How Does the ‘No Surprises Act’ Affect Students?

Costs and Coverage, Risk Management

by Elizabeth Marks, Senior Strategy Consultant

On December 27, 2020, the No Surprises Act (NSA) was signed into law as part of the Consolidated Appropriations Act of 2021. This act addresses surprise medical billing at the federal level. The regulations generally apply to group health plans and health insurance issuers for plan and policy years beginning on or after January 1, 2022.   The regulations specifically note that Individual health insurance coverage includes coverage offered in the individual market, through or outside of an Exchange, and includes student health insurance coverage. The applicable provisions will go into effect on the 2022-23 plan renewal date.

The key provisions that apply to student health plans include:

Banning of Surprise Medical Bills    

  • Emergency services:  Protects patients from receiving surprise medical bills for emergency services and certain services provided by out-of-network (OON) clinicians at in-network facilities including air ambulances. The NSA requires services to be covered without prior authorization and regardless of whether the provider is in an in-network or out-of-network (OON) facility.
  • Limits on cost sharing: Holds patients liable only for their in-network cost-sharing amount, while giving providers and insurers an opportunity to negotiate reimbursement. For emergency services (and certain non-emergency services) rendered by out-of-network providers at in-network facilities, the patient pays the same cost sharing as they would for in-network. This includes coinsurance, deductibles, and out-of-pocket maximums.
  • Consent for OON charges: Allows providers, in limited cases, to give notice to a patient and obtain consent for OON care and extra costs. However, this exception does not apply if a) there is no in-network provider available, b) the care is urgent, and/or c) the provider is an ancillary provider that a patient does not typically select (such as an anesthesiologist). In addition, the waiver must be received 72 hours before the scheduled services.
  • Notice to Consumers: Providers and facilities must make publicly available, post on a public website, and provide to individuals a one-page notice about the requirements and prohibitions applicable to the provider or facility under the NSA, any applicable state balance billing limitations, or prohibitions, and how to contact appropriate state and federal agencies if someone believes the provider or facility has violated the requirements.

Independent Dispute Resolution (IDR) Process

Insurers and providers will have 30 days to engage in negotiations to try to resolve payment disputes. If negotiations fail, either party may request independent dispute resolution. If no settlement and no request for arbitration, the provider will accept the amount paid by the insurer. There is a specified timeline with specific steps for the IDR process including initial negotiations, selection of independent entity if needed, and submission of payment offers.


Health plans must include on their insurance identification card the amount of in-network and out-of-network deductibles as well as in network and out-of-network out-of-pocket maximums. Health plans must also have up-to-date provider directories available to patients online, or within one business day of an inquiry. If a patient documents that incorrect information was received from an insurer about a provider’s network status prior to a visit, the patient will only be responsible for the in-network copayments and coinsurance.  

This legislation is good news for students, as they are less likely to be “surprised” by a provider claim being paid at a lower rate than expected. Today when this situation occurs, the claim is often re-adjudicated after the fact. This puts the student in a difficult position when the provider sends a late payment notice to the student while the claim is being addressed by the insurer.  It can lead to a negative impact on a student’s credit rating.  An example of how this can occur is a student who is hospitalized at network hospital, has surgery performed by a network provider and has anesthesia given by an independent anesthesiology provider who is not a network provider.  This legislation requires that the anesthesiology bill must be paid as an in-network claim and the student’s cost sharing must be the same as in-network provider.  

Fortunately for students and plan sponsors, health plans and insurers are primarily responsible for complying with the new legislation. Check your health insurance carrier’s website for more information on how the plan will comply.  

Disclaimer: AHP is a broker and plan administrator and is not licensed to give legal advice.