Health Plan Transparency | Market Outlook

Over the last few years, several new transparency requirements have gone into effect for employer-sponsored health plans and health insurance issuers. These new transparency requirements are designed to improve the quality of health care and lower costs by making more information accessible to plan participants and the public.

Going into 2025, employers should review their compliance with applicable health plan transparency requirements, including the following:

Self-Service Price Comparison Tool

Health plans and issuers must make an internet-based self-service tool available to plan participants to disclose personalized pricing information for covered items and services, including prescription drugs. Cost estimates must be provided in real time based on cost-sharing information that is accurate at the time of the request. This requirement was originally effective in 2023 for 500 items and services. Beginning in 2025, price comparison information must be available for all covered items and services.

Machine-Readable Files (MRFs)

Health plans and issuers must disclose detailed pricing information in MRFs on a public website. Currently, health plans and issuers must post MRFs regarding in-network-provider negotiated rates and out-of-network allowed amounts. These files must be updated monthly to ensure the information remains accurate. The requirement to post an MRF on covered prescription drugs has been delayed.

Surprise Medical Billing Notices

Health plans and issuers must comply with federal protections against surprise medical billing by limiting out-of-network cost sharing and prohibiting “balance billing” for certain types of health care services. Plans and issuers must post a notice regarding these protections on a public website and include it on each explanation of benefits (EOB) for an item or service to which the protections apply.

In addition, health plans and issuers must report information about prescription drug and health care spending to the federal government by June 1 each year, a process commonly referred to as prescription drug reporting or RxDC reporting. Health plans and issuers must also submit an attestation each year by Dec. 31, stating that their agreements with health care providers, third-party administrators (TPAs) or other service providers do not contain prohibited gag clauses that prevent the sharing of certain health care data.

Most private-sector employers are subject to the Employee Retirement Income Security Act’s (ERISA) fiduciary duty standards when it comes to managing their employee benefit plans. ERISA requires fiduciaries to prudently select and monitor plan service providers.

A new wave of litigation has highlighted the importance of employers’ adherence to their fiduciary duties when managing their group health plans.

While these lawsuits are mainly focused on the management of prescription drug benefits and the selection of pharmacy benefit managers (PBMs), the same fiduciary duties apply to the selection and monitoring of other plan service providers. It has been suggested that the new price transparency disclosures may play a part in increasing the likelihood of group health plan fiduciary lawsuits by giving employees access to information about specific health care costs and spending.

In 2025, employers should watch for guidance from federal agencies regarding the implementation of additional transparency requirements for health plans and possible new transparency legislation. For example, employers should watch for regulatory guidance on advanced EOBs, which is a key transparency requirement that has not taken effect yet but federal agencies are working to implement in stages. When this requirement takes effect, health plans and issuers will need to send an EOB to covered individuals explaining the estimated cost of an item or service, including the individual’s estimated cost sharing, before a scheduled service. Once this transparency requirement is fully implemented, employers should encourage employees to use it to become better health care consumers and help control health plan spending.

Employers should work with their service providers to post MRFs for prescription drugs once federal regulators provide more information. Also, employers should work with their issuers, TPAs and other service providers to ensure timely submission of the RxDC report and gag clause attestation in 2025.

In addition, employers should monitor legal developments related to increasing transparency for PBMs. Prescription drug benefits—one of the most utilized and costly elements of an employer’s health plan—are typically administered by a PBM. Although PBMs have been criticized for their lack of transparency and inflated costs, they are subject to minimal federal oversight. Recently, there has been bipartisan support in Congress for reforming the PBM industry, including requiring PBMs to disclose information regarding their compensation, drug spending and rebate use to plan fiduciaries. Given the current lack of federal oversight, many states have enacted their own laws to regulate PBMs and increase transparency; however, the enforceability of these state laws remains unclear due to ongoing litigation. In 2025, employers should monitor federal and state regulation of PBMs and the potential impact on their health plans as this area of the law continues to evolve.

Contact us to speak to an SSG Advisor about benchmarking your benefits plan.