Understanding the No Surprises Act: What It Means for Employer Plans

For years, one of the most frustrating experiences for employees — and one of the most difficult challenges for HR teams — was the “surprise medical bill.”

An employee would go to a hospital in their network, receive treatment from a specialist they assumed was covered, and then weeks later receive an unexpected — often massive — out-of-network bill. These surprise charges created stress, confusion, and resentment toward both the healthcare system and the employer’s plan.

In 2022, the No Surprises Act (NSA) went into effect, introducing long-awaited federal protections to stop this from happening. But for employers who sponsor group health plans, the law also brought new compliance responsibilities, disclosure requirements, and payment processes that continue to evolve.

In 2026, understanding and implementing the No Surprises Act isn’t optional — it’s a legal and ethical obligation.

At Taylor Benefits Insurance Agency, we help employers navigate these changes, ensuring their group health plans remain compliant, cost-efficient, and employee-friendly.

What Is the No Surprises Act?

The No Surprises Act, enacted as part of the Consolidated Appropriations Act of 2021, was designed to protect patients from unexpected medical bills for out-of-network care.

It primarily targets situations where individuals have no control over which provider treats them, such as emergency services or care from an out-of-network provider at an in-network facility.

Before the NSA, these situations often led to balance billing — when an out-of-network provider billed the patient the difference between their charge and what the insurer paid. The results could be financially devastating.

Now, the law shifts the responsibility of payment negotiation away from the patient and onto providers, insurers, and employer-sponsored plans.

What the No Surprises Act Covers

The law applies broadly to both fully insured and self-funded employer health plans, regardless of company size.

Here’s what it covers:

1. Emergency Services

Patients can’t be billed more than the in-network rate for emergency care — even if the provider or facility is out-of-network.

• This includes care in hospital emergency departments, freestanding ERs, and urgent care centers licensed to provide emergency services.

• The law applies regardless of whether the patient was aware of the network status.

2. Non-Emergency Services at In-Network Facilities

If an employee receives care at an in-network hospital but unknowingly gets treated by an out-of-network provider (such as an anesthesiologist, radiologist, or assistant surgeon), they can’t be balance billed.

3. Air Ambulance Services

Air ambulance providers are notorious for excessive out-of-network billing. Under the NSA, patients can’t be balance billed for these services, though ground ambulance protections are still pending.

4. Notice and Consent Exceptions

Out-of-network providers may still bill a patient directly only if they provide advance written notice and obtain the patient’s consent at least 72 hours before treatment. However, this doesn’t apply to emergency services or ancillary care.

The Employer’s Role in Compliance

While the No Surprises Act was designed to protect patients, employers play a critical role in ensuring their group health plans operate in compliance with the law.

Here are the main areas of employer responsibility:

1. Plan Amendments and Contract Updates

Employers must work with their carriers or third-party administrators (TPAs) to ensure plan documents — including Summary Plan Descriptions (SPDs) — reflect the NSA’s requirements.

Contracts with providers, networks, and vendors should clearly define who handles compliance tasks such as disclosures, payment determinations, and dispute resolutions.

2. Dispute Resolution and Payment Process

When a provider and plan disagree on payment for out-of-network services, the dispute enters a “baseball-style” Independent Dispute Resolution (IDR) process.

Employers must:

• Ensure their plan administrators handle IDR submissions correctly.

• Verify that their payment processes align with the “qualifying payment amount” (QPA) — the median in-network rate for similar services.

• Keep documentation to support all payment determinations.

3. Employee Disclosures

The NSA requires that group health plans provide clear, accessible disclosures about patient protections.

Employers must ensure employees know:

• They can’t be balance billed for covered services.

• What out-of-network cost protections exist.

• Whom to contact for help with billing disputes.

These disclosures must appear in plan documents, Explanation of Benefits (EOBs), and on public websites when applicable.

4. Continuity of Care Requirements

If an employee is receiving ongoing treatment from a provider who leaves the network, the plan must allow a transition period (usually 90 days) for continued care at in-network cost-sharing levels.

Key Compliance Deadlines and Ongoing Requirements

While the core provisions of the NSA took effect in 2022, updates continue to roll out through new federal guidance and court rulings.

In 2026, employers must ensure compliance in several areas:

1. Updated IDR Procedures

After multiple legal challenges, the IDR system has been refined to ensure fairness. Employers and TPAs must stay current on revised timelines, documentation requirements, and administrative fees for dispute submissions.

2. Broker and Consultant Fee Disclosures

The NSA also includes transparency provisions requiring brokers and consultants — like those who help employers design benefit plans — to disclose all direct and indirect compensation received from carriers or vendors.

This ensures employers understand the full financial arrangements behind their benefit plans. (Taylor Benefits already provides these disclosures transparently as part of every client relationship.)

3. Advanced Explanation of Benefits (AEOBs)

Another upcoming requirement is the AEOB, which will require plans to give employees a cost estimate before treatment — detailing in-network and out-of-network costs, deductible impacts, and patient responsibility.

Employers should work with their carriers to ensure systems are ready once enforcement begins.

4. Price Comparison and Transparency Tools

Plans must offer online tools that let employees compare costs for at least 500 shoppable services. This transparency aims to help employees make more informed care decisions — and prevent surprise bills altogether.

Penalties for Non-Compliance

Failure to comply with the No Surprises Act can lead to significant financial penalties.

The Department of Labor (DOL), IRS, and HHS share enforcement authority and may impose fines of up to $100 per affected individual per day for violations.

In addition to federal penalties, employers could face lawsuits or reputational damage if employees experience surprise billing under their plan.

To avoid risk, employers must document all compliance efforts — including communications with carriers, updates to plan documents, and employee education campaigns.

How the NSA Affects Employees — and Why It Matters for Employers

From the employee perspective, the No Surprises Act provides peace of mind. It ensures fairness, clarity, and predictability in medical billing — three factors that build trust in employer-sponsored health coverage.

For employers, these protections have direct cultural and operational benefits:

• Improved Employee Experience: Fewer billing disputes mean less stress for employees — and fewer HR escalations.

• Enhanced Trust: Demonstrating compliance shows employees their employer prioritizes fairness and transparency.

• Better Retention: Employees value employers who protect them from financial shocks, improving loyalty and morale.

However, these benefits only exist if compliance is done correctly.

That’s why many employers rely on brokers and consultants — like Taylor Benefits Insurance Agency — to handle regulatory oversight, documentation, and vendor accountability.

Best Practices for Employers in 2026

To stay ahead of NSA requirements and maintain compliance confidence, employers should focus on a few key best practices:

1. Review Plan Language and Network Agreements Annually

Ensure your carrier or TPA has fully incorporated NSA rules into all contracts and SPDs. Language should clearly describe payment processes, employee protections, and dispute resolution mechanisms.

2. Confirm Employee Disclosures Are Accurate and Accessible

Work with HR and communications teams to ensure NSA disclosures appear in every relevant document — enrollment materials, plan summaries, and EOBs.

3. Train HR Staff on NSA Rules

Your HR and benefits team should understand how to respond to employee questions about billing disputes or surprise charges.

4. Monitor IDR and Payment Disputes

Keep records of all claims subject to IDR, payments made, and resolutions. Regular audits ensure compliance and help prevent costly errors.

5. Leverage Your Broker’s Expertise

Partnering with a benefits broker like Taylor Benefits ensures you stay informed about regulatory updates and receive proactive guidance on maintaining compliance.

How Taylor Benefits Helps Employers Navigate the No Surprises Act

At Taylor Benefits Insurance Agency, compliance isn’t an afterthought — it’s a foundation. We work with employers across industries to ensure their health plans align with the latest regulatory requirements, including the No Surprises Act.

Our support includes:

• Plan and Policy Review: Ensuring SPDs, contracts, and network terms are NSA-compliant.

• Employee Education: Providing templates and communication materials explaining protections.

• Vendor Oversight: Evaluating carriers, PBMs, and TPAs for transparency and compliance performance.

• Regulatory Monitoring: Keeping clients updated on changes in federal guidance or IDR processes.

• Audit Support: Assisting with documentation and internal compliance reviews.

By managing the details, we give employers peace of mind — and employees the protection they deserve.

Final Thoughts

The No Surprises Act represents one of the most meaningful steps toward a fairer, more transparent healthcare system. For employers, compliance is about more than avoiding penalties — it’s about delivering on the promise of care and protection that employees expect from their benefits.

By understanding the law’s requirements and partnering with experienced advisors like Taylor Benefits Insurance Agency, employers can ensure their health plans not only comply with federal standards but also embody the values of integrity, transparency, and care.

Because when employees can trust their coverage, they can focus on what really matters — their health, their work, and their future.