Originally posted October 17, 2014 by Stephen Miller on www.shrm.org.
updated 9/19/2014
Self-insured employers should take note of approaching deadlines under a Department of Health and Human Services (HHS) final rule that requires large health plans to obtain health plan identifiers (HPIDs) by Nov. 5, 2014; for small plans, the deadline is Nov. 5, 2015.
An HPID is intended to serves as a unique identifier for health plans involved in transactions subject to the Health Insurance Portability and Accountability Act (HIPAA). HIPAA defines a small health plan as one with annual receipts of $5 million or less.
Employers “are really struggling with the requirements for health plan identifiers,” said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee (ERIC), in a news release. “Regulations issued by HHS were clearly not written with self-insured group health plans in mind.”
Clarification Sought
ERIC recently polled its members, who are large employers that sponsor benefit plans for their workers, and found that the vast majority of these companies had not tried to obtain an HPID as of September 2014. The poll indicated that nearly half of the respondents (45 percent) were still waiting, with hopes that HHS would publish relevant guidance.
For those members who have attempted to obtain an HPID, 100 percent found the process to be “very difficult” or “difficult,” Young said. Common problems included the lack of guidance from HHS regarding the manner in which self-insured plans should calculate the number of plans that need an HPID.
“Many plan sponsors use a single document that includes a variety of different benefit programs and they treat all of the benefit programs as a single plan for reporting purposes under ERISA. It is unclear whether companies would need to treat each type of benefit as a separate [controlling health plan] that needs its own HPID, even if they use a single document and their benefits are treated as a single plan for ERISA purposes,” explained Young.
“It is critical that HHS act quickly to address the deficiencies in the current guidance…given the lack of guidance and difficulties using their system,” she said.
Other Self-Funded Arrangements
“While it is the insurer that is responsible to obtain an HPID on behalf of fully insured health plans, plan sponsors of fully insured health plans should be aware that an HPID may be required for other self-funded arrangements,” cautioned Tripp Vander Wal, an attorney with law firm Miller Johnson, in an online article.
Examples of these self-funded arrangements include health reimbursement arrangements (HRAs) or medical flexible spending accounts (FSAs). “The good news is that HRAs and FSAs are likely to qualify as small health plans and have an additional year to obtain an HPID,” he noted.
Update:
In a subsequently issued set of FAQs, the Centers for Medicaid and Medicare Eligibility stated that neither health FSAs nor HSAs are required to obtain an HPID because they are “individual accounts directed by the consumer to pay health care costs.” In addition, CMS stated that whether an HRA needs an HPID depends on what it reimburses. HRAs that cover only deductibles or out-of-pocket costs do not require HPIDs; however, HRAs that pay for other costs (e.g., health insurance premiums) still need HPIDs.
Commented law firm Alston & Bird LLP in an Advisory Update, “We note that, while this guidance may appear to be welcome news for employers with only fully insured plans and health FSAs or HRAs (whose only potential HPID enumeration responsibility would be because of the health FSA or HRA), it is not consistent with HIPAA’s definition of health plan, under which both health FSAs and HRAs are health plans, as CMS has previously recognized. Employers should be able to rely on CMS’s clear statement in this guidance that FSAs and certain HRAs do not require HPIDs, but we advise caution. Given the inconsistency with previous guidance on FSAs and HRAs and the manner in which CMS has phrased the FAQ, the guidance may not create as broad an exception as it first appears.”