Sarah Borders, CEBS October 10, 2022 12 min read

Employers: CAA Section 204 Reporting Due December 27, 2022

Section 204 of the Consolidated Appropriations Act (CAA) requires group health plans and issuers to report detailed prescription drug data as well as information related to healthcare spending. The already once-delayed reports for data during the “reference years” of 2020 and 2021 must be submitted directly to CMS by December 27, 2022, and then annually by June 1st thereafter.

To comply with this requirement, employers must rely heavily on vendors, TPAs, and PBMs because these service providers possess the required data. Employer plan sponsors, especially self-funded health plan sponsors, should take the necessary steps now to prepare for the upcoming December 27th deadline.

Which employers must comply? CAA Section 204 applies to ALL group health plans and issuers, including small group plans, grandfathered plans, and non-ERISA governmental plans.

When is the deadline? Required information from the reference years (2020 and 2021 calendar years) must be submitted directly to CMS no later than December 27, 2022. Each year thereafter, reporting for the prior reference year will be due by June 1st.

What data is required? Plans and carriers must submit one plan list (P2 is used for Group Health Plans), eight data files (D1-D8), and a narrative response describing the impact of Rx drug rebates on premiums and cost-sharing. Some of the data is aggregated, but some is plan specific. Most of the information will come from TPAs, PBMs, and other vendors.

How must the information be submitted? Employers or vendors reporting on behalf of plan sponsors must report to CMS online. The submission will be made through the prescription drug data collection RxDC module (Enterprise Portal). The reporting entity will need to establish a HIOS account.

Won’t the PBM, TPA, or carrier handle it on the employer’s behalf? PBMs, TPAs, and carriers each have varying approaches and levels of assistance they will provide to employers. Most fully insured carriers will submit all files for active reference years on behalf of employers. However, for self-insured plans with carved-out prescription drug arrangements, data from several unrelated entities may be required in order to fully provide all of the required data. Some vendors may submit only portions of the reports on behalf of plans, but others may be merely providing the data so that an employer can submit it themselves to CMS.

As a result of the wide array of approaches amongst vendors, employers must confirm with both the medical TPA and prescription benefit manager (PBM) what level of assistance will be offered, and what additional plan information is necessary to report on the employer’s behalf. 

Next steps for employers:

  • Fully insured plans: confirm if the carrier will report all required aggregate data on behalf of the plan sponsor, including any plan-specific information. Obtain any confirmation in writing.
  • Self-insured plans: determine the level of assistance from medical TPA as well as the prescription drug benefit manager (PBM). Likely multiple vendors have the pertinent data and will need to be coordinated.
    • Confirm if a vendor will file on behalf of the employer,
    • Confirm if the vendor will file some information and the plan sponsor will file plan specific-data to CMS, or
    • Confirm if the employer will file all information provided by the various vendors themselves.
    • Coordinate submission strategy (if necessary) and obtain confirmation from various vendors.
  • Employers intending to submit any data directly to CMS will need to apply for a HIOS account as soon as possible (may take several weeks). 
  • Monitor service providers to ensure compliance by the December 27th deadline. Request confirmation that the relevant data was submitted timely to CMS. 
  • Review and revise vendor contacts for future submissions to CMS due each year by June 1st for the previous reference year.

The new CAA Section 204 reporting requirement is particularly challenging for self-funded plan sponsors with multiple TPAs, PBMs, and complex plan designs. Employers sponsoring self-funded plans must identify affected vendors, coordinate various parts of the overall reporting requirement, potentially combine data from multiple vendors, and either submit the report themselves or verify that the reporting was completed by vendors.

There is currently no significant good-faith compliance relief available for plan sponsors, and potential IRS penalties of $100 per participant per day could be assessed for failure to comply.


Sarah Borders, CEBS

Principal, Benefits Compliance Solutions. Sarah has spent the last 15 years in the employee benefits industry, has numerous designations and serves on NAHU’s Employer Working Group Subcommittee and is an active board member of Austin AHU. She recently stepped down as Vice President of Benefits Compliance at one of the nation's largest brokerage firms to start her own compliance consulting practice. Her designations include an active license with the Texas Department of Insurance, CEBS (Certified Employee Benefits Specialist), Certified Health Care Reform Professional, HIPAA certification and Health Care Service Associate. She holds an MBA from Texas A&M Corpus Christi and a BA from University of Incarnate Word. Her consulting firm, Benefits Compliance Solutions, partners with employers to identify unknown risks and avoid hundreds of thousands of dollars in fines and lawsuits from failure to comply with their healthplan obligations.