As summarized in our prior post, on November 23, 2021, the Personnel Management Office, the Internal Revenue Service, the Employee Benefits Security Administration, and the Health and Human Services Department issued interim final rules setting forth directives for implementing a new prescription drug reporting mandate under the 2021 Consolidated Appropriations Act (Public Law 116-260). On June 29, 2022, updated submission instructions describing the reporting process were released. The first deadline to comply with the new rules was December 27, 2022. Under that guidance, it was still unclear whether the relevant departments intended to provide general relief for plans and issuers that made good-faith efforts to comply with the new law.

On December 23, 2022, the Departments of Labor, Health and Human Services, and the Treasury issued FAQs addressing this question directly.

In the FAQs, the relevant departments expressly recognize “the significant operational challenges that plans and issuers may have encountered in complying with these reporting requirements” and acknowledge that “there may be errors or other issues with the first round of data submissions, despite good faith efforts by plans and issuers.” The FAQs confirm that for the 2020 and 2021 data submissions that were due by December 27, 2022, enforcement actions will not be taken with respect to any plan or issuer that uses a good faith, reasonable interpretation of the interim final rules and the updated submission instructions in making its submission.

The FAQs also provide a submission grace period through January 31, 2023, during which time plans and issuers will not be considered to be out of compliance with the new requirements, provided that a good faith submission of 2020 and 2021 data is made on or before January 31, 2023.

Lastly, the FAQs provide several clarifications with respect to the reporting requirements:

  • Multiple submissions by the same reporting entity are allowed;
  • More than one reporting entity may submit on behalf of the same plan or issuer;
  • Certain aggregation restrictions are suspended for 2020 and 2021 data only;
  • Certain group health plans submitting limited data (i.e., only the plan list, premium and life-years data and narrative response) may submit by email rather than HIOS;
  • Reporting on vaccines is optional; and
  • Reporting entities can leave certain fields related to deductibles and out of pocket maximum blank (but should not remove those columns).

If you have questions about potential relief for good faith efforts to comply, or any of the prescription drug pricing reporting requirements, contact a member of Mayer Brown’s Employee Benefits team.