by Bonita Hatchett-Bodle
Employer-based health plans must now submit information about prescription drugs and health care spending to the Department of Labor, Treasury, and Health and Human Services. This data submission is called the RxDC report and applies to all fully-insured and self-funded group health plans, whether or not subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA), and to non-federal governmental plans. Health reimbursement arrangements or other account-based plans are exempt. The data submission requirements are reflected in Section 9825 of the Internal Revenue Code of 1986, as amended (the “Code”), Section 725 of ERISA and Section 2799A-10 of the Public Health Service Act, and the regulations issued thereunder.
The reporting requirement was delayed for one year from its original December 27, 2021, effective date. Accordingly, the first reporting deadline is December 27, 2022, and must contain the required data for calendar years 2020 and 2021. Information is required to be reported with respect to the “reference year,” which means the calendar year immediately preceding the calendar year in which data submissions are required. For 2022 and later years, the filing deadline will be June 1 of the following year. Accordingly, the report for the 2022 reference year would be due by June 1, 2023.
The report must include the following information for each plan or coverage, at the plan or coverage level:
Identifying information for plans, issuers, plan sponsors, and any other reporting entities
The beginning and end dates of the plan year that ended on or before the last day of the reference year
The number of participants and beneficiaries, as applicable, covered on the last day of the reference year
The states in which the plan or coverage is offered
The top fifty (50) most frequently dispensed brand prescription drugs and the total of paid claims for each drug
The top fifty (50) costliest prescription drugs by total annual spending and the annual amount spent for each drug
The top fifty (50) prescription drugs with the greatest increase in expenditure compared to the previous year and the change in the amount spent on each drug
Total annual spending on health care services by the plan or coverage and by participants and beneficiaries, as applicable, broken down by the type of costs
Prescription drug spending and utilization
Premium amounts, including the average monthly premium amount paid by employers, participants, and beneficiaries
Prescription drug rebates, fees, and other remuneration
The method used to allocate prescription drug rebates, fees, and other remuneration, if applicable, and
The impact of prescription drug rebates, fees, and other remuneration on premium and cost-sharing amounts.
Delegation of Reporting Obligation
Group health plans may enter into a written agreement under which a third party satisfies the reporting obligation, such as health insurance issuers, pharmacy benefit managers, and third-party administrators. Plan sponsors are encouraged to urgently implement an RxDC reporting strategy in preparation for the upcoming deadline.
The Internal Revenue Service may impose an excise tax of $100 per day per affected individual under Section 4980D of the Code for any failure to comply with the reporting requirement. The Department of Labor and plan participants and beneficiaries may enforce compliance with these rules for ERISA-covered health plans. Plans not subject to ERISA may be subject to enforcement by the U.S. Department of Health and Human Services.