By Lauren Bikoff, MLS
Health plan cost savings may result from the No Surprises Act.
Employers need to be proactive regarding compliance with the new transparency rule and the No Surprises Act, according to experts at a recent Segal webinar. Both the rule and the new law contain effective dates of January 1, 2022, which is less than a year away. While compliance may have initial, administrative costs, the speakers noted that there is a potential for health plan cost savings, but only if companies begin preparing early, and engage in a multi-prong communication strategy to employees and plan participants.
Background. In November 2020, the Departments of the Treasury, Labor, and Health and Human Services jointly issued final rules that set forth requirements for group health plans and health insurance issuers in the individual and group markets to disclose cost-sharing information upon request to a participant, beneficiary, or enrollee, including an estimate of the individual’s cost-sharing liability for covered items or services furnished by a particular provider. The requirement for the publicly available data files will take effect for plan or policy years beginning on or after January 1, 2022. Plans and issuers must make cost-sharing information available for 500 specified items and services for plan or policy years beginning on or after January 1, 2023, and must make cost-sharing information available for all items and services for plan or policy years beginning on or after January 1, 2024.
The No Surprises Act was included in the Consolidated Appropriations Act, 2021. Under the law, insured individuals will pay in-network amounts for certain emergency services furnished by an out-of-network provider or facility. Health plans and providers will negotiate payment amounts between themselves and can resort to independent dispute resolution if no agreement is reached. These rules go into effect for plan years beginning on or after January 1, 2022.
Preparation. "Talk to your vendors, your PBMs, your TPAs, today, next week, or as soon as possible," said Ed Kaplan, senior vice president and national health practice leader at Segal. "Compliance is less than a year away. If you are an insured plan, you will have to make sure your vendors are taking care of compliance for you."
According to Kathryn Bakich, senior vice president at Segal and national director of health plan compliance, if the plan is insured, the insurer will be responsible for compliance. "However, while self-insured group health plans may enter into written agreements for compliance with the service providers, the self-insured plan retains compliance responsibility," she noted.
As with any new rules or laws, there are going to be some administrative and compliance costs. "There are definitely going to be administrative costs and implementation costs, such as for plan document changes and changes to communications materials," said Kaplan. "But I have always thought that transparency and more access to information is a good thing. It will level the playing field and we can use that to leverage better outcomes and better prices for our health plans."
Communication. The concept of consumerism has been around for a long time, noted Jennifer Benz, senior vice president communications leader at Segal Benz. Employees’ engagement with the newly required health care plan cost information is up to the company’s communication strategy.
"If we really want to make this new law and this new regulation have true strategic impact, we’re going to have to get participants engaged," said Benz. "And we’re not going to be able to do that by just telling them that there are new tools of information out there. We are going to have to really take them through a whole journey of understanding what’s available, really starting to use the tools in ways that they can match their ability, and then eventually get them to take action on that data. So, if your goal is to really change the way people are engaging with this information, it is going to take a big effort."
Benz noted that it has historically been difficult to get people to use cost comparison tools. "I would recommend going out and talking to your participants," she concluded. "Ask them: what do you know about how your current plan works? We have big, big gaps in health literacy. We have a lot of work to do to fill in those gaps of education and understanding."
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