As in prior years, most carriers/third-party administrators (TPAs), in partnership with pharmacy benefit managers (PBMs), will submit required RxDC reporting for their group health plan clients since they have the detailed prescription drug claims data. However, carriers/TPAs do not know how much employees paid vs. how much the employer paid for the prior calendar year's health coverage. So, they must ask the employer for that information each year. Employers should be vigilant for the questionnaire and respond promptly to meet the carrier/TPA's deadline.
Who this applies to:
All size employers sponsoring a group medical plan and prescription drug benefit that is not an Individual Coverage Health Reimbursement Arrangement (ICHRA).
Key details:
To comply with the RxDC reporting requirement, employers must rely heavily on their claims administrators because these service providers possess the detailed claims data. Typically, the claims administrator or carrier facilitates the full reporting but requests key information from the employer about three months before the June 1st annual deadline. The carrier/TPA primarily needs to know how much the employer paid vs. how much participants paid (including COBRA participants) for the previous calendar year’s medical/Rx coverage (even if the plan does not operate on a calendar year).
If self-funded, the premium “equivalent” for the reporting requirement is actual fixed costs plus actual claims. Choose either incurred claims or paid claims for the calendar year (stick with that choice every year), less stop-loss rebates and pharmacy rebates retained by the plan.
Any gaps in submissions should be addressed by either the employer submitting the missing data themselves via the government’s HIOS system or by engaging a third-party vendor to assist with coordinating submissions.
Employer plan sponsors, especially self-funded health plan sponsors, should continue to take necessary steps to prepare for the June 1st deadline. Find helpful information on CMS’s RxDC webpage.
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