Price Comparison Transparency Tool Expanded for 2024

Beginning for plan years on or after January 1, 2024, group health plans and health insurance issuers must expand the internet-based price comparison tool they make available to participants, beneficiaries, and enrollees so that it includes all covered items, services, and drugs (not only the 500 most common shoppable services as required for plan years beginning in 2023).

Employer Action Items

While most employers rely on the carrier or third-party administrator (TPA) to develop and maintain the price comparison tool on their website, to help ensure compliance, employers should consider the following action items:

• Plan sponsors of fully insured health plans. If you have not already done so, obtain written confirmation that the health insurance issuer has agreed to provide the price comparison tool on their website, and provide the related disclosures on paper or over the phone upon request.
• Plan sponsors of self-insured, including level funded, health plans. We recommend that you contract with the TPA (or another service provider) to confirm that they are providing this tool and that this responsibility is addressed in a written agreement. In addition, monitor their compliance with this requirement. Unlike fully insured plans, the legal responsibility for this tool stays with a self-insured plan even if its service provider agrees to provide the price comparison tool on your behalf.

Background

The purpose of a price comparison tool is to provide consumers with real-time estimates of their cost-sharing liability from different providers for covered items and services, including prescription drugs, so they can shop and compare prices before receiving care. Upon request, plans and issuers also must provide this information in paper form or over the telephone.

On October 29, 2020, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the “Departments”) issued final rules (“TiC Final Rules”) to effectuate this objective. The TiC Final Rules adopted a three-year phased-in approach for implementing its disclosure of cost-sharing information requirements. Phases II and III specifically address price transparency.

• Phase I became effective beginning with plan years on or after January 1, 2022, in which most health plans and issuers of group or individual health insurance (other than grandfathered health plans) were required to begin posting pricing information for certain covered items and healthcare services in separate machine-readable files.
• Phase II became effective for plan years on or after January 1, 2023, and requires health plans to make an internet-based pricing tool available to participants to address the top 500 shoppable items, services, and drugs.
• Phase III is the final phase of this approach and requires that an internet-based pricing tool be made available for the remaining covered items, services, and drugs no later than January 1, 2024.

More Information

Additional information is available on the CMS website.

For questions regarding this Legislative Update or any other related compliance issues, please contact your Burnham Benefits Consultant or Burnham Benefits at 949‐833‐2983 or inquiries@burnhambenefits.com.

This Legislative Update was prepared by the Baldwin Regulatory Compliance Collaborative (the “BRCC”), a partnership of compliance professionals offering client support and compliance solutions for the benefit of the Baldwin Risk Partners organization, which includes: Jason Sheffield, BRP National Director of Compliance; Richard Asensio, Burnham Benefits Insurance Services; Nicole L. Fender, the Capital Group; Bill Freeman, AHT Insurance; Stephanie Hall, RBA/TBA; Caitlin Hillenbrand, AHT Insurance; Paul Van Brunt, Baldwin Krystyn Sherman Partners (BKS); and Natashia Wright, Insgroup.

Burnham Benefits and the BRCC do not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with applicable federal and state law requirements, and is based on our interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.