What is the Transparency in Coverage rule and who must comply?

The Transparency in Coverage (TiC) rule (effective July 1, 2022) requires health plans and insurers to publicly post machine-readable files (MRFs) containing in-network negotiated rates, out-of-network allowed amounts, and prescription drug pricing. Both self-funded and fully insured employer health plans must comply. Self-funded employers typically fulfill this requirement through their TPA and PBM, but the employer remains legally responsible.

What are the machine-readable file (MRF) requirements?

Plans must post three machine-readable files: (1) in-network rates file — negotiated rates for all covered items and services with in-network providers, updated monthly; (2) out-of-network allowed amounts file — historical allowed amounts for out-of-network services, updated monthly; and (3) prescription drug pricing file — negotiated rates and historical net prices for prescription drugs (enforcement delayed pending further rulemaking). Files must be publicly accessible without login or registration.

What is the price comparison tool requirement under TiC?

The TiC rule requires plans to provide an internet-based price comparison tool that allows participants to get personalized cost estimates for covered items and services before receiving care. The tool must include cost-sharing information specific to the participant's plan and deductible status. Phase 1 (effective January 1, 2023) covered 500 specified items and services. Phase 2 (effective January 1, 2024) expanded to all covered items and services.

How do self-funded employers comply with the Transparency in Coverage rule?

Self-funded employers comply through their TPA and PBM, who post the required MRFs and provide the price comparison tool. Confirm with your TPA that they are posting MRFs on your behalf and that the files are publicly accessible. Review your TPA contract to ensure TiC compliance is included in the scope of services. The employer remains responsible for compliance even if the TPA fails to post the required files.

What are the penalties for failing to comply with Transparency in Coverage?

Non-compliance with TiC requirements can trigger penalties under ERISA and the ACA. Excise tax penalties under IRC Section 4980D are $100 per day per affected individual for failures to comply with market reform requirements. The DOL can also bring enforcement actions for ERISA violations. CMS has indicated it will use TiC data to identify plans that may be non-compliant with other transparency requirements and refer them for further review.

ACA / CAA — Transparency in Coverage

Transparency in Coverage for Employer Health Plans

The Transparency in Coverage (TiC) final rule requires employer-sponsored health plans to publicly disclose cost-sharing information and negotiated rates. Self-funded plan sponsors bear direct compliance responsibility. Fully-insured plan sponsors rely on their carrier. Non-compliance can result in excise taxes of $100 per day per affected individual.

Machine-readable files (MRFs)

Plans must post three machine-readable files publicly on a website accessible without login or paywall. Files must be updated monthly.

In-network rates fileMonthly

All negotiated rates for covered items and services with in-network providers, including NPI, service code, and negotiated rate.

Out-of-network allowed amounts fileMonthly

Historical payments and billed charges for out-of-network providers for covered items and services.

Prescription drug fileMonthly (enforcement delayed)

Negotiated rates and historical net prices for covered prescription drugs. CMS has delayed enforcement of this file.

Price comparison tool

Plans must provide participants with an internet-based price comparison tool (and a paper version on request) that allows them to compare cost-sharing for covered items and services before receiving care.

Phase 1 (effective 2023): 500 shoppable services specified by CMS must be searchable in the price comparison tool.

Phase 2 (effective 2024): All covered items and services must be searchable in the price comparison tool.

Paper version: Plans must provide a paper version of the price comparison information upon request at no charge.

Personalized estimates: The tool must provide personalized cost-sharing estimates based on the participant's specific plan, deductible, and out-of-pocket maximum.

Self-funded plan sponsor responsibilities

Confirm your TPA is posting MRFs on a publicly accessible website and updating them monthly

Obtain the URL of your plan's MRF posting and verify it is accessible without login

Confirm your TPA or network vendor is providing a compliant price comparison tool

Verify the price comparison tool includes all covered services (Phase 2)

Document your compliance review annually and retain records

Common transparency in coverage mistakes

Not knowing the URL where your plan's MRFs are posted

Assuming the TPA is compliant without verifying the MRF posting

Failing to confirm MRFs are updated monthly (not just posted once)

Not verifying the price comparison tool covers all required services

Overlooking the paper version requirement for participants without internet access

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