On June 23, 2021, the Department of the Treasury, Department of Labor (DOL), and Department of Health and Human Services (collectively, the Departments) issued a request for input from the public regarding reporting requirements for group health plans and health insurance issuers under section 204 of Title II of Division BB of the Consolidated Appropriations Act, 2021 (CAA), which is the title that follows after the No Surprises Act (Title I of Division BB). The reporting requirements pertain to the costs of medical services and prescription drugs. The Departments will take the public comments into account in issuing regulations and establishing processes to receive the required information.

Optional Action Needed: Comments must be received no later than 5 p.m. on July 23, 2021, in one of the following three ways:

1. Electronically at https://www.regulations.gov/

2. By regular mail to:

3. By express or overnight mail to:

Background

Per the legislation, additional reporting requirements apply to group health plans and health insurance issuers (generally insurance companies and health maintenance organizations). From the request for comments, it appears that if your plan is fully insured, your insurance provider would be required to do the required reporting to the DOL. If your plan is self-insured, the plan would be required to submit the required reporting to the DOL.

Brief Summary of Legislation

The legislation has the first required report due to the DOL by December 27, 2021, and then by each June 1 thereafter. Under the statute, the new report is to include the following information:

• General information on the plan or coverage, such as the beginning and end dates of the plan year, the number of participants, beneficiaries, or enrollees, as applicable, and each state in which the plan or coverage is offered.
• The 50 most frequently dispensed brand prescription drugs and the total number of paid claims for each such drug; the 50 most costly prescription drugs by total annual spend and the annual amount spent by the plan or coverage for each such drug; and the 50 prescription drugs with the greatest increase in plan expenditures over the plan year preceding the plan year that is the subject of the report, and, for each such drug, the change in amounts expended by the plan or coverage in each such plan year.
• Total spending by the plan or coverage broken down by the type of health care services (i.e., hospital costs, health care provider, and clinical service costs (for primary care and specialty care separately), prescription drug costs, and other medical costs, including wellness services).
• Total patient spend on prescription drugs by the plan.
• The average monthly premiums or premium-equivalents (for self-insured plans) paid by participants and by employers on behalf of participants, beneficiaries, and enrollees, as applicable.
• Amount received for rebates, fees, and any other remuneration paid by drug manufacturers to the plan or coverage or its administrators or service providers split by therapeutic class of drugs and for each of the 25 drugs that yielded the highest amount of rebates and other remuneration under the plan from drug manufacturers during the plan year.
• Plans and issuers must report any reduction in premiums and out-of-pocket costs associated with these rebates, fees, or other remuneration.

Specific Items for Comments are Requested:

The Departments and the Office of Personnel Management (OPM) are requesting comments from all interested stakeholders to gain a better understanding of the issues related to compliance with this provision, including reporting on premiums, enrollment, pharmacy drug benefits, and prescription drug costs. The Departments ask for comments for the following specific areas which are (A) general implementation concerns, (B) the definition of terms, (C) the entities that must report, (D) the information that is required to be reported, (E) coordination with other reporting requirements, (F) public report and privacy protections, and (G) regulatory impact analysis.

The request contains 41 questions (some of which have multiple parts) divided into the seven areas, A through G. Below we list a few of the questions:

• What, if any, challenges do plans and issuers anticipate facing in meeting the statutory reporting obligations? (See question A.1.)
• What considerations should the Departments and OPM take into account in defining rebates, fees, and any other remuneration; pharmacy; prescription drug; therapeutic drug; and health care services? (See questions B.1.-B.6.)
• Are there special considerations for certain types or sizes of group health plans, such as individual coverage health reimbursement arrangements and other account-based plans, which make it challenging or not feasible for these plans to satisfy the reporting requirements? (See question C.1.)
• Should the Departments expect that self-insured and partially-insured group health plans will contract with third-party administrators or other service providers to submit the required data on their behalf?  (See question C.2.)
• What role, if any, will Pharmacy Benefits Managers play in furnishing necessary information to plans and issuers, or to the Departments? (See question C.4.)
• What considerations are important for plans and issuers in determining the 50 brand prescription drugs that are most frequently dispensed by pharmacies for claims paid by the plan or coverage, and the total number of paid claims for each drug? Should the determination be based on the number of claims, the number of days’ supply, or something else? Should the unique number of participants, beneficiaries, or enrollees that received a prescription be taken into account, and, if so, how?  (See question D.1.)
• What considerations are important for plans and issuers in measuring the impact of drug manufacturer rebates on premiums and out-of-pocket costs? (See question D.8.)

CHEIRON OBSERVATIONS:  It will likely be difficult for many plans to comply with the reporting requirements because only their Pharmacy Benefits Managers (PBM) will know the rebates, fees, and other remuneration by drug or therapeutic class of drugs, and their contract with their PBM may not allow them access to this information. It also may be especially challenging for calendar year plans given the timing is within five days of the No Surprises Act implementation.

Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.