Regulatory Resources
On February 2, 2024, Federal regulators (Regulators) issued FAQ Part – 65 in response inquires on how plans and insurers should comply with the cost-sharing disclosure requirements of the Transparency in Coverage Final Rules (Final Rules) for items and services with extremely low utilization when a cost estimate is based on claims data rather than prospective rates.
Regulators responded that the plan or insurer should indicate on the self-service tool that the item or service is covered, but that a specific cost estimate is not available pursuant to the Final Rules because of insufficient data. The self-service tool should encourage the participant to contact the plan or insurer for more information on the item’s or service’s cost-sharing requirements. In cases where the participant, contacts a plan or insurer to request such information, the Regulators encourage the plan or insurer to provide any available relevant benefits information, such as information available on the Summary of Benefits and Coverage or the portion of the cost of the item or service for which the participant, will be responsible.
The plan or insurer must make such information available to a participant upon request for a discrete covered item or service by billing code or descriptive term, and generally must furnish it according to the participant’s request. Specifically, the Final Rules require a plan or insurer to provide cost-sharing information for a covered item or service in connection with an in-network provider or providers, or an out-of-network allowed amount for a covered item or service provided by an out-of-network provider, according to the participant’s request, permitting the individual to specify the information necessary for the plan or insurer to provide meaningful cost-sharing liability information (such as dosage for a prescription drug or zip code for an out-of-network allowed amount).
Regulators stated in the preamble to the Final Rules that plans and insurers may use advanced analytics such as past claims data to produce more accurate cost estimates. In cases where rates for items and services are not negotiated as prospective dollar rates—for example, in percentage-of-billed-charges arrangements—cost estimates may be based only on past claims data. Occasionally, past data may be limited for items or services with very low utilization and therefore may result in less predictive and less accurate cost estimates.
Regulators responded that the plan or insurer should indicate on the self-service tool that the item or service is covered, but that a specific cost estimate is not available pursuant to the Final Rules because of insufficient data. The self-service tool should encourage the participant to contact the plan or insurer for more information on the item’s or service’s cost-sharing requirements. In cases where the participant, contacts a plan or insurer to request such information, the Regulators encourage the plan or insurer to provide any available relevant benefits information, such as information available on the Summary of Benefits and Coverage or the portion of the cost of the item or service for which the participant, will be responsible.
Background
The Final Rules require non-grandfathered group health plans and health insurance insurers offering non-grandfathered coverage in the group and individual markets to make cost-sharing information available to participants through an internet-based self-service tool and in paper form, upon request.* This information must be made available for plan years (in the individual market, policy years) beginning on or after January 1, 2023, with respect to the 500 items and services identified by the Regulators in Table 1 of the preamble to the Final Rules, and with respect to all covered items and services, for plan or policy years beginning on or after January 1, 2024.The plan or insurer must make such information available to a participant upon request for a discrete covered item or service by billing code or descriptive term, and generally must furnish it according to the participant’s request. Specifically, the Final Rules require a plan or insurer to provide cost-sharing information for a covered item or service in connection with an in-network provider or providers, or an out-of-network allowed amount for a covered item or service provided by an out-of-network provider, according to the participant’s request, permitting the individual to specify the information necessary for the plan or insurer to provide meaningful cost-sharing liability information (such as dosage for a prescription drug or zip code for an out-of-network allowed amount).
Regulators stated in the preamble to the Final Rules that plans and insurers may use advanced analytics such as past claims data to produce more accurate cost estimates. In cases where rates for items and services are not negotiated as prospective dollar rates—for example, in percentage-of-billed-charges arrangements—cost estimates may be based only on past claims data. Occasionally, past data may be limited for items or services with very low utilization and therefore may result in less predictive and less accurate cost estimates.
Enforcement Discretion
To ensure that consumers receive accurate cost-sharing information, Regulators stated they are likely to exercise their 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 in paper form, upon request) 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.*The Consolidated Appropriations Act, 2021 imposed a largely duplicative requirement and added a requirement that the information also be provided by telephone, upon request.