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Departments finalize transparency in health coverage rule

Benefits Administration and Outsourcing|Health and Benefits|Total Rewards|Integrated Wellbeing

By Anu Gogna and Benjamin Lupin | November 11, 2020

Most group health plans or health insurance issuers will need to provide plan participants with an explanation of benefits prior to receiving care.

The Departments of Health and Human Services (HHS), Labor and Treasury have issued final regulations (along with a news release and fact sheet) on transparency in health coverage required under the Affordable Care Act (ACA). The final regulations are generally consistent with the proposed regulations1 that were released in November 2019 in that they include two approaches to make health care price information accessible.

The final rule will start taking effect in 2022, but its full implementation will be delayed until 2024. These regulations are in response to President Trump’s Executive Order on Improving Price and Quality Transparency. Essentially, health insurance issuers (for fully insured plans) and third-party administrators (for self-insured plans) will be required to provide plan participants with an explanation of benefits prior to receiving care.

Under the final regulations most non-grandfathered2 group health plans3 or health insurance issuers offering health insurance coverage in the individual and group markets must make available certain disclosures:

  • To the public, including such stakeholders as consumers, researchers, employers and third-party developers: Three separate machine-readable files must include detailed pricing information for plan years that begin on or after January 1, 2022:

    • The first file must show negotiated rates for all covered items and services between the plan or issuer and in-network providers.
    • The second file must show both the historical payments to, and billed charges from, out-of-network providers. Historical payments must have a minimum of 20 entries to protect consumer privacy.
    • The third file must detail the in-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level.
  • To participants, beneficiaries and enrollees (or their authorized representatives): Personalized out-of-pocket cost information, and the underlying negotiated rates, for all covered health care items and services, including prescription drugs, must be provided through an internet-based self-service tool and in paper form upon request.

    • An initial list of 500 shoppable services, as determined by the departments, must be available via the internet-based self-service tool for plan years that begin on or after January 1, 2023.
    • The remainder of all items and services will be required for these self-service tools for plan years that begin on or after January 1, 2024.


1 See “Proposed regulations designed to increase health care cost transparency,” Insider, November 2019.

2 The term “grandfathered” is defined in the ACA and is used in regulations and other agency guidance to refer to certain group health plans and health insurance coverage existing as of March 23, 2010 (the date the ACA was enacted).

3 The final rules do not apply to excepted benefits, such as limited-scope dental or vision plans, or to account-based group health plans, such as health reimbursement arrangements (HRAs) (including individual coverage HRAs) and health flexible spending accounts.

Title File Type File Size
Insider November 2020 PDF .4 MB

Senior Regulatory Advisor, Health and Benefits

Senior Regulatory Advisor, Health and Benefits

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