Alerts

On February 25, 2025, President Trump signed Executive Order 14221, titled "Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information." In the first Trump administration, the federal agencies issued several rules aimed at increasing healthcare price transparency. The intent was to empower patients with pricing information before seeking care, allowing for more informed decision-making. That effort was later followed by the Health Care Price Transparency Act and reinforced by regulations to support its implementation.

However, the new Order acknowledges that the impact of these regulations has been limited. The Order aims to strengthen transparency by ensuring that up-front pricing information is more accessible to patients. We will continue to monitor developments and provide updates on how this may affect your healthcare plans.

The regulations and the original EO were directed at employers for their compliance. However, employers typically rely on insurers and other plan vendors to comply with the operations of their plans. The compliance with the current rules from those vendors has been spotty. To date, however, the federal agencies have not been asserting compliance penalties from employers.   

The Order requires the departments of the Treasury, Labor and Health and Human Services to enforce the prior Order, and within 90 days of the date of this most recent Order (February 25, 2025), to take action to:

(a) require the disclosure of the actual prices of items and services, not estimates;

(b) issue updated guidance or proposed regulatory action ensuring pricing information is standardized and easily comparable across hospitals and health plans; and

(c) issue guidance or proposed regulatory action updating enforcement policies designed to ensure compliance with the transparent reporting of complete, accurate, and meaningful data.

Key Implications for Employer Health Plans

The Order reinforced the requirements of the first Trump administration’s Executive Order on transparency, which requires employer-sponsored health plans to post their negotiated rates with providers, out-of-network payments, and the actual prices paid for prescription drugs by the plan or its pharmacy benefit manager. Additionally, it requires the establishment of a consumer-facing online tool to allow individuals to access the pricing information.

The information must be publicly available in a searchable online format and updated monthly. For self-funded plans, third-party administrators (TPAs) can post the information on their website if the plan does not have a public-facing website.

Compliance and Enforcement

The Order emphasizes strengthening enforcement measures against non-compliant entities. Employers should ensure their plans meet these transparency requirements to avoid potential penalties.

Action Items for Employers

The transparency requirements are not something employers can manage directly. They rely on their vendors to administer their plans in compliance with the rules. Nevertheless, the mandates are directed at the employers who sponsor the plans. Therefore, employers must be vigilant and take anticipatory steps to ensure compliance. Employers should:

1. Review current health plan transparency practices
2. Confirm with health plan providers that transparency obligations are being met
3. Prepare for potential expansion of transparency rules to include additional healthcare services
4. Monitor for additional guidance from federal agencies on implementation

Conclusion

Executive Order 14221 represents a continued push for healthcare price transparency, with significant implications for employer-sponsored health plans. By promoting clear and accessible pricing information, the Order aims to create a more transparent, competitive, and affordable healthcare system. Employers should stay informed about these developments and work closely with their health plan providers to ensure compliance with the evolving regulatory landscape.

This Legal Update is not intended to be exhaustive, nor should any discussion or opinion be construed as legal advice. Readers should contact legal counsel for legal advice. All rights reserved.