Legal Alert

Holiday Relief for Reporting Requirements

by Edward I. Leeds
December 27, 2022

In a new set of Frequently Asked Questions, the U.S. Departments of Labor, Health and Human Services, and the Treasury provide significant relief to health plan sponsors and insurers seeking to report on expenditures for prescription drugs and other health care items and services in compliance with the Consolidated Appropriations Act, 2021. The new guidance has an immediate effect on reports that otherwise would be due now.

Immediate Relief. Under prior guidance, plan sponsors and insurers are required to report specified information about prescription drug and other health care costs for 2020 and 2021 by today, December 27, 2022. Recognizing the complexity of the new rules and the difficulties plan sponsors with multiple vendors face in coordinating the provision of information, the FAQs provide that the departments will not take any enforcement action against plan sponsors and insurers that miss the deadline, provided that they submit the information in accordance with a good-faith interpretation of the rules no later than January 31, 2023.

Reporting Guidance. Following up on its reporting instructions and prior FAQs, the new guidance addresses several issues that plan sponsors and their vendors face in preparing reports:

  • The new guidance now allows entities that report information for more than one plan or issuer to make more than a single submission.
  • Where prior guidance required a single-reporting entity for each data file type, the new guidance allows multiple-reporting entities to enter data for each type.
  • The FAQs address certain other technical matters, including:
    • For 2020 and 2021 data only, prescription drug data does not need to be at least as granular as the health plan data reported for a particular state or market segment.
    • Plans submitting only the plan list, premium and life year data, and narrative information may submit that information by email instead of through the governmental portal.
    • The reporting of national drug codes for vaccines is optional.
    • Requests for information about amounts not applied toward a plan’s deductible or out-of-pocket maximum may be left blank.

Considerations. The restrictions and complexity of the new rules have posed challenges for plan sponsors. Those who have not yet submitted information will particularly welcome the temporary non-enforcement policy, but will need to work with their vendors to submit appropriate and complete information by the enforcement deadline. Insured and self-funded plans should have contractual commitments from their vendors to submit appropriate information.

The application of a good-faith standard will be welcome news to all. Plan sponsors who already have made submissions may consider if any adjustments are appropriate at this time in view of the new guidance.

All plan sponsors should keep in mind that the deadline for submitting information for the 2022 calendar year remains June 1, 2023.

Attorneys in Ballard Spahr’s Health Care and Employee Benefits and Executive Compensation Groups monitor and analyze legislative developments. Our attorneys help clients understand the relevant changes and plan for the future. We understand how legal developments in the health care system can affect business. Guided by years of experience in the health industry, we prepare clients for legislative and regulatory changes and help them meet new requirements quickly and efficaciously. Please contact us for more information.

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