Transparency in Coverage Rules Act (TICRA): A 3-month plan

2010

Instagram was founded.  Apple iPad was launched. The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law.

On March 23, 2010, President Barack Obama signs the Patient Protection and Affordable Care Act into law, aiming to insure 95% of Americans.

For those in the benefits industry, this time probably brings back all kinds of emotions.

Did you feel it was doom and gloom?  A blessing?  An “oh my gosh – we are out of work” moment?  Or maybe a combination of these things.  In March 2010, did we feel prepared to help our employer clients and community to get educated,  and begin to develop an action plan about how to comply with the ACA?

2020

A global pandemic. On October 29, 2020, The Transparency in Coverage Final Act Final Rule (TICRA) was issued.

2021.

Some expect TICRA to have an impact on our industry similar to that of the ACA, and I tend to agree!

Before we started discussing a 3-month plan that will help brokerages shine, it’s important to share some history and highlights about the TICRA.

The Transparency in Coverage Rules Act (TICRA) history and highlights

On June 24, 2019, President Trump issued Executive Order 13877, which called for “Improving Price and Quality Transparency in American Healthcare to Put Patients First.”  On October 29, 2020, the Department of Health & Human Services, Department of Labor, and Treasury Department collectively issued proposed and final rules on “Transparency in Coverage.”

The Final Rules will require most employer-sponsored group health plans (the carrier for fully insured plans, the employer for self-funded plans) to disclose the price and cost-sharing information to its plan participants upon request before services are provided. The proposed rule was issued alongside a new Final Rule that will require hospitals to provide patients with information about the hospital’s “standard charges.”

The Final Rule will apply on a phased-in basis, with requirements over the period between January 1, 2022, and plan years beginning on or after January 1, 2024. In the most simplistic view, the requirements will be broken down as follows:

• 2022: Issuer/Plan Data Files required to be released to the public.
• 2023: Website self-service tool for 500 shoppable services due to be available to the public.
• 2024: Website – all services required to be completed.

 Did this list miss something important?

Yes.  One of the most important provisions from the 5,593-page measure is that after December 27, 2021, that all brokers, brokerages, consultants, etc. are required to start disclosing all forms of compensation, direct or indirect, to employer clients, regardless of group size.

We all have choices in life.  With this opportunity, you can choose to “love it”, or “list it.”  OK, I know this isn’t an HGTV show!  You can embrace this time, or not. But it don’t,  it could be at your peril.

Where to start?

 You need to start with a well-designed plan.  History has taught us that you can do this if you have the end in mind.  Earlier, we referenced that in 2010, Instagram was launched to solely focus on communication through images (their end).  In this case, and just like the ACA, we need to focus on our employer clients and their end, or how government entities will view or define the employers’ role in TICRA.

In most industry experts’ views, you can boil down the employer’s role in the implementation of TICRA as that of expanded fiduciary duties.

 What is a fiduciary?

“A fiduciary is a person or organization that acts on behalf of another person or persons, putting their clients’ interest ahead of their own, with a duty to preserve good faith and trust. Being a fiduciary thus requires being bound both legally and ethically to act in the other’s best interests.”

In the case of an employer who is a fiduciary, you would replace the word “clients” with “employee.”

An employers action plan for their expanded fiduciary duties

Because employers have already experienced a major change in the health insurance marketplace due to the ACA, we have a playbook of routine steps employers can take for a smoother implementation of TICRA.

1. Get educated.
2. Determine how this will impact them.
3. Build a timeline based on when rules are phased in.
4. Determine who is responsible for what action.

If an employer outsources any of these services (which they will most likely do), there is an additional step that they must take.  A plan fiduciary must perform adequate due diligence and should consider the vendor’s experience, performance history, and fees. And each step should be documented.

The DOL’s booklet, “Understanding Your Fiduciary Responsibilities under a Group Health Plan,” provides a summary of the actions plan fiduciaries should take when choosing a service provider.

There are five things employers will need.  Where does a broker start? 

Start with the end — your client’s end.  Employers need the five items above, so begin by finding, partnering, or developing an employer presentation to discuss this legislation.  There are many presentations already prepared, so check in with your local Health Underwriters chapters, a TPA, general agent,  or ERISA attorney partner.  You do not need to start from scratch.  With this education in hand, you will have a plan to communicate all the items in steps 1-4.

What about step 5, which has two parts?

• Employers increased fiduciary responsibility.
• Brokers will need to start providing compensation details beginning with renewals starting after December 27, 2021.

Please note the details. This is the time to get prepared for what we already know, which is broker compensation disclosure will be starting on renewals after December 27, 2021. And you will need the data.

Comfortable or uncomfortable conversations?

In life and business, we have choices to make.  Most of us would prefer to have a comfortable conversation instead of an uncomfortable one.

When you think about having the compensation conversation, you can probably envision clients where it will be very ho-hum.

You can also envision conversations where it will be much more complicated.

Think about your competitors, make a list of services and a chart of checkboxes detailing how how you believe you measure up or areas of improvement you may need to consider.

This same conversation could be happening with your competitors, and could result in you getting that dreaded broker change notice.  You have a choice to make..

A guide for the comfortable conversation

A broker’s “end”, in this case, is to show that you are the best broker, brokerage, or consultant on the face of the planet.  You’re organized, you understand the industry, and you are helping your employer clients navigate TICRA, their insurance placement, and even non-insurance solutions.

You need to be able to discuss and ready to implement some “non-insurance” solutions for your employers.  Think of things like processing of eligibility, ways to improve employee education, timely industry updates, and yes, communication about TICRA.

Start by assessing your “non-insurance solutions” within the next 30 days:

• Assess your services and see how they match up against your competitors. Here a few items that almost every employer now expects.

• Customized employee benefit booklets in PDF or printed format. Why?  Your employers want to make a great first impression on new hires. This is a best practice for employers of choice.
• ERISA compliance. Why?  Because it is the law for any employer when offering a health plan regardless of group size.
• Employee advocacy service (customer service). It’s important that the employee can call your office instead of calling the carrier.

How and what should you present in this comfortable conversation?

Client relationship experts believe one of the most underutilized is a stewardship report.

What is the best practice of what to include in a stewardship report?

• Overview of the purpose of the report.
• Outline of the team supporting the client.
• Review of the services you provide as an agency.
• Outline and details of the projects and tasks that you have completed for them, including a renewal checklist.
• Summary and details of the education and communications you have provided.
• Detail of the “service items” you have resolved for them.
• And, of course, you now need to include your compensation.

Where to start?

Like all good plans, start with the end. Let’s keep this simple.

Step 1:  Get your employer presentation together. This will knock out steps 1-4 on your client’s end.

• Do not start from scratch.
• Find a solution that someone else in your network has already created or started.
• Assign someone on your team to schedule group or one-on-one presentations with your clients.

Step 2:  Assess your non-insurance solutions, and search for solutions to:

• Improve employee and new hire communication through customized benefit books. Great first impression?
• ERISA compliance. If ERISA compliance is an employer’s responsibility, then typically an employer expects their broker to provide a solution and be responsible for it.  Brokers counsel on ACA compliance and POP documents, so why not ERISA?  Strengthen your relationships and help justify the compensation you will now need to disclose.  Get ready for the comfortable conversation.
• Start capturing your client service issues in one solution through industry-specific agency management solution (AMS). This can be done very simply through a “helpdesk” solution.

Step 3:  Start capturing the data necessary to produce stewardship reports for all your clients.

• Capture commission received in a way that you can easily summarize at the end of 2021. If you do not have a solution in place, there are many software solutions available.  Implement one of them and make sure you keep your “end” in mind.
• Start capturing the steps you take to renew your client’s benefits and to summarzie the projects you do for them. The important part here is to show you are organized and have a process you follow to maximize the results for your clients.  Be prepared to communicate these important milestones.
• If you feel that providing a stewardship report is important to help you with the upcoming compensation conversation, start exploring solutions to provide to your clients/ Find a solution that can capture the data and produce these reports efficiently.

It’s once again time for  brokers to shine!

Tom Avery is the founder and CEO of Signal Sync, an insurance agency automation solution designed for the independent agency.