Decoding the No Surprises Act: What Advisors Need to Tell Clients About New Federal Guidance

Understanding the No Surprises Act: Why It Matters to Your Business

The No Surprises Act (NSA), which took effect on January 1, 2022, represents one of the most significant healthcare billing reforms in recent years. Yet many small business owners and HR professionals still operate in a fog of confusion about what this law actually requires—and how it affects their organizations.

The reality is straightforward: the NSA protects employees (and their families) from unexpected, out-of-network medical bills. But the mechanics behind it? That’s where things get complicated. As an independent benefits advisor, I’ve spent considerable time translating this regulation for dozens of clients, and I’ve noticed a consistent pattern: employers understand the spirit of the law but struggle with the implementation.

This guide breaks down the No Surprises Act into digestible pieces and explains what your organization needs to do to stay compliant and help your employees navigate this new landscape.

What the No Surprises Act Actually Does

At its core, the NSA protects patients from balance billing—the practice where an out-of-network healthcare provider bills a patient for the difference between what they charge and what an insurance plan will pay.

Here’s a practical example: An employee visits an emergency room at an out-of-network facility. The hospital bills $5,000. The employee’s insurance covers $3,000. Without the NSA, the hospital could bill the employee for the remaining $2,000. With the NSA, that balance billing is prohibited in most cases, and the patient owes only their normal cost-sharing (copay, coinsurance, or deductible).

This protection applies to: - Emergency services - Non-emergency services at out-of-network facilities (when using in-network providers at those facilities) - Air ambulance services - Certain prescription drug situations

Breaking Down Your Compliance Obligations

1. Ensure Your Plan Documents Reflect NSA Requirements

Your health plan documents need to clearly communicate NSA protections to participants. This includes your Summary of Benefits and Coverage (SBC) and plan materials. Many employers rely on carrier templates, which is a reasonable approach, but you should review these documents to ensure they accurately reflect your plan design and explain surprise billing protections in plain language.

Action Step: Request updated plan documents from your insurance carrier or third-party administrator that specifically address NSA compliance. If you’re self-insured, work with your advisor or legal counsel to ensure compliance language is current.

2. Communicate Clearly With Employees

This might be the most underestimated compliance requirement. The NSA doesn’t just apply if employees know about it—they need to understand what protections they have and when those protections kick in.

Effective communication should include: - A simple explanation of what balance billing is and why it’s now prohibited - The specific scenarios where NSA protections apply - What employees should still do if they receive a surprise bill - How to access additional resources

Action Step: Include NSA information in your benefits enrollment materials, employee handbook, and benefits portal. Consider a short FAQ or one-page summary employees can reference.

3. Establish a Process for Handling Surprise Bills

Even with strong preventive measures, surprise bills happen. Your organization should have a clear process for when employees come to you with billing issues.

While the NSA itself doesn’t require employers to handle claims, having a defined escalation process demonstrates good faith and helps employees navigate the system: - Identify a point person (often HR or a designated benefits contact) - Document the issue clearly - Forward relevant information to the health plan or TPA - Follow up to ensure resolution

Action Step: Establish written procedures for handling surprise bill complaints and ensure your HR team knows these steps.

4. Review Network Adequacy

The NSA protects employees from balance billing, but the best strategy is preventing surprise bills altogether. Review your health plan’s network composition, particularly in your region. Are specialists accessible? Are there adequate emergency facilities in-network?

If your plan’s network is sparse in certain areas, consider discussing supplemental network options or point-of-service plan designs with your carrier.

Action Step: Request a network adequacy analysis from your broker or carrier. Identify any geographic gaps and discuss solutions.

Recent Federal Guidance: What’s Changed?

The federal government (through the Department of Labor, IRS, and HHS) has issued multiple guidance documents clarifying NSA requirements, particularly around:

• Interim bills and payment processing: Payers must issue a good-faith estimate to patients before non-emergency services when costs are expected to exceed $1,000
• Patient-provider disputes: New processes allow patients to dispute bills and trigger independent dispute resolution
• Transparency requirements: Plans must disclose out-of-pocket costs before services in many situations

These updates have sharpened what “compliance” actually looks like. It’s no longer enough to simply prohibit balance billing; you need transparent cost estimates and functioning dispute resolution.

Practical Takeaways for Small Business Owners

1. Don’t assume your carrier is handling everything. Many employers believe their insurance company is 100% responsible for NSA compliance. In reality, you share responsibility for clear communication and plan design compliance.

2. Document your efforts. Keep records of your NSA communications, any updates to plan documents, and how you’ve addressed employee questions. This creates a compliance trail if regulators ever ask.

3. Educate, don’t overwhelm. Employees don’t need to understand every detail of the NSA. They need to know: “You’re protected from surprise bills in most situations. If something unexpected happens, here’s who to contact.”

4. Plan for evolution. Regulators continue refining NSA guidance. Stay connected with your benefits advisor or carrier for updates, and plan to refresh employee communications annually.

5. Consider voluntary measures. Beyond minimum legal requirements, some employers implement point-of-service tools (apps that show cost estimates before care) or expanded employee education. These go beyond compliance but can significantly improve employee experience and reduce billing disputes.

Key Questions for Your Benefits Advisor

If you’re reviewing NSA compliance with your team, ask your broker or advisor these questions:

• Are our plan documents currently NSA-compliant?
• What communication materials does our carrier provide, and are they adequate?
• How does our network adequacy compare to local markets?
• What’s our process if an employee receives a surprise bill?
• Are there recent guidance updates we need to address?

The Bottom Line

The No Surprises Act represents genuine progress for healthcare consumers, and compliance is both legally required and ethically sound. The complexity lies not in the concept but in the execution—updating documents, communicating clearly, and handling edge cases when they arise.

As a small business owner or HR professional, you’re not expected to become a healthcare billing expert. But understanding these fundamentals and working with your benefits team to implement them puts you in a strong position for compliance and helps your employees navigate an increasingly complex healthcare system.

---

Nexus Benefit Solutions is an independent employee benefits advisory firm based in West Michigan. Questions? Reach out at jason@nexusbenefitsolutions.com or call 616-425-9740.