On February 25, 2025, President Trump signed Executive Order 14221 (EO), aimed at enhancing price transparency in healthcare and addressing hidden costs. This order builds upon Executive Order 13877 (2019), which sought to improve price and quality transparency in the U.S. healthcare system. EO 14221 specifically directs the Secretaries of the Treasury, Labor, and Health and Human Services to take all necessary actions to fully implement and enforce the healthcare price transparency regulations established under EO 13877. The Administration believes these regulations have not been fully executed as originally intended and mandates their enforcement within 90 days.
Key Provisions for Employers and Benefits Administrators
There are several key provisions that are particularly relevant to employers and benefits administrators:
- Disclosure of Actual Prices – The order mandates the disclosure of actual prices for healthcare items and services, replacing the previous system of estimates. This change aims to provide employers and employees with a clearer understanding of the true costs of care.
- Standardized Pricing Information – The order calls for standardizing pricing information across hospitals and health plans, making it easier for employers and employees to compare prices and make informed healthcare decisions.
- Enforcement of Price Transparency Requirements – The order emphasizes enforcing existing price transparency regulations. Hospitals and health plans that fail to comply will face penalties.
- Expansion of Price Transparency Requirements – The order directs federal agencies to explore ways to further expand price transparency requirements, potentially including the public disclosure of prescription drug prices.
Next Steps for Employers
Employers and benefits administrators should take proactive steps to ensure compliance with price transparency requirements.
- Review Healthcare Plans and Contracts – Assess existing healthcare plans and contracts to identify gaps in price transparency and ensure they align with the regulations.
- Advance Explanation of Benefits (EOB) Compliance – Ensure plan documents provide participants with good-faith estimates of expected provider charges whenever they schedule a specific healthcare service.
- Enhance Price Comparison Tools – Verify that the plan includes online tools and phone support to help participants compare out-of-pocket costs for various services. These tools should provide cost estimates for in-network providers and facilities based on geographic location and plan year.
- Engage with Insurance Carriers – Collaborate with insurance carriers to confirm compliance with price transparency regulations and understand how they will make pricing information available to employers and employees.
- Educate Employees – Train HR staff on the new transparency rules and establish clear communication strategies to help employees access and understand pricing information.
- Stay Informed – Keep up with regulatory updates and guidance from federal agencies to ensure ongoing compliance with evolving transparency requirements.
HR Works will continue to monitor this topic and provide updates as more information becomes available.
