurer’s website and assume responsibility for the MRF disclosure requirements.

Sponsors of self-insured plans should confirm that their TPAs have prepared MRFs that meet the requirements, that the files will be available and made available for posting on the plan’s site or will be posted on a site hosted by the TPA, that the data will be available by the July 1 deadline, and should post a link on the employer’s website to the location where the files are hosted.

The plan sponsor should also review any contracts with the TPA to determine the costs and requirements for providing the information and/or posting and hosting the MRFs. Perhaps most important, they should have identified and be prepared to implement a solution for providing links to the publicly available website where this pricing information will reside.

An experienced healthcare or employee benefits attorney can provide guidance on specific steps that can be taken to ensure compliance with the TiC Final Rules.