How Employers Can Prepare for the Transparency in Coverage Rule

Beginning on July 1, healthcare plans will be required by law to provide more transparent information about the cost of healthcare procedures. The Transparency in Coverage Rule is intended to help U.S. consumers make better informed choices about the cost of healthcare for hundreds of procedures as well as the price of drugs administered by pharmacies. Although the act applies directly to healthcare providers, employers that offer healthcare coverage for U.S. employees should also prepare. U.S. businesses can do this in two ways:

• Communicate to employees the impact of the Rule and resources to help them learn. Rely on all available forms of communication, ranging from email to the corporate intranet.
• Communicate your company’s reaction to the Rule in context of the benefits you provide. Doing so may reinforce the value of your benefits and care and attention you pay to the evolving healthcare landscape.

Let’s take a closer look the Rule.

What Is the Transparency in Coverage Rule?

The act is designed to address a long-standing problem with receiving healthcare in the United States: consumers really don’t know what to expect to pay for procedures and drug costs until after they receive a bill. With healthcare costs continuing to rise amid inflationary times, healthcare plans and providers are under tremendous pressure to give consumers more information about what they can expect to pay for healthcare ahead of time.

The Transparency in Coverage Rule requires health insurers and benefits providers to provide price information to participants in a publicly accessible place.They are required to disclose:

• Advanced Explanation of Benefits (EOBs).
• An online price comparison tool for 500 commonly shoppable services.
• Extensive drug cost information derived from participant claims.
• Plan pricing disclosures.

By July 1, plan sponsors and health plans will need to provide public machine-readable files that display in-network rates, out-of-network allowed amounts, and prescription drug pricing. By January 1, 2023, they must provide an internet-based self-service tool listing personalized, out-of-pocket cost estimates and other price-related data for the 500 predetermined items and services cited above. By January 1, 2024, they must expand this self-service tool to include all covered items, services, and prescription drugs.

How Are Corporate Employers Affected?

Although the rule targets healthcare providers, there is an ongoing conversation about how and whether it applies to any global corporation that provides healthcare for employees in the U.S. Therefore, employers should also prepare to publish the information required by the rule. According to Jay Kirschbaum, benefits compliance director and senior vice president at World Insurance Associates, employers are ultimately responsible for ensuring that this information is ready and available. He said recently that employers that sponsor group health plans are fiduciaries under the Employee Retirement Income Security Act (ERISA) with respect to these plans and participants enrolled in them, just as they are for the retirement plans they sponsor.

Concerning the new price transparency disclosures, “don't think you're off the hook because it will all be handled by insurance carriers or TPAs,” he said. “As fiduciaries, it’s employers who are ultimately responsible under these laws and regulations.”

He urged that employers:

• Amend their administrative-services-only (ASO) agreements to clearly state that their insurance carriers or third party administrators (TPAs) will take all necessary actions to comply with the transparency rules on the employer's behalf.
• Use comprehensive language that refers to all pricing disclosure requirements (even though carriers or TPAs might prefer listing specific actions) to ensure that something isn't overlooked.

At IDX, we also urge employers to take a lead role in educating employees about the impact of the Transparency in Coverage Rule and to provide as much information publicly as possible on your websites. Doing so will build your employer brand for both current and potential employees.

Employers are an increasingly critical source of information for employees. More Americans trust their employer for information than the federal government or the media. Providing employees with an easy-to-find and useful platform to learn about healthcare options builds goodwill and also potentially saves employers money by helping employees make better informed decisions.

What Employers Should Do

There is no stated requirement for employers. It’s implied that as they provide health benefits to their employees, so also do they need to make sure those end recipients get this information as well.

We recommendation that corporations talk with your benefits provider first (especially in the case where you have multiple health insurance options through one benefits provider). Ask what they are doing to ensure they are compliant with Transparency in Coverage, and if they have resources for your employees. If you don’t have a benefits provider and work with a health insurance provider directly, speak with them instead. In benefits providers likely have the required documents and information to disclose. (This isn't news to them; they've had time to prepare).

Decide whether you as an employer organization want to also make this information available -- when and where you’ll want it to appear. For example, some corporations include a link to resources on the Careers page of their website, some add it to the corporate website footer, and some add it in the employee intranet.

There is no direct guidance on where and how the link to resources should appear, other than being “publicly available.” This suggests that information shouldn’t be hidden behind an employee intranet login. But it does require that the information is updated monthly. Consequently, corporations will want to link out to a dynamic page or report provided by their health insurance/benefits provider -- so that end provider is responsible for making the monthly updates, not the end employer.

At IDX, we can help. For the client websites and intranets, we can provide some options for where this information should live on the digital estate and make the update with our managed services solution. This is a good time to reevaluate your corporate and recruitment sites as a whole:

• Can it be updated with new/changing regulations and content?
• Do you have a team to help support these efforts?
• How else can the corporate website better build your employer brand, and at the same time, help support your efforts, not hinder them?

Contact IDX

To learn how we can help you, contact IDX. Our HR & talent acquisition services have deep experience helping businesses succeed.

Additional Resources

• Prepare for Health Care Price Transparency Rules Taking Effect Soon
• CMS.gov: Transparency in Coverage Final Rule Fact Sheet
• United Healthcare: Transparency in Coverage Fact Sheet
• United Healthcare: Transparency in Coverage Sample File Set (for employers to link to)