By HUB’s EB Compliance Team

Even though employers and group health plans just finalized filing 2020 and 2021 RxDC reports with CMS (reports were due by January 31, 2023), they must quickly shift their attention to the 2022 RxDC reporting. For the 2020 and 2021 calendar reporting years, CMS made several concessions discussed in HUB’s December Alert . However, based on statements made by CMS representatives in recent webcasts and events around RxDC reporting, there will be no concessions granted for the 2022 reporting year.

How will reporting entities file RxDC reports for the 2022 calendar year?

Per CMS, all reporting entities will be required to use the Health Insurance and Oversight System (HIOS) portal to submit one or more reports (P2,D1-D8 and the narrative). CMS has stated that they do not anticipate allowing employers or other reporting entities to file reports via email. As such, employers who have been notified by their TPAs or medical insurance carriers that they must file the one or more reports (P2, D1, the narrative or D3-D8 reports), must register in HIOS to complete their RxDC submissions for the 2022 calendar year. As the registration process in HIOS is time consuming and nuanced, employers required to report should proceed to register in HIOS as soon as possible.

When are the 2022 RxDC reports due?

The 2022 RxDC reports must be filed with CMS no later than June 1, 2023. At this time, CMS has noted that they do not anticipate granting extensions. Therefore, employers that sponsor insured and self-insured/level funded plans, should consult with their medical insurance carrier and/or Third-Party Administrator (TPA) and Prescription Benefits Manager (PBM), if the medical insurance carrier, TPA/PBM will be filing all reports (P2,D1-D8 and the narrative) with CMS on their behalf, or if the employer will required to file one or more of the reports directly with CMS.

Simplified Reporting and Good Faith Reporting Not Expected to Be Available for 2022

CMS has also stated that for the 2022 reporting year, reporting entities will be required to file complete reports (all fields must be filled). For this reason, many insurance carriers and TPAs have requested that employers and plan sponsors provide specific plan information no later than March 1, 2023 (or a similar date). Most carriers and TPAs require employers to report the following:

  • P2 File: Plan name, EIN of Plan Sponsor, Plan Number (if an ERISA Plan)
  • D1 File: Premium and Life-Years. The dollar amount members pay of the total aggregated premiums for medical coverage offered by the carrier or TPA.

Failure to provide the premium information and other plan information by the deadline outlined by the medical insurance carrier, TPA, or PBM, may expose the employers to penalties for failure to file a complete report. Some insurance carriers and/or TPAs have informed employers that they will proceed to file incomplete reports on the employer’s behalf, but are not responsible for the payment of penalties.

CMS has also stated that for 2022 calendar year reports, CMS will only accept one submission per file (D1-D8 and the narrative report). Partial plan year filings by different vendors will not be allowed. Due to this development, employers should work with their insurance carriers and/or TPAs to determine who will be aggregating reports when there were two vendors during the 2022 calendar year (change in TPA or PBM), or when the employer sponsors a non-calendar year plan.

Lastly, CMS reiterated that good faith compliance will not exonerate reporting entities from becoming subject to penalties for 2022 reporting. Therefore, employers must familiarize themselves with the reporting requirements for 2022 and be prepared to file their reports by June 1, 2023, if their insurance carrier or TPA will not assume the reporting responsibilities on their behalf. CMS anticipates issuing new instructions for the 2022 calendar year reporting in early April 2023.

Next Steps

As the 2022 RxDC reporting obligations impact employers of all sizes and funding arrangements (insured and self-insured/level funded plans), employers should consider the following:

  • Determine if their medical insurance carrier, TPA or PBM, will be filing the RxDC reports on their behalf. If the vendor assumes the reporting responsibility, confirm the information the vendor will require to file reports and the deadline the employer must provide that information by.
  • The employer will be required to calculate the dollar amount paid by members vs. the employer for the 2022 calendar year. To calculate this amount, the employer will need to know the total member count for the 2022 calendar year. Note that if the employer sponsors more than one plan with the same insurance carrier or TPA, the amount to report is the aggregate premium paid by members for all plans.
  • If the vendor will not assume some or all the RxDC reporting obligations on the employer’s behalf, the employer should proceed to register in HIOS and gather the information required to submit the requisite reports by June 1, 2023. Alternatively, the employer may choose to contract with a vendor to submit the RxDC reports on their behalf, to forgo going through the registration process in HIOS.

If you have any questions, please contact your HUB Advisor. You can also view more compliance articles in our Compliance Directory.

NOTICE/DISCLAIMER
Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.