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June 29, 2022
Self-funded employers that are not prepared for the July 1st Machine Readable Files disclosure –consider the following steps:
- Obtain a link to the machine readable files from your third party administrator.
- Post this link on your public facing website under a statement to this effect:
“Please follow this link www.eg.com (the link your TPA or administrator provided you) to XYZ Company ( your company or organization) Health Plan’s publicly available machine-readable files as required by the Transparency in Coverage federal regulations.”
- If your third party administrator has not yet provided you a link to the machine readable files information —they should have provided you explanation why in writing. Keep this on hand should a federal regulator contact you about compliance ( as proof of your good faith effort); continue to work through Apex and your administrator to get the link established –and maintain a log of the administrator’s progress
A Review of the Requirement
The transparency in coverage (TiC) rules require a group health plan to post links to machine-readable files containing pricing information ( below) on a publicly available website. Employers with fully insured medical plans can rely on the insurance carrier to satisfy this requirement. Things are not so clear for the employer-sponsored self -funded plan.
General Rule Review: Transparency in Coverage Machine-Readable Files
- In late 2020, the Departments of Labor, Health and Human Services, and the Treasury (Departments) issued final Transparency in Coverage (TiC) rules under the ACA.
- The TiC rules require non-grandfathered health plansto provide public pricing disclosures via three separate sets of machine-readable files posted on the health plan’s public website:
- (1) In-Network File: Negotiated rates for covered items and services between the plan and in-network providers.
- (2)Out-of-Network File: Historical allowed amounts and billed charges for covered items and services provided by out-of-network providers
- (3)Prescription Drugs File: Negotiated rates and historical net prices for covered prescription drugs.
- The original Effective Date: for the disclosure was for the plan year beginning on or after January 1, 2022
- Enforcement delayed to July 1, 2022, for the in-network and out-of-network files.
- Prescription Drug Files has been delayed indefinitely ( pending further rulemaking and determination of whether the requirement is still needed in light of additional disclosures for Rx costs added by CAA 2021).
- “Machine-readable file” is defined by the TiC rules to mean “a digital representation of data or information in a file that can be imported or read by a computer system for further processing without human intervention, while ensuring no semantic meaning is lost.” A computer system must be able to read the data in a non-proprietary, open format such as JSON, XML, and CSV.
Disclosure Requirements: Files Posted on Publicly Available Website-Issues !
- The TiC rules provide that a “group health plan or health insurance issuer must make available on an internet website” the required three machine-readable files described above.
- The group health plan or insurance carrier must update the machine-readable files monthly and clearly indicate the date the files were most recently updated.
- Furthermore, the TiC rules provide that these “machine-readable files must be publicly available and accessible to any person free of charge and without conditions, such as establishment of a user account, password, or other credentials, or submission of personally identifiable information to access the file.” In other words, these files must be available on a public website that anyone can access without any restrictions.
These rules apply directly to the insurance carrier for employers sponsoring fully insured medical plan options. However, the employer is responsible for satisfying this machine-readable files’ disclosure obligation for any self-insured medical plan options.
Practical Issues and Concerns for Employers Sponsoring a Self-Insured Plan
Employers with a self-insured medical plan face three main challenges with respect to the public website posting requirement:
- Ensuring Your TPA Will Create and Update Machine-Readable Files
No employer is reasonably able to compile and update the information needed to satisfy the content requirements for these machine-readable files. Employers will need to ensure the TPA for the self-insured plan will create and maintain these files as part of their standard administrative services arrangement. Fortunately, the TiC rules specifically recognize this issue and permit the group health plan to enter into an arrangement by agreement for the TPA to create and maintain these machine-readable files.
- Hosting the Large Files
These machine-readable files contain an immense amount of data, which can lead to very large file sizes. File sizes may exceed a terabyte for some plans. Employers may not have the website hosting capability to post such large files on a website maintained by the employer. Therefore, employers will look to the TPA to host these files and provide links the employer may post for public access.
- Where to Link to the Machine-Readable Files
In the only realistic scenario, the TPA will be creating, maintaining, and hosting the machine-readable files that satisfy the TiC rules. However, that still leaves the open question: Where do employers post the links to those files? The TiC rules require the disclosure by the group health plan, which is a different entity from the TPA ( and actually, from the employer).
The TiC rules provide that “if a plan or issuer chooses not to host the file separately on its own website, it must provide a link on its own public website to the location where the file is made publicly available.”
Employers will usually have a non-publicly available website for the group health plan. These sites maintained by employers require employees to first login with their credentials. This will not satisfy the public disclosure component of the TiC rules.
Options when the employer does not maintain a publicly available group health plan website:
TPA-Created Group Health Plan Microsite: Some TPAs have offered to create a publicly available group health plan website on the employer’s behalf (called “microsites).”
Non-Publicly Available Group Health Plan Website: Employers may have no practical option available other than to post the links to the machine-readable files on their:
- non-publicly available group health plan website, or
- on their non-publicly available employer intranet or benefits administration system where they typically post employee benefits-related materials.
Although this will not meet the “publicly available” standard in the TiC rules, there may be no other viable option for employers unwilling to create (or make publicly available) a website for the group health plan.
Create a Publicly Available Group Health Plan Website: Employers may determine the only viable path is simply to create a publicly available group health plan website. That may be a site created in its entirety for this TiC disclosure purpose. Nothing in the TiC rules or guidance states that an employer is required to take this more dramatic step ( nor does it say that shouldn’t).
Employer’s Public-Facing Primary Customer Website: the most likely way to address this issue is placing links to the machine-readable files on the employer’s corporate public-facing website for customers. The TiC rules are clear that the “group health plan” is to make the machine-readable files publicly available, and under ERISA the group health plan is a separate legal entity from the employer. Rarely if ever would an employer have a section related to their group health plan On their public-facing website. And using the public website makes this approach dubious from both a compliance and practical standpoint, but many have opted to go this route. Regulators have indicated this is acceptable for now.
Employers still need further guidance from the Federal Agency Departments to better understand how to properly address this “missing link” component of the TiC rules.