Health Plan Identifier — Due by November 5, 2014 for Large Group Health Plans
As part of the government’s ongoing efforts to standardize health plans’ electronic transactions, all group health plans are required to obtain a health plan identifier (“HPID”). The HPID will be used to identify the plan when it engages in standard transactions.
For this purpose, a health plan is any plan that engages in electronic transactions, which may include major medical plans, dental plans and vision plans. If a plan is fully-insured, then the insurance carrier is responsible for obtaining the HPID. If a plan is self-insured, then the plan sponsor must obtain the HPID. If a plan sponsor’s health plan has both fully-insured and self-insured options, or has multiple self-insured options, then the plan sponsor is permitted to either obtain one HPID for the “controlling health plan,” which ID then would apply for all of the self-insured options, or it may obtain a separate HPID for each self-insured option. At this point, there seems to be no benefit in obtaining multiple HPIDs for each self-insured option, unless the plan’s third-party claims administrator desires to use separate IDs for administration or tracking purposes.
While the deadline for obtaining the HPID varies depending on whether the plan is a small or large group health plan, there is a uniform implementation date for using the HPID in standard transactions, as follows:
|Type of Plan||Compliance Date for Obtaining HPID||Implementation Date for |
Use of HPID in Standard Transactions
|Large Health Plans||November 5, 2014||November 7, 2016|
|Small Health Plans*||November 5, 205||November 7, 2016|
*A small health plan is a plan that pays less than $5 million in benefits per year.
Presumably, any claims administrator or other business associate performing standard transactions on behalf of the plan will ask the plan sponsor for the ID if and when needed.
To obtain the HPID, plans sponsors will need to use the “Health Plan and Other Entity Enumeration System” (HPOES), an electronic system maintained by the Department of Health and Human Services (“HHS”). The CMS Health Plan Identifier webpage has helpful information, including step-by-step instructions explaining how to apply for an HPID, instructional videos, and PowerPoints from prior CMS presentations.
Reporting Requirement for Transitional Reinsurance Fee — Due by November 15, 2014
You may recall that the Affordable Care Act (the “ACA” or “Obamacare”) added a couple of new fees for health plans, including the transitional reinsurance fee. We haven’t yet seen any acronyms for the transitional reinsurance fee (the “TRF”, anyone?), so we will simply refer to it as the fee or call it by its full name. You may have noticed that the Department of Health and Human Services (“HHS”), the agency responsible for implementing and collecting the fee, prefers to refer to it as a “contribution.”
“Contributing entities” — including health insurance issuers and self-insured group health plans offering major medical coverage — are required to pay the fee. So, if you have a self-insured major medical health plan, you’ll need to pay the fee (or arrange for the plan’s third party administrator to pay the fee on behalf of the plan). If you have a fully-insured health plan, then the insurance carrier will pay the fee.
The fee is owed with respect to any major medical plan. A major medical plan is one that provides minimum value, as defined under the ACA’s employer shared responsibility rules. The fee will not be assessed on the following types of health plan arrangements: (1) stand-alone dental or vision plans, (2) retiree medical plans that provide benefits secondary to Medicare, (3) health reimbursement accounts (HRAs) that are integrated with major medical coverage, (4) health savings accounts (HSAs), (5) health flexible spending accounts (FSAs), (6) employee assistance plans (EAPs), (7) wellness programs, or (8) prescription drug-only plans.
As mentioned above, the fee will be due for calendar years 2014, 2015 and 2016 only, which is good because unlike the paltry POCRI fee of $1 per covered life, the transitional reinsurance fee is a whopping $63 per covered life in 2014. The amount due for 2015 will be $44 per covered life. The fee amount for 2016 will be announced in a future year. For 2015 and 2016 only, a self-insured major medical plan that does not utilize a third-party administrator (other than for prescription drugs) will not be subject to the fee.
For self-insured group health plans, a plan sponsor may elect to count covered lives in one of four ways:
If your major medical group health plan has both fully-insured and self-insured options, provided you are separately tracking covered lives, you can use any of the methods above to determine the covered lives for your self-insured options. Health insurance carriers are required to use one of the methods in the first two bullet points when calculating their required fee.
To pay the fee, the first step is to go to Pay.gov and access the “ACA Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form.” [Note: As of the date of this publication, the form was not yet available.] You will enter the total number of covered lives on this form, designate the counting method used, list the names of the plans being covered by the form, and provide any other required information. The HHS will then auto-calculate the amount of the transitional reinsurance fee due for the year based on the number of covered lives reported, and notify the contributing entity of the amount due. The contributing entity must pay the fee in two installments. The chart below highlights the relevant reporting and payment deadlines.
Key Deadlines for 2014 - 2015
|No later than:
November 15, 2014
|Submit annual enrollment count||None|
|No later than:
January 15, 2015
|Remit first installment of fee||$52.50 per covered life|
|No later than:
November 15, 2015
|Remit second installment of fee||$10.50 per covered life|
If the plan sponsor pays the fee (or has the plan’s third party administrator make the payment on its behalf), then the plan sponsor may treat the payment as an ordinary and necessary business expense, which may be deductible. If there is a trust associated with the plan (such as a VEBA), then the fee is considered a permissible plan expense, which may be paid with trust assets if the terms of the trust agreement so allow.
Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and colleagues. If you have any questions about this update or would like to discuss the topic further, please contact your Foley attorney or the following:
Leigh C. Riley
Casey K. Fleming