On Nov. 15, 2019, the Departments of Labor, Health and Humans Services, and the Treasury issued a proposed rule regarding transparency in coverage. What does this mean to you as a small employer? In technical terms, this rule could impose new transparency requirements on group health plans and health insurers in the individual and group markets - meaning your employees would better understand the costs associated with their health plans. This rule would make healthcare pricing information much more readily available to the public which, while opposed by several hospital groups, would provide better scope for restoring good faith and trust in the country’s healthcare system amidst the uncertainty of today.
Everybody wants to know upfront what they’re getting into and how much it could cost them, whether it’s trying out a new service or product, or in this case, buying health insurance plans through an employer versus individually. In consumer-terms, it’s called the “right to information”. That is, in a nutshell, exactly what the afore-mentioned Departments are trying to do with group insurance plan providers and sponsors. It’s an “open door” approach towards health insurance information. The rule would require employers (and plan issuers) to disclose:
Cost-sharing estimates to participants, beneficiaries, and enrollees upon request (that is, how much of the cost the employee will have to bear), and
In-network provider negotiated rates and historical out-of-network allowed amounts (that is, alternative insurance provider prices for your employees, as consumers, to choose from) on their websites.
Self-insured group health plan sponsors will have to comply with the above as well. It also won’t affect grandfathered policies (those that were in place before the Affordable Care Act).
The rule was a response to an executive order signed by President Trump on June 24, 2019, aimed at improving price and quality transparency in health care. It is intended to increase the availability of information pertaining to group health care prices and quality, protecting patients from surprise medical bills. This means health plan providers must outline the expected out-of-pocket costs for items or services to patients before they receive care. It’s also extremely beneficial to your employees who will be able to comparison-shop for their health plans based on their respective prices and coverage through you, their employer, giving you an added bonus of a team of trusting, loyal workers.
Specifically, the proposed rule will help make health care information accessible in the following 2 ways:
Health plan providers of non-grandfathered plans should disclose out-of-pocket cost details for covered services and items through an online self-service tool and in paper-form available upon request to participants, beneficiaries and enrollees. It should include the individual’s cost-sharing liability for health care from different providers.
Health plan providers or sponsors of non-grandfathered plans should disclose the in-network provider-negotiated rates and historical payments of allowed amounts to out-of-network providers through standardized, regularly updated, machine-readable files, to the public (all stakeholders, including consumers, employers, researchers).
Of course, this rule is still a proposition meaning it is open to comments and debate for 60 days from its release. If it does come into effect, it will become applicable 1 year after the finalization of the rule. In other words, there is still some time left for you to decide what group plans to offer, and to understand the ins and outs of how the proposed cost transparency can affect your decision.
If you are unsure about what this rule could mean for your business, get in touch with the experts at NY Small Health and find out how you can receive the best group or individual health plan, tailored to fit the needs of you and your staff while being in compliance with every rule in the book.