August 24, 2021

On Friday August 20, 2021 the Employee Benefits Security Administration (EBSA), acting on behalf of the Departments of Labor, Health and Human Services (HHS), and the Treasury (Agencies), published FAQs granting relief to employers from transparency requirements under the Consolidated Appropriations Act (CAA) prescription and pharmacy reporting and the Final Transparency in Coverage Rules (e.g., the 3 machine-readable files) (TiC). Under previous guidance, these rules would have become effective in December of 2021 and January of 2022, respectively.

How We Got Here

With support and guidance from our members, Business Group on Health, along with other members of the P4ESC coalition, played a prominent role in tri-agency outreach (joint letter and August conference call) to urge and secure this relief.

During the August conference call with the Agencies, the Business Group drove home the message that employers support and desire transparency for their plans and their employees – having invested heavily for many years in navigation, estimation and decision-making tools to help employees and other plan participants make informed health care decisions and to help bend the cost curve. However, the TiC Rules and the CAA requirements, as well as the implementation timelines, were truly unworkable for employer plan sponsors to satisfy unilaterally – putting employers in an untenable position vis-à-vis their carriers, third-party administrators (TPAs) and pharmacy benefit managers (PBMs). The Business Group also highlighted employers’ concerns about the potentially duplicative and overlapping reporting requirements, especially as they relate to prescription drug pricing. It was a robust discussion, and we believe that the Agencies took note.

Key Takeaways from the Published FAQs

The EBSA FAQs provide immediate and broad relief from the transparency requirements as follows:

Machine-readable files of In-network rates (INN), out-of-network allowed amounts and billed charges (OON) due in January 2022:

Agencies will defer enforcement of the TiC Final Rules’ requirement to publish the INN and OON machine-readable files until July 1, 2022.

Machine- readable File for Covered Prescription Drugs due in January 2022:

Agencies will defer enforcement of the TiC Final Rules’ requirement that plans and issuers publish machine-readable files relating to prescription drug pricing pending further rulemaking.

Prescription Drug Reporting under the CAA first due in December 2021:

Agencies will defer enforcement for the first deadline for reporting on December 27, 2021 and the second deadline for reporting on June 1, 2022, pending the issuance of regulations or further guidance.

The FAQs also address several other facets of the TiC Final Rules, providing information about good faith compliance for group health plans and others with several other provisions. We encourage our members to review the FAQs in their entirety and consult with their internal legal counsel as necessary.

Support for Transparency

The Business Group strongly supports the objectives and promise of broad transparency. Our members have long considered transparent and accessible cost and quality data as key elements for driving change in how health care is purchased and contracted for by health plans and how patients shop for health care.

While transparency is important, implementing it the right way is critical. We expect that the additional rulemaking may take some time. We look forward to working with the Agencies and engaging our members to help inform future rulemaking. Any new requirements must consider the role of all system stakeholders in how transparent information is delivered. It should be done in a way that minimizes the administrative burden but still provides accessible information to those who would most benefit from this data.

It is also important to note that while the FAQs defer enforcement, they do not defer the requirements. Employers should continue working with their partners to develop a compliance plan and examine ways to make the transparency data, once available, accessible to patients to facilitate shopping for health care services.

We provide this material for informational purposes only; it is not a substitute for legal advice.

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