As employer-sponsored health plans navigate an increasingly complex regulatory landscape, the dual pressures of cost control and compliance have never been more pronounced. 

The Consolidated Appropriations Act of 2021 (CAA) and the Employee Retirement Income Security Act (ERISA) impose stringent transparency, cost-sharing, and fiduciary obligations on health plans. Innovative solutions, such as medical travel benefits to access Global Centers of Excellence (CoE), offer a compelling pathway to address these challenges while delivering high-quality care and significant cost savings.

Medical travel benefits for employer-sponsored health plans provide a compelling case study. By creating a vetted network of high-quality non-US healthcare providers and pharmacies, these programs address key compliance requirements while enhancing the value proposition of health plans. Below, we explore how these benefits align with ERISA and CAA obligations.

Transparency Obligations Under the CAA

The CAA’s Transparency in Coverage rule requires group health plans to disclose provider-specific cost and quality information, both to the public and to plan participants. This includes negotiated rates for in-network providers and historical out-of-network billing charges, as well as prescription drug costs. The intent is to create a competitive marketplace that drives down costs through informed consumer choice.
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A medical travel benefit program with a vetted network of non-US providers directly supports these transparency goals. Such programs can negotiate transparent and fixed pricing for specific procedures, ensuring that costs are predictable and easily interrogated. By integrating this information into a health plan’s required public disclosures and participant tools, the benefit aligns with compliance requirements while offering cost-effective care options that broaden the competitive landscape.

When pricing is predictable and transparent, both the employer and employee are better able to calculate savings. For example, medical travel benefits can result in treatment costs that are 50% to 70% lower than benchmark rates and can result in savings of >$2M per 10,000 employees, despite being of higher quality. In contrast, carrier costs and savings have traditionally been very difficult to ascertain, as carriers’ negotiated rates are almost always kept secret.

Pharmacy and Prescription Drug Cost Reporting

Under the CAA, health plans must report detailed information on prescription drug spending, including the most dispensed, most costly, and drugs with the largest price increases. These requirements aim to increase transparency and address the rising costs of prescription medications.

By incorporating international pharmacies into a medical travel benefit, employers can significantly reduce prescription drug costs for their participants. Prescription medications procured through these pharmacies often cost a fraction of their US counterparts. A well-designed and implemented program will also have the ability to provide detailed, aggregated data on drug pricing and utilization that can help employers meet their reporting obligations under the CAA.  Furthermore, benchmarking this data against US market trends can provide valuable insights for plan administrators and participants.

Balance Billing and Surprise Billing Protections

The No Surprises Act, a part of the CAA, prohibits balance billing for emergency services, certain out-of-network care at in-network facilities, and air ambulance services. It also limits out-of-pocket costs for participants to in-network levels in these scenarios. These protections aim to shield participants from unexpected medical bills, a major source of financial stress.

A medical travel benefit can eliminate balance billing risks by providing participants access to a controlled network of non-US providers with pre-negotiated rates. By ensuring that all care within the program is delivered at predictable prices, and with no member out-of-pocket costs, the benefit effectively prevents surprise billing scenarios. Additionally, participants are informed of costs upfront, fostering transparency and compliance with the CAA’s notice and consent requirements for out-of-network care.

For employers with well-established medical travel programs to Global Centers of Excellence, employees not only experience no balance billing but also no out-of-pocket costs. For example, a medical travel program at HSM resulted in more than $2.7M in employee savings from waived out-of-pocket costs over a >10 year period. 

Case Study: HSM Solutions Unlocks $20M+ in Healthcare Savings with Global Centers of Excellence

Price Comparison Tools

The CAA requires group health plans to develop online tools that allow participants to compare cost-sharing amounts for medical services across providers. These tools are intended to empower participants to make cost-conscious decisions about their care.

A medical travel benefit aligns seamlessly with this requirement. By surfacing pricing information for non-US providers into plan-sponsored materials or tools, employers can offer participants a clear view of their options. These tools can highlight the significant cost savings available through the medical travel program, further incentivizing its use.

ERISA Fiduciary Duties

Under ERISA, plan fiduciaries must act in the best interests of participants and beneficiaries. This includes ensuring that plan assets are used efficiently and that participants receive clear, accurate information about their benefits.

Medical travel benefits offer a unique opportunity for fiduciaries to align with these responsibilities. By negotiating pre-determined rates with high-quality, vetted non-US providers, these programs help ensure prudent use of plan assets. Lower costs for medical procedures and prescription drugs can translate into reduced premiums or expanded coverage options for participants, thus supporting fiduciaries in maximizing the value delivered by the plan.

Transparency is another cornerstone of fiduciary responsibility under ERISA. Medical travel programs inherently foster transparency by providing detailed, upfront information on costs, care quality, and provider credentials. Participants benefit from informed decision-making, which enhances their trust and engagement with the plan.

To comply with ERISA’s fiduciary standards, plan sponsors should adopt a systematic approach to evaluating medical travel programs. This includes performing due diligence on provider networks, assessing the quality and safety of care, and conducting cost-benefit analyses. Fiduciaries must also document these evaluations comprehensively to demonstrate prudent decision-making, as outlined in ERISA’s procedural prudence requirements.

Moreover, these programs can serve as a strategic tool for addressing broader plan objectives, such as mitigating financial risks associated with high-cost claims. By incorporating medical travel benefits, fiduciaries can meet their obligations while enhancing the plan’s overall value proposition for participants.

Medical Travel Benefits: A Strategic Path to Compliance, Cost Savings, and Market Leadership

Medical travel benefits represent a strategic solution for employer-sponsored health plans seeking to navigate the complex requirements of the CAA and ERISA. By addressing transparency, cost-sharing, and fiduciary obligations, these programs enhance compliance while delivering tangible value to participants, including improved clinical outcomes such as markedly lower readmission rates. Employers that adopt such innovative benefits position themselves as leaders in the pursuit of cost-effective, high-quality healthcare—a critical advantage in today’s competitive landscape.

Health plan executives and advisors should view medical travel benefits not only as a compliance tool but as a pathway to achieving broader organizational goals, including cost containment, employee satisfaction, and market differentiation.