On October 29, 2020, the Department of Health and Human Services, the Department of Labor and the Department of the Treasury released the final “Transparency in Coverage” rule. The rule requires most group health plans and issuers to provide individualized cost-sharing information to participants, beneficiaries and enrollees upon request, and to publicly disclose in-network provider negotiated rates, historical out-of-network allowed amounts and drug pricing information. The final rule also amends the medical loss ratio (MLR) rules to allow issuers to receive credit in the calculations for savings they share with enrollees utilizing lower-cost, higher value providers.

The final regulations are similar to the proposed regulations issued on November 15, 2019 (described in this previous blog post). While the proposed rule had included a request for information regarding how providing quality measurements and reporting could be used to complement cost-sharing information, the final rules do not address health care quality and continue to focus on price transparency.


Continue Reading Final Rules Require Health Plans to Publicly Disclose Reimbursement Rates

Beginning in 2011, the medical loss ratio (MLR) requirements of the Affordable Care Act require health insurers to spend at least 85% of premiums for large group policies on medical expenses and activities to improve health care quality.  If an insurer does not meet this requirement, it must rebate to the employer a portion of the collected premiums.  The employer, in turn, is responsible for determining whether and how to pass along the rebate to plan participants.  By August 1, 2012, insurers in the large group market were expected to return $386 million in rebates to employers.

Employers must consider both the implications under ERISA and the Internal Revenue Code in determining how to use the rebates.  Although employers are responsible for determining how to use the rebate, insurers are responsible for notifying employees (and their dependents) who participate in the plan that the employer has received the rebate.  Accordingly, employers should expect questions from both current and former employees regarding their use of the rebate.
Continue Reading How Employers Can Use Medical Loss Ratio Rebates