Posted May 28, 2014 by PHaynes
10/31/2014 CMS Update and Delay: “Effective October 31, 2014, the Centers for Medicare & Medicaid Services (CMS) Office of e-Health Standards and Services (OESS), the division of the Department of Health & Human Services (HHS) that is responsible for enforcement of compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) standard transactions, code sets, unique identifiers and operating rules, announces a delay, until further notice, in enforcement of 45 CFR 162, Subpart E, the regulations pertaining to health plan enumeration and use of the Health Plan Identifier (HPID) in HIPAA transactions adopted in the HPID final rule (CMS-0040-F). This enforcement delay applies to all HIPAA covered entities, including healthcare providers, health plans, and healthcare clearinghouses.” CMS: delay-link here.
10/17/2014 Update: With just a few weeks to go before the November 5th deadline for large health plans ($5M and up in claims) to obtain their HPID (Health Plan Identifier), CMS has simplified the application process by eliminating the step requiring approval by a company executive. As background, HPIDs are mandatory for controlling health plans (CHPs), which generally are health plans that control their own business activities or are controlled by an entity that is not a health plan, and optional for SubHealth Plans (SHPs), which generally are health plans whose business activities are directed by a CHP (Controlling Health Plans). The HPID application process takes place via HIOS (the online Health Insurance Oversight System), as explained in FAQ guidance and the new-and-improved quick reference guide; the guide and a related user manual have been revised to reflect the simplified process.
Note: Under the previous process, an “authorizing official,” defined as an individual with the authority to legally bind the applicant (such as a CEO, CFO, VP of HR, etc.), was required to review and approve an entity’s pending application before the HPID could be issued. The revised process eliminates required approval by an authorizing official. NOW, any representative of the health plan can submit the application, and the next step is system approval and assignment of the HPID. Authorizing officials may continue to use the system to search applications (for the official’s own entity) and to view audit history.
By eliminating the need for “formal approval” by a senior company executive/officer is shows that the issues with their “process” are known to CMS and that there’s at least some willingness to simplify the process. However, please don’t take this simplification as an excuse to procrastinate—clients are reporting 5-7 days of action required to complete this task.
09/30/2014 Updated links at the bottom of this post and CMS quick reference guide here (link removed) – new link to Quick Ref. Guide Ver 2 is here.
PPACA (the Patient Protection and Affordable Care Act) and HIPAA require that self-insured health plans obtain and use a 10-digit health plan identifier (“HPID”) in certain transactions. With some exceptions, health plans must also provide certification to HHS of compliance with the standards and operating rules. The goal of requiring HPIDs is to reduce administrative costs by adopting a set of operating rules for each covered transaction to simplify the routing, review and payment of electronic transactions and reduce errors and manual intervention.
Below you will find additional information regarding HPIDs. But, before you read on, you should decide if and when this applies to you.
Obtaining the HPID
- Large self-funded health plans (more than $5 million in annual claim receipts) must obtain an HPID by November 5, 2014.
- Small self-funded health plans ($5 million or less in annual claim receipts) must obtain an HPID by November 5, 2015.
- Fully Insured plans – you carrier will obtain an HPID.
- CMS/HHS advises that “full implementation – Date for using HPID in Standard Transactions” will be November 7, 2016 for all groups.
Who is Responsible for Obtaining an HPID?
For self-insured health plans, employers will obtain an HPID. It should be noted that TPAs (Third-Party Administrators) will not obtain the HPID. For fully insured plans, HPIDs will be obtained by carriers on the plan’s behalf.
Specifically, a controlling health plan (“CHP”) must obtain a number for itself. A CHP is a health plan that controls its own business activities, actions or policies, or is controlled by an entity that is not a health plan. A subhealth plan (“SHP”) is eligible, but not required, to get an HPID. An SHP is a health plan whose business activities, actions or policies are directed by a CHP. To determine whether an SHP should get an HPID, the CHP and/or the SHP should consider whether the SHP needs to be identified in the standard transactions. A CHP may get an HPID for its SHP or may direct an SHP to get an HPID.
This language is confusing for employers who generally do not administer their own health plans. It appears that any health-related plan (see below) would be a CHP. It is possible that certain health plans, for example, dental plans, could be considered to be SHPs where they are seen to be directed by the major medical plan or where affiliated employers have plans directed by a parent company’s plans. In addition, to the extent certain coverages are wrapped under one plan, these health-related plans might be viewed as SHPs rather than CHPs.
Employers with self-insured plans should consult legal counsel if they have questions about whether or not their plans might be CHPs or SHPs.
Who do the Rules Apply to?
The rules apply to “health plans” that perform “covered transactions” electronically between two “covered entities.” “Health plans” include all health-related plans subject to the HIPAA Privacy Rule, including medical plans. However, “health plans” do not include:
- Plans that are self-administered with less than 50 participants;
- Coverage only for accident, or disability income insurance, or any combination thereof;
- Workers’ compensation or similar insurance; and
- Coverage for on-site medical clinics.
“Covered transactions” include claims and encounters, payment and remittance advice, claims status request and response, eligibility and benefit inquiry and response, benefit enrollment and disenrollment, referrals and authorizations, and premium payment. These are activities typically performed by a TPA on behalf of a plan.
“Covered entity” is a health plan, a health care clearinghouse, or a health care provider.
Further guidance is needed to clarify application of the HPID requirement to non-major medical plans. At this time, there is no exception for dental or vision plans. It is possible that HCFSAs (Health Care FSAs) and HRAs will not be considered to conduct transactions between two covered entities, so they would be exempt.
Using the HPID
All health plans, regardless of size, must begin using the HPID to identify the health plan in a standard transaction beginning November 7, 2016. If the employer/plan uses a business associate (for example, a TPA) to conduct standard transactions on its behalf, the employer must require its business associate to use an HPID to identify a health plan in all covered transactions. Including this requirement in the service agreement is recommended.
Certification of Compliance
Under a proposed rule, CHPs that obtained an HPID before January 1, 2015 (generally large health plans) must, by December 31, 2015, provide certification to HHS of compliance with the standards and operating rules by showing that the plan conducted its covered transactions in compliance with the applicable regulations. A plan that obtained an HPID after January 1, 2015 (but before December 31, 2016) has 365 days from the date that number was obtained to satisfy the certification and testing requirement. This requirement will generally include documenting the number of covered lives in the CHP and certifying compliance with appropriate credentials. These rules are in proposed format and final guidance is expected to further clarify the certification requirement.
How do you Obtain an HPID?
To obtain an HPID an employer must access the Health Plan and Other Entity Enumeration System (“HPOES”). HPOES is housed within CMS’s Health Insurance Oversight System (“HIOS”). HIOS is integrated with the CMS Enterprise portal and users can access at https://portal.cms.gov/.
Employers must then:
- Register to access the Enterprise Portal (they will ask personal information to identify the human being that is registering).
- After you have a USER-ID and Password, then you login again in order to navigate to the HIOS website.
- There are 6 steps to the rest of the HPID process. CMS has an excellent video that will guide you through this process. http://youtu.be/o39nzyOlkpc (The video title is called Learn how a Controlling Health Plan can obtain a Health Plan Identifier!).
Enter the following information when prompted:
- Company Legal Name
- Federal Employer Identification Number
- National Association of Insurance Commissioners (“NAIC”) number or Payer Identification number used in standard transactions (the plan’s TPA may be able to provide this number)
- Incorporated State
- Domiciliary Address
- Authorizing Official Contact Information and Title
- Once you’ve entered that information, please click the “Apply for HPID” button.
- Await email confirmation of an approved application.
- Provide the number to you TPA.
Is there a Penalty for Noncompliance?
Proposed regulations only impose a penalty with respect to a “major medical policy” which is defined as an insurance policy that covers accident and sickness and provides outpatient, hospital, medical and surgical expense coverage. It is unclear whether there is a penalty for noncompliance with respect to self-insured plans.
Assuming the penalty does apply, a self-insured health plan may be assessed a penalty if it fails to meet the certification and documentation requirements. HHS will assess a penalty based on each covered life of the CHP (including its SHPs) beginning at $1 per covered life per day, up to certain maximums, until the certification is complete. A plan that knowingly provides inaccurate or incomplete information in a statement of certification or documentation of compliance will pay a higher penalty subject to an overall limit. The amount of the penalty is subject to increase, based on the percentage of annual national health care expenditures, as determined by HHS.
HHS is required to conduct periodic audits to ensure that health plans (including third parties that it contracts with) are in compliance with any applicable standards and operating rules.
Because all CHPs are required to obtain an HPID, HHS will be able to compare a roster of the CHPs that have certified compliance with the First Certification Transactions with a roster of CHPs that have obtained HPIDs to identify CHPs that may be subject to penalties. The proposed regulations detail an administrative process for HHS to assess, and for CHPs to contest, penalties.
What Should Employers Do?
Employers should identify all self-insured health-related plans. Employers may want to consider waiting for additional guidance regarding the application to plans other than the major medical plan (e.g., dental and vision plans) prior to obtaining an HPID (but wait no later than the effective date). Employers with large self-insured health plans (plans with annual Medical/Rx claims in excess of $5M) should obtain an HPID no later than November 5, 2014; employers with small self-insured health plans (plans with less than $5M in claims) should obtain an HPID no later than November 5, 2015.
Regarding certification requirements, employers should wait for further guidance and begin discussions with TPAs to ensure compliance by December 31, 2015 (although small plans must comply within 365 days of receiving an HPID). Employers should update service agreements with TPAs to require inclusion of HPIDs in standard transactions no later than November 7, 2016.
- CMS/HHS Youtube _ how to register
- CMS/HHS FAQ, Supporting materials (PDFs), Handouts, etc.
- CMS FAQ – HPID Search (Updated 09/30/2014)
- CMS Quick Reference Guide (Updated 09/30/2014)
Posted May 28, 2014 by ABlume
The annual bswift Benefits Study identifies trends and provides insight into how organizations are using wellness initiatives, consumerism and technology to shift responsibility for benefits decision-making and management from employer to employee. Click here to review this informative study.
Posted May 26, 2014 by ABlume
Q1. What are the consequences to the employer if the employer does not establish a health insurance plan for its own employees, but reimburses those employees for premiums they pay for health insurance (either through a qualified health plan in the Marketplace or outside the Marketplace)?
Under IRS Notice 2013-54, such arrangements are described as employer payment plans. An employer payment plan, as the term is used in this notice, generally does not include an arrangement under which an employee may have an after-tax amount applied toward health coverage or take that amount in cash compensation. As explained in Notice 2013-54, these employer payment plans are considered to be group health plans subject to the market reforms, including the prohibition on annual limits for essential health benefits and the requirement to provide certain preventive care without cost sharing. Notice 2013-54 clarifies that such arrangements cannot be integrated with individual policies to satisfy the market reforms. Consequently, such an arrangement fails to satisfy the market reforms and may be subject to a $100/day excise tax per applicable employee (which is $36,500 per year, per employee) under section 4980D of the Internal Revenue Code.
Q2. Where can I get more information?
On Sept. 13, 2013, the IRS issued Notice 2013-54, which explains how the Affordable Care Act’s market reforms apply to certain types of group health plans, including health reimbursement arrangements (HRAs), health flexible spending arrangements (health FSAs) and certain other employer healthcare arrangements, including arrangements under which an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy. DOL has issued a notice in substantially identical form to Notice 2013-54, DOL Technical Release 2013-03, and HHS will shortly issue guidance to reflect that it concurs with Notice 2013-54. On Jan. 24, 2013, DOL and HHS issued FAQs that addressed the application of the Affordable Care Act to HRAs.
Posted May 22, 2014 by ABlume
Join attorney Patrick Haynes for this complimentary HRCI pre-approved webinar, as we discuss the increased DOL/IRS activity relating to Welfare Plan Audits. Attorney Haynes will review the audit process, help you mitigate the likelihood of an audit, and help you plan for an effective response in the event you face a DOL/IRS audit. In 2013, the DOL’s Employee Benefits Security Administration handled more than 200,000 employee complaints. These complaints centered around eligibility, communication (SPD’s/SAR’s), claims issues, etc. In anticipation of this, the DOL and the IRS hired and trained over 700 employees to conduct such audits. This has resulted in an increased likelihood of audits. Crawford Advisors has navigated through two of these audits with our clients in the past 60 days. Topics include:
* Key ERISA-required documents typically requested by DOL auditors
* DOL audit letter changes, grandfathered status, plan design & compliance
* Expanded DOL powers including civil and criminal penalties
* DOL audit process, on-site visits, violations, compliance requirements
* How to respond to a DOL audit, preparing personnel, documenting materials
Open to all HR professionals but not agents, brokers or TPA firms
Date & Time: Wed, May 28, 2014 12:00 PM – 1:00 PM EDT
Space is limited. Reserve your spot today: https://www1.gotomeeting.com/register/938841017
This webinar has been approved for 1 HR General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute. The use of HRCI and/or the HRCI seal is not an endorsement by the HR Certification Institute of the quality of the program.
Posted May 21, 2014 by ABlume
By Noam N Levey of L.A. TIMES
The Obama administration has quietly adjusted key provisions of its signature healthcare law to potentially make billions of additional taxpayer dollars available to the insurance industry if companies providing coverage through the Affordable Care Act lose money. The move was buried in hundreds of pages of new regulations issued late last week. It comes as part of an intensive administration effort to hold down premium increases for next year, a top priority for the White House as the rates will be announced ahead of this fall’s congressional elections.
Administration officials for months have denied charges by opponents that they plan a “bailout” for insurance companies providing coverage under the healthcare law. They continue to argue that most insurers shouldn’t need to substantially increase premiums because safeguards in the healthcare law will protect them over the next several years. But the change in regulations essentially provides insurers with another backup: If they keep rate increases modest over the next couple of years but lose money, the administration will tap federal funds as needed to cover shortfalls.
Although little noticed so far, the plan was already beginning to fuel a new round of attacks Tuesday from the healthcare law’s critics. “If conservatives want to stop the illegal Obamacare insurance bailout before it starts they must start planning now,” wrote Conn Carroll, an editor of the right-leaning news site Townhall.com. On Capitol Hill, Republicans on the Senate Budget Committee began circulating a memo on the issue and urging colleagues to fight what they are calling “another end-run around Congress.”
Obama administration officials said the new regulations would not put taxpayers at risk. “We are confident this three-year program will not create a shortfall,” Health and Human Services spokeswoman Erin Shields Britt said in a statement. “However, we want to be clear that in the highly unlikely event of a shortfall, HHS will use appropriations as available to fill it.”
The stakes are high for President Obama and the healthcare law. Although more than 8 million people signed up for health coverage under the law, exceeding expectations, insurance companies in several states have been eyeing significant rate increases for next year amid concerns that their new customers are older and sicker than anticipated. Insurers around the country have started to file proposed 2015 premiums, just as the midterm campaigns are heating up. Obamacare, as the law is often called, remains a top campaign issue, and big premium increases in states with tightly contested races could prove politically disastrous for Democrats.
If rates go up dramatically, consumers may also turn away from insurance marketplaces in some states, leading to their collapse. Proposed increases in a few states where insurers have already filed 2015 rates have been relatively low, with several major carriers seeking just single-digit hikes. But insurers in closely watched states, such as Florida, Pennsylvania, North Carolina and Arkansas, are still preparing their filings. “It’s absolutely paramount to keep premiums in check,” said Len Nichols, a health economist at George Mason University who has advised officials working on the law.
The state-based marketplaces, which opened last year, allow consumers who do not get health coverage at work to shop among plans that meet basic standards. Sick consumers cannot be turned away, and low- and moderate-income Americans qualify for government subsidies to offset their premiums. To stabilize this new system, the law set up a complex system of funds, including one known as the Temporary Risk Corridors Program, that collect money from insurers and transfer it from companies with healthier, less expensive consumers to those with sicker, more costly consumers.
This system was supposed to pay for itself, as does a similar one used to shift money between drug plans in the Medicare Part D program. But insurance industry officials have grown increasingly anxious about the new system’s adequacy. Pressure is most acute on insurers in states where healthy consumers were allowed to remain in old plans that are not sold on the new online marketplaces, an option Obama offered to states amid a political firestorm over plan cancellations last year. The president had promised people would be able to stick with their plans.
The renewal temporarily solved a political problem for the White House, but created a new one. Maintaining these old plans kept many healthy consumers out of the marketplaces, making the pool of new customers less healthy and therefore potentially more expensive for insurers, according to experts. In a series of White House meetings over the last several months, Obama and other senior administration officials have sought to persuade insurance company CEOs to nonetheless hold rates in check, arguing that the marketplaces would stabilize over time.
But with proposed 2015 rates beginning to come in, the administration acceded to industry demands for a clear guarantee that more money would be available to cover potential losses. “In the unlikely event of a shortfall for the 2015 program year, HHS recognizes that the Affordable Care Act requires the secretary to make full payments to issuers,” the regulation published Friday notes. “In that event, HHS will use other sources of funding for the risk corridor payments, subject to the availability of appropriations.”
That language allows the administration to tap funds appropriated for other health programs to supplement payments to insurers, according to administration and industry officials. Among congressional Republicans, the decision has raised concerns. “If the program costs more than it brings in, the secretary would be able to divert money intended for other programs,” Republicans on the Senate Budget Committee warned. Whether the new regulations will be sufficient to control rates remains unclear.
America’s Health Insurance Plans, the industry’s Washington-based lobbying arm, welcomed the administration’s move, saying in a statement that the regulations “provide important clarity about how these insurer-financed programs will work as health plans prepare their rates for 2015.” In a note to investors this week, J.P. Morgan also noted that the new rules “should improve stability of the exchange market.”
But some insurers continue to warn of bigger increases. Larry Levitt, an insurance expert at the nonprofit Kaiser Family Foundation, cautioned that some consumers may still be in for sticker shock. “Premium hikes will likely be modest in much of the country,” he said. “But probably not everywhere.”
Implementation FAQs Address Out-of-Pocket Maximums, Preventive Services, Health FSA Carryovers, and More
Posted May 9, 2014 by ABlume
The DOL, IRS, and HHS have jointly issued FAQs Part XIX, addressing implementation of a variety of health care reform provisions. Here are highlights:
- Out-of-Pocket Maximums. Q/As-2 through -4 address the extent to which certain items must be counted toward the annual limit on out-of-pocket maximums for essential health benefits (EHB), generally applicable to non-grandfathered group health plans and health insurance coverage for plan years beginning on or after January 1, 2014.
- Out-of-Network Spending. Building on a prior FAQ (under which a plan with network providers may, but is not required to, count out-of-network spending toward the plan’s out-of-pocket maximum; see our article), Q/A-2 states that a plan that chooses to count out-of-network spending may use any reasonable method. For example, a plan may count amounts that participants pay toward the usual, customary, and reasonable amount (UCR) for a service, without counting amounts paid in excess of UCR (i.e., balance billing).
- Higher Cost-Sharing for Brand-Name Drugs. Q/A-3 provides that if a self-insured or large group health plan defines EHB to include (where medically appropriate and available) only generic prescription drugs, but also offers a separate option to purchase the brand-name drug with higher cost-sharing, then (assuming appropriate disclosure) the difference in cost-sharing need not be counted toward the out-of-pocket maximum. (Q/As-3 and -4 note that non-grandfathered individual insurance coverage and insured small group health plans may be subject to additional requirements because they must provide the EHB package; see our article.)
- Reference-Based Pricing. Q/A-4 addresses reference-based pricing structures, under which the plan pays a fixed amount for a particular procedure, which certain providers accept as payment in full. The agencies invite comments (by August 1, 2014) on how the out-of-pocket maximum limit should apply in these circumstances. Until further guidance, a plan may treat providers that accept the reference amount as in-network providers (i.e., balance billing paid to other providers need not be counted toward the out-of-pocket maximum), so long as the plan uses a reasonable method to ensure adequate access to quality providers.
- Coverage of Tobacco Counseling as Preventive Services. Q/A-5 addresses the requirement to cover tobacco counseling and interventions as preventive services (i.e., without cost-sharing when provided in-network). Because the underlying task force recommendation does not specify a frequency, method, or setting for these services, a plan or insurer may use reasonable medical management techniques to determine any coverage limitations (see our article). For example, a plan or insurer will be in compliance if it covers (a) screening for tobacco use; and (b) for tobacco users, at least two “cessation attempts” (as defined in the Q/A) per year.
- Health FSA Carryover and Excepted Benefits. Q/A-6 coordinates the excepted benefit requirements for health FSAs with IRS guidance allowing health FSAs to offer carryovers of up to $500 (see our article). The Q/A provides that carryover amounts are not taken into account in determining whether a health FSA satisfies the maximum benefit condition of the excepted benefit requirements. [EBIA Comment: This FAQ resolves an issue left open by the initial carryover guidance and is welcome news. And footnote 14 in this portion of the FAQs caught our attention, because it seems to suggest that a nonexcepted health FSA could be integrated with other coverage to comply with health care reform’s preventive services requirements. It is difficult to reconcile the footnote with agency guidance issued last year, which notes that nonexcepted health FSAs generally will fail to meet the preventive services requirements (see our article). Clarification from the agencies would be helpful.]
- Summary of Benefits and Coverage (SBC). Q/A-7 provides that, until further guidance is issued, the SBC template and sample completed SBC made available in April 2013 (see our article) may be used after the second year of applicability (i.e., for plan years beginning on or after January 1, 2015). And Q/A-8 extends, until further guidance is issued, certain previously issued enforcement and transition relief relating to various aspects of SBC compliance.
Posted May 6, 2014 by PHaynes
The United States DOL (Department of Labor) released some new/revised notices at the end of last week. These include:
- New Model General Notice (used in IROC & COBRA FAQ letters. IROC = Initial Rights of COBRA notice, given to new plan entrants to remind them that certain events can trigger a loss of coverage and that those events also trigger COBRA rights, if you act/seek to enforce them timely).
- New Model Election Notice
- New/Updated CHIP/Medicaid Notice
These new notices will be published in tomorrow’s Federal Register (May 7, 2014). These updated COBRA notices are designed to drive home the point that we’ve all been discussing since PPACA became law—namely that, for many (former-plan participants) choosing to purchase a plan through the Health Insurance Marketplace (that’s what the government run exchanges are called) will often be cheaper, and may even offer greater options than continuing coverage via COBRA.
Why not just end COBRA?
Well, we all know that these Marketplace-based coverages are not without their flaws and problems, and there are considerations like networks, continuity of care, or even that you’ve already met your deductible and do not wish to “start over” on a new plan to consider. However, at some point in the future (maybe even within the next two years) we could see Congressional action to repeal COBRA if the Marketplaces were viable and accessible for all.
Frequently Asked Questions
The DOL, HHS and Treasury also published FAQs related to the proposed changes to model notices. The FAQs are also posted on the DOL website and on the HHS website. HHS also posted their version of a Special Enrollment Period for the Marketplace (for people that are already enrolled in COBRA and for other COBRA QBs (Qualified Beneficiaries).
While it is true that you are not required to use the Model Notices, however, Plans that do use them are presumed to meet the COBRA notice requirements. Prior notices didn’t elaborate about all the options, including seeking Marketplace coverage (instead of COBRA), so the Special Enrollment Period was created. Thus HHS established a Special Enrollment Period, allowing COBRA QBs in states covered by the federally facilitated Marketplace until July 1, 2014 to drop COBRA coverage and enroll through the Exchange by calling the Marketplace call center.
The DOL,HHS andTreasury also encourage state-rune health insurance Exchanges to provide similar notices and Enrollment periods for COBRA QBs.
- New Model General Notice
- New Model Election Notice
- New/Updated CHIP/Medicaid Notice
- Marketplace-based coverages
- DOL FAQs
- HHS FAQs.
- Special Enrollment Period for the Marketplace
Posted May 2, 2014 by ABlume
The Council for Disability Awareness has developed tools and resources on this page to help advisors, employers, consumers, the media, and anyone else interested in disability, understand the need for every working American to protect his or her income. Check out this interesting infographic. More information is available at http://disabilitycanhappen.org/diam/.