As part of the Consolidated Appropriations Act, 2021 (CAA), all insurance companies and self-funded health plans (except HRAs, ICHRAs and excepted benefits) must provide de-identified prescription drug and health cost reporting to the federal government.
The primary goal of the reporting is for the federal government to identify prescription drug trends and compile the data into a biannual report (without identifying plans or individuals).
The 2023 data reporting will be due June 1, 2024 and plan sponsors (generally, employers) must take action.
When is the RxDC report due? The deadline to submit the reports is June 1, 2024. However, if you want assistance from your carrier/TPA/PBM, the deadline will be earlier and vary across the board.
IMA note: contact your carrier/TPA/PBM to understand what information they need and the deadline for that submission. In prior years, deadlines ranged from mid-March to mid-April.
What action is required of employers administering group health plans?
It largely depends on the carrier and the funding arrangement (i.e. self-insured vs. fully insured). We know that most carriers & TPAs are sending out communication via email in the next two weeks.
For fully insured health plans, most carriers submit the data on behalf of their customers. However, some of the data necessary to report must be provided by the employer. This means carriers are sending out communication to their customers to gather that information with their own deadlines much earlier than June 1.
For self-insured health plans, the steps to take are less clear because the TPAs & PBMs will vary in their approach to assisting their customers.
What happens if I miss the deadline to submit information to my carrier/TPA/PBM?
If the deadline is missed, it’s likely that, as the plan administrator, the employer will have to submit their files required by law. This means the group health plan administrator will need to register with the CMS HIOS system and upload the necessary files required by the government.
IMA note: we don’t want our employers in this position as it creates quite a burden. To avoid having to submit to CMS, employers should respond to the carrier/TPA/PBM request for information by their internal deadline. If you are an IMA client and you haven’t received a request from your carrier/TPA/PBM, please contact your IMA representative.
What information is being requested?
Each vendor is approaching this a bit differently. In general, carriers are requesting the following information to be completed via an online form:
- Group Name
- Group Number
- Average monthly premium paid by members for 2023
- Average monthly premium paid by the employer for 2023
- Form 5500 Plan Number, if applicable
How will this reporting impact group health plans?
While RxDC creates an extra administrative burden for plan sponsors (generally, the employer), the goal of the new reporting is for agencies to gather information that can be used by the federal government. The Agencies plan to use this information to issue public reports on prescription drug pricing costs and trends with the goal of lowering drug costs.
What are next steps for employers?
Plan sponsors with fully insured group health plans should act by the deadline communicated in the carrier communication.
Plan sponsors with self-funded group health plans should connect with their TPA to understand their role in the RxDC reporting. Please work with your TPA closely to ensure proper action is taken to meet the deadline.
For further questions or concerns, please contact your IMA benefits broker. For non-IMA clients, we suggest contacting your current benefits broker.
IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.