This is the 46th in a series of WorkCite articles concerning the Patient Protection and Affordable Care Act and its companion statute, the Health Care and Education Reconciliation Act of 2010 (referred to collectively as the Act). This article addresses the October announcement by the Centers for Medicare and Medicaid Services (CMS) of another delay in enforcement of the Act’s transparency provisions for issuers selling plans on health insurance exchanges and for non-grandfathered insured group and individual plans.

In April 2013, CMS had said it would hold off enforcing the transparency requirements until qualified health plan issuers had operated their plans for one benefit year. CMS’ October announcement states that no data submissions will be required until CMS provides further guidance.

What Are the Act’s Transparency Requirements?

The Act requires the Department of Health and Human Services (HHS) to establish criteria for certification of insurers’ health plans as “qualified health plans” eligible to be sold on the exchanges, including marketing requirements, ensuring sufficient choice of providers, implementing quality improvement and using uniform enrollment forms and formats for presenting health plan options. Consumer advocates are most interested in Section 1311(e)(3) of the Act, which sets forth the following nine categories of data that insurers must disclose for their qualified health plans:

  • Claims payment policies and practices
  • Financial disclosures
  • Data on enrollment
  • Data on disenrollment
  • Data on the number of claims denied
  • Data on rating practices
  • Information on cost-sharing and payments with respect to any out-of-network coverage
  • Information on enrollee and participant rights under this title
  • Other information, as determined appropriate by the secretary of HHS

The disclosure requirements also apply to insured non-grandfathered group health plans and individual plans not sold on the exchanges. It does not apply to self-insured group plans or grandfathered plans.

What Does the Delay Mean?

The Act requires that insurers submit the above information to the public, HHS, state insurance commissioners and any applicable exchanges. Because CMS has now delayed enforcement twice, it is unclear when this requirement will be met.

Before the open-enrollment period for the exchanges last year, HHS issued extensive regulations after input from consumers, insurers and others, as to cost-sharing data – deductibles, copayments and co-insurance. Although cost-sharing data were included on the Internet as part of the comparison of plan options available during last year’s open-enrollment period, HHS still has not published rules for the nine categories of consumer protection coverage data set out in Section 1311(e)(3).

The delay in enforcement reflects the greater complexity of the coverage data and the corresponding challenges in developing disclosure rules. Moreover, HHS’s recent efforts have focused on improving the Act’s open-enrollment system, plagued by computer challenges last year.

Consumer advocates believe that disenrollment numbers, claims denial and appeals numbers and information on use of out-of-network coverage will be instructive about the consumer experience with health plans under the Act. Actual consumer data arguably helps state insurance regulators understand how benefit coverage decisions impact consumers.

The National Association of Insurance Commissioners (NAIC) wants a discussion about methods for collecting this consumer protection data. One solution would be for the NAIC to work within the HHS regulatory process to determine collection methods and presentation, so there is one agreed-upon method for collecting and presenting these data.

While the coverage data are important to many groups, it makes sense to wait to address the remaining consumer transparency data until after the close of this year’s open-enrollment period. The delay gives insurers a full benefit year of data before they must submit the required information to the exchanges, HHS, state insurance commissioners and the public. A more coordinated and openly vetted process of collection and presentation of data should result in a more helpful product for consumers, the exchanges, insurance commissioners and HHS.