“Transparency in Coverage” requirements originate from the Affordable Care Act, as passed in 2010, which clarify and enhance the “summary of benefits” provision already found in ERISA. The ACA (42 USC s. 300gg-15) says this:

Not later than 12 months after March 23, 2010, the Secretary shall develop standards for use by a group
health plan and a health insurance issuer offering group or individual health insurance coverage, in compiling and providing to applicants, enrollees, and policyholders or certificate holders a summary of benefits and coverage explanation that accurately describes the benefits and coverage under the applicable plan or coverage.

The ACA’s general disclosure requirement was re-focused and made more specific duirng the Obama and Trump administrations, respectively. President Trump’s 2020 Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First explains:

To make fully informed decisions about their health care, patients must know the price and quality of a good or service in advance.” Yet, as the Executive order then notes, “patients often lack both access to useful price and quality information and the incentives to find low-cost, high-quality care.”

The lack of this information was widely understood to be one of the root problems causing dysfunction within America’s health care system.

dol3The Departments of Labor, HHS, and the Treasury (Departments) thereafter jointly finalized regulations targeting transparency in coverage, designed to help insureds make informed decisions about health care purchases.

From this joint agency work a set of regulations was produced by DOL, HHS and Treasury (IRS) setting out transparency in coverage requirements applicable to ERISA group policies, as well as to insurance policies governed under the ACA exchanges. A detailed explanation of the work involved in producing these regulations published on Nov. 12, 2020 at 85 FR 72158.

An extensive comment period followed, with tremendous pushback by insurance companies, using virtually every legal argument imaginable, from the US Constitution to the Administrative Procedures Act to common law.  But in the end, the agencies pushed ahead to adopt the transparency in coverage requirements, more or less as originally envisioned.

The specific Dept. of Labor regulations that govern group health plans can be referenced here: 

§ 2590.715-2715A3 Transparency in coverage – requirements for public disclosure.

§ 2590.715-2715A2 Transparency in coverage – required disclosures to participants and beneficiaries.

§ 2590.715-2715A1 Transparency in coverage – definitions.

Also see FAQs regarding Transparency in Coverage disclosure requirements.

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