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Health Care Reform requires most self-funded and fully-insured group health plans to obtain a Health Plan Identifier (HPID). The HPID is a 10-digit number that will be used to identify the plan in covered electronic HIPAA transactions (for example,electronic communications between the plan and certain third parties regarding health care claims, health plan premium payments, or health care electronic fund transfers).
Large health plans (plans with annual receipts in excess of $5 million) must obtain an HPID by November 5, 2014. Small health plans have until November 5, 2015 to comply. “Receipts” for this purpose appear to be claims paid.
Who is Responsible? For self-funded plans, the plan sponsor is responsible for obtaining an HPID (third-party administrators cannot obtain an HPID on behalf of a self-funded plan sponsor). Although it appears that most insurers will obtain the HPID on behalf of fully-insured plans, some insurers are requiring the plan sponsor to obtain an HPID.
Application Process. To sign up for an HPID, plan sponsors must first be registered within the Centers for Medicare & Medicaid Services’ (CMS) Health Insurance Oversight System (HIOS) .
The individual responsible for applying will need to sign up as an individual and request to be linked to the relevant company. The individual will then complete the requested information (including company name, address, and EIN, authorizing official information, and the plan’s “Payer ID” number or “NAIC” number).
Some self-funded plan sponsors have reported difficulty with the registration process because self-funded plans do not have a Payer ID or NAIC number. Although CMS has not yet released any formal guidance on this issue, it is expected that self-funded plans will enter “not applicable” for the Payer ID and either leave the NAIC number blank or use the plan sponsor’s EIN in lieu of the NAIC number.
Once the required information has been submitted, an authorized individual within the company must request access to the HIOS. CMS will then grant access to the HIOS system by electronically sending an authorization code to the authorized individual.
The CMS website has step-by-step instructions via a “cheat sheet” and a YouTube video explaining the entire process.
Next Steps. The registration process can be time consuming as there are a number of different registration screens to work through, the collection of the required data may be cumbersome, and delays have been reported within the CMS registration portal. Accordingly, plan sponsors of large self-funded group health plans may wish to begin the registration process as soon as possible in order to meet the November 5, 2014 deadline. Plan sponsors for fully-insured plans should contact the plan’s insurer to see if the insurer will apply for the HPID on behalf of the plan.
Employers must provide a creditable or non-creditable coverage notice at least once a year to all Medicare eligible individuals who are covered under, or who apply for, the group’s prescription drug plan. This notice must be provided to both active employees and retirees who are eligible for Medicare Part D.
The Medicare Modernization Act mandates that all employers offering prescription drug coverage disclose to all Medicare eligible individuals with prescription drug coverage under the plan whether the coverage is “creditable”. This information is essential to the Medicare eligible’s decision whether to enroll in a Medicare Part D prescription drug plan.
Employers are required by the Centers for Medicare and Medicaid Services (CMS) to provide creditable coverage at least once a year and at the following times:
This notice does not need to be a separate mailing and can be included with other plan information materials either printed or electronic. Employers are required to provide this notice and to provide CMS with your plan’s creditable or non-creditable coverage status annually via online form within 60 days of the beginning of each plan year.
Please contact our office for assistance in determining if your prescription drug plan is considered creditable or non-creditable coverage or if you need a copy of the model notice for employees.
The Department of Health and Human Services (HHS) recently updated the Code Set Rules. The Code Set rules are part of the Health Insurance Portability and Accountability Act’s (HIPPA’s) Administrative Simplification Provisions. These rules create uniform electronic standards for common health plan administrative processes. Requiring health care providers and other stakeholders to use the same data formats for common transactions simplifies certain administrative aspects of providing and paying for health care.
Under the latest rules, self funded employers will need to apply for a Health Plan Identifier (HPID). Most employers will have to apply by November 5, 2014. This number will be used to ensure employers comply with certain Code Set rules requirements.
The Code Set Rules have affected covered entities for a number of years. However, certain aspects of these rules were not enforced in the past. In order to promote efficient health coverage, health care reform includes provisions to ensure health care stakeholders are complying with specific transaction and code set requirements.
Review of the HIPAA Code Set Rules
The final HIPAA Transaction and Code regulations published in August 2000 applied to most health plans as of October 16, 2003. They require covered entities conducting certain transactions electronically to use specific standards and code sets. Covered entities include:
Most of the applicable transactions occur between the health plan and health care providers covering areas like claims submission and payment, eligibility, and authorizations/referrals, however the enrollment and disenrollment transaction process generally involves the employer and the health plan.
New Requirements for a HPID for Self Funded Plans
The Code Set rules require all parties involved in the health care system to use an identifying number. Large group health plans (plans with an annual cost of $5 million or more) need to register for their Health Plan Identifier (HPID) number by November 5, 2014. Small group health plans (plans with an annual cost of less than $5 million) will have an extra year to obtain an HPID. Annual cost is based on paid claims before stop loss recoveries and excluding administrative costs and stop loss premiums.
Insurance carriers will likely apply for the 10-digit HPID number for all of their fully- insured group health plans. Employers will have to apply for their 10-digit HPID for self-funded medical plans. The health plan needs to use the HPID number for any of the standard transactions the Code Set rules cover.
Every health plan considered a covered entity must obtain an HPID. The regulations include delineations of group health plans including Controlling Health Plans (a health plan that controls its own business activities, actions and policies) and Subhealth Plan (a health plan whose business activities, actions or policies are directed by a Controlling Health Plan).
Employers are not really sure how the relationship between controlling health plans and subhealth plans would apply to employer-sponsored health plans and are awaiting further clarification from HHS on this issue.
All health plans, regardless of size, must use their HPIDs in standard transactions by November 7, 2016. A “standard transaction” is a CMS menu of transactions, like a claim payment, that must be coded with an HPID.
Employer must provide information about their organizations and health plans when they register for the HPID electronically. More information on applying for an HPID is available here.
Certification Requirements for Compliance with Standard Transaction Rules
Health plans must also verify with HHS that they comply with the Code Set rules. Health plans have been subject to these rules for almost a decade, however there has been little to no oversight on compliance with the common formats. HHS is now requiring a certification showing that the plan is using the standard formats. Initially, the certification will only be done on a few of the required transactions.
The health plan must first certify that they meet the Code Set requirements for eligibility, claim status and EFT and remittance advice transactions. Plans have two different options to certify they are complying. Both involve having specific vendors certify the plan uses the proper transaction formats. The two options are as follows:
The HIPAA Credential option involves testing the required transactions with at least three trading partners. Those three partners have to represent at least 30% of transactions conducted with providers. If it does not constitute 30%, then the plan must confirm it has successfully traded with at least 25%.
The Phase III Core Seal will require the Controlling Health Plan to test transactions with an authorized testing vendor.
All certifications will be filed with HHS. The first one will be due by December 31, 2015. Health insurance carriers and Third Party Administrators will most likely provide the certifications for employer-sponsored health plans, but employers will still need more details on the filing.
The second certification applies to other transactions the Code Set rules cover. Specifically, the second certification applies to claims information, enrollment, premium payments, claims attachments, and authorizations or referrals. HHS has not issued any guidance on these certifications yet. These second certifications are also due by December 31, 2015. However, because of the lack of specific guidance, it is very likely this due date may be delayed.
Action Plan
To register for an HPID, employers need to take the following steps:
1. Determine when the plan must obtain an HPID
2. If your plan if fully insured, contact your insurance carrier. It appears most insurance carriers will apply for the HPID for fully insured plans.
3. If your plan is self-funded, schedule time over the next several months to register for an HPID for your health plan. The registration is a CMS-managed online application process. The regulations estimate that it will take 20 -30 minutes to complete the application. Sponsors will be directed to an online enumeration system titled: Health Plan and Other Entity Enumeration System (HPOES).
It was announced on Wednesday, March 5th, by the Obama Administration that it would allow some health plans that do not currently meet all Affordable Care Act (ACA) requirements to continue offering non-compliant insurance for another two years. The Centers for Medicare and Medicaid Services (CMS) released the announcement, clarifying the new policy.
In November 2013, the Obama administration decided that some non-grandfathered health plans in the small group and individual markets would not be considered out of compliance if they failed to meet certain coverage provisions of the ACA. The transition relief was originally scheduled to last for one year, and was viewed as a response to the numerous health insurance policy cancellations that would result from the new requirements.
This recent announcement extends this relief for two additional years. CMS released the following:
“At the option of the States, health insurance issuers that have issued or will issue a policy under the transitional policy anytime in 2014 may renew such policies at any time through October 1, 2016, and affected individuals and small businesses may choose to re-enroll in such coverage through October 1, 2016.”
Who Will This Impact?
This decision, which will likely prevent another wave of cancellations that were scheduled to begin November 1, 2014 and will impact some insurance offerings, but is unlikely to have a significant impact, since only about half of the states have opted to grant extensions to health plans within their jurisdictions. Further, the number of people currently on these non-compliant plans has been dropping, and is expected to continue to decline. Under the new policy, these plans (which typically offer fewer benefits at lower costs since they do not have to abide by the ACA’s minimum essential coverage) will still be available until plans expire in 2017.
Please note that it will be up to each individual state, as well as each individual insurance carrier, as to if they will decide to adopt this additional two year extension. Under the original one year transitional relief, even though it was allowed in the State of Florida, there are currently some health insurance carriers who have decided to not allow groups to renew their existing non-compliant medical plans.
We will continue to keep you up to date of new developments in ACA implementation as they arise. Please contact our office for additional information regarding your group’s medical policy and the impact of this recent change on it.
This is a reminder that the deadline to distribute the Annual Notice of Creditable Coverage required under Medicare Part D is rapidly approaching. This notice informs participants whether the prescription drug coverage offered under your health plan constitutes creditable or noncreditable coverage. As the Medicare Part D annual enrollment period now runs from October 15 to December 7, you must distribute the notices before October 15.
Employers who sponsor a health plan offering prescription drug benefits must provide an annual notice to all Medicare-eligible participants that explains whether the prescription drug benefits offered under the plan are at least as good as the benefits offered under the Medicare Part D plan. The only employers exempt from this requirement are those that establish their own Part D plan or contract with a Part D plan.
The Centers for Medicare and Medicaid Services (CMS) has posted forms and instructions for providing this notice. The forms were last updated in 2011. They are available, both in English and Spanish.
The Notice of Creditable Coverage must be provided:
Because it is difficult to keep track of which employees (and their spouses or dependents) are eligible for Medicare benefits, you may want to consider making the Notice a part of your new-hire enrollment materials and your annual open enrollment materials. If distributed before October 15, this should take care of the first two bullet points above.
Remember that you must also submit a Disclosure to CMS Form each year, reporting whether your prescription drug coverage is creditable or non-creditable. This form must be submitted electronically within 60 days of the beginning of each plan year (i.e. if you are on a calendar year, you must submit the form by March 1, 2014).
CMS recently issued a list of FAQs regarding the Federally Facilitated Marketplace (FF-SHOP aka Marketplace aka Exchange) and how they will handle the issue of tobacco rating for medical plans.
Q1: If an employee or an employee’s dependent obtaining coverage through the FF-SHOP uses tobacco, how can the employee or dependent avoid the tobacco premium rating surcharge?
A1: The FF-SHOPs will not impose the tobacco rating surcharge at the time of initial enrollment (or re-enrollment) if the employee or dependent, as applicable, agrees at the time of enrollment (or renewal or re-enrollment) to participate in a wellness program meeting the standards of section 2705 of the Public Health Service Act, such as a tobacco cessation program.
Q2: If an employee or enrollee’s dependent who is already enrolled in coverage through the FF-SHOP decides to participate in a wellness program in the middle of the plan year after initially declining to participate, will his/her premium be reduced immediately or retroactively to the time of enrollment?
A2: In the FF-SHOPs, an employee’s or employee’s dependent’s premium will be established for a period of one year upon enrollment, renewal, or re-enrollment of that employee or dependent. At that time, the enrollee or dependent can agree to participate in a wellness program to avoid the tobacco premium surcharge. If the employee or dependent does not agree at that time to participate in such a wellness program, the employee/dependent will have an opportunity to avoid the tobacco premium surcharge upon renewal or re-enrollment.
The following is a frequently asked question recently released by CMS regarding the Marketplace and Income Verification for the purpose of advance payment of the premium tax credit and cost sharing reductions.
Q: Will Marketplaces verify the income of consumers as part of the eligibility process for advance payments of the premium tax credit and cost sharing reductions?
A: Yes. The Marketplaces will use data from tax filings and Social Security data to verify household income provided on an application, and in many cases, will also use current wage information that is available electronically. The multi-step process will begin when an applicant applies for insurance affordability programs (such as the advance payments of the premium tax credit and cost sharing reductions) through the Marketplace and affirms or inputs their projected annual household income. The applicant’s inputted projected annual household income is then compared with information available from the IRS and Social Security Administration (SSA). If the data submitted as part of the application process cannot be verified using IRS and SSA data, then the information is compared with wage information from employers provided by Equifax. If Equifax data does not substantiate the inputted information, the Marketplace will request an explanation or additional documentation to substantiate the applicant’s household income.
When documentation is requested, the Affordable Care Act and implementing regulations specify that if an applicant meets all other eligibility requirements, he/she will be provided with eligibility for advance payments of premium tax credit and cost sharing reductions based on the inputted projected annual household income for 90 days (which may be extended based on good faith), provided that the tax filer attests to the Marketplace that he/she understands that any advance payments of the premium tax credit paid on his/her behalf are subject to reconciliation. If documentation is requested and is not provided within the specified timeframe, regulations specify that the Marketplace will base its eligibility determination on IRS and SSA data, unless IRS data is unavailable. In this case, the Marketplace will discontinue any advance payments of the premium tax credit and cost sharing reductions.
Please note that applicants for advance payment of the premium tax credit and cost sharing reductions must attest, under penalty of perjury, that they are not providing false or fraudulent information. In addition to the existing penalties for perjury, the Affordable Care Act applies penalties when an individual fails to provide correct information based on negligence or disregard of program rules, or knowingly and willfully provides false or fraudulent info. Moreover, the IRS has said they will reconcile advance payments of the premium tax credit when consumers file their annual tax returns at the end of the year, and it will recoup overpayments and provide refunds when appropriate, subject to statutory limits.
Small businesses may participate in several federally facilitated Small Business Health Option Program (SHOP) exchanges – for example, if an employer has offices in different states – but each small employer is limited to establishing one FF-SHOP account per state.
If an employer has worksites in several states, it may (1) establish an account in each state where the company has a primary work location for workers; or (2) it may establish an account in one state and use that to provide health insurance for all members of the group. If it does establish accounts in several states, it must submit a separate report on the participation rate to each FF-SHOP.
An employer is considered to be a small employer eligible for SHOP coverage if its average number of employees is 50 or fewer. Employers participating in the FF-SHOP must offer coverage to all full-time employees, defined as those working 30 or more hours per week on average.
The SHOP system is a way for employers to help satisfy health reform’s mandate for individuals to obtain coverage or pay extra taxes. Furthermore, most (34 out of 50, not including the District of Columbia) states will house (but not run) FF-SHOP exchanges.
In March 2013, the CMS released final rules that described the 70% participation requirement for small employers. Under those rules, insurers may deny coverage to small employers that fail to meet the minimum participation requirements.
Minimum Participation
Insurers may impose a 70% workforce participation requirement for small employers to partake in FF-SHOP coverage. In the first open enrollment period (Nov. 15 through Dec. 15, 2013), however, workers can obtain coverage on an interim basis even if an employer falls below the minimum participation amount, according to CMS. On renewal one year later, however, insurers will be able to invoke the participation requirement. State law may impose a different minimum participation requirement. Small employers are required to keep records of coverage held by workers to substantiate minimum participation and to ensure that workers do not have double coverage.
Other Highlights
Here are a few other policies small employers will want to know when considering group coverage with an FF-SHOP:
Employers must provide a creditable or non-creditable coverage notice at least once a year to all Medicare eligible individuals who are covered under, or who apply for, the group’s prescription drug plan. This notice must be provided to both active employees and retirees who are eligible for Medicare Part D.
The Medicare Modernization Act mandates that all employers offering prescription drug coverage disclose to all Medicare eligible individuals with prescription drug coverage under the plan whether the coverage is “creditable”. This information is essential to the Medicare eligible’s decision whether to enroll in a Medicare Part D prescription drug plan.
Employers are required by the Centers for Medicare and Medicaid Services (CMS) to provide creditable coverage at least once a year and at the following times:
This notice does not need to be a separate mailing and can be included with other plan information materials either printed or electronic. Employers are required to provide this notice and to provide CMS with your plan’s creditable or non-creditable coverage status annually via online form within 60 days of the beginning of each plan year.
Please contact our office for assistance in determining if your prescription drug plan is considered creditable or non-creditable coverage or if you need a copy of the model notice for employees.