Reminder: Transparency Rule for Welfare Plans Takes Effect July 1, 2022

This blog is a reminder that on July 1, 2022, the federal government will begin enforcement of the Transparency in Coverage (TIC) Rules.  The Rules themselves were effective for plan years beginning on or after January 1, 2022, but enforcement was delayed to allow additional time for compliance.

• The TIC Rules require non-grandfathered health plans to publicly disclose information about in-network and out-of-network costs related to covered items and services.  Please read our previous blog on the TIC Rules for details regarding the scope, manner and content of those disclosures.
  • Note that requirements regarding disclosures of prescription drug costs (as discussed in that blog) has been delayed pending further review of how best to integrate those disclosures with similar requirements in the Consolidated Appropriations Act of 2020.
• The disclosures must be made on an internet website using machine-readable files.

A fully insured plan

• May satisfy the requirement by entering into a written agreement with the plan’s insurance company for the latter to fulfill the disclosure requirements.  This will insulate the plan from any penalties imposed for violations of the Rule’s requirements.  Employers with fully insured plans should contact their insurers regarding that agreement.

Self-insured plans:

• Will want to contract with their third-party administrators to fulfil the disclosure requirements.
• However, the group health plan will remain responsible for the TPA’s failures.
  • Accordingly, employers will want to ensure that the contractual arrangements with their TPAs include appropriate indemnification provisions.
• A plan that uses this option must provide a link on its own public website to the location where the information may be retrieved.
  • The rules are unclear whether this means that self-insured health plans must create a public website (if they don’t already have one) solely for the purpose of displaying the link; or if the plan sponsor can include the link on its own website; or whether other options are available.
• Employers should confer with their own counsel on the best way to meet this requirement.