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SUSPENDED - CMS Issues FAQs on Health Plan Identifiers Provides Welcome News for Employers

Enforcement Suspended until Further Notice.

Note Deadline: Large health plans must obtain an HPID by November 5, 2014

In September, 2012 final regulations were issued by the Department of Health and Human Services (HHS), establishing a standard for a national unique Health Plan Identifier (HPID). This ten-digit code will be used to identify health plans in standard electronic transactions. The Centers for Medicare and Medicaid Services (CMS) recently issued Frequently Asked Questions (FAQs) addressing the HPID, along with a Quick Reference Guide to obtain an HPID.   

Who needs Health Plan Identifiers?
HPIDs are required for controlling health plans (CHPs). Generally, CHPs are health plans that control their own business activities, actions or policies or are controlled by an entity that is not a health plan. All CHPs, including self-insured CHPs, are required to obtain an HPID. Health Insurance Issuers (carriers) are required to obtain the HPID on behalf of fully-insured plans. Self-insured plans are required to obtain HPIDs if: 1) it meets the definition of a health plan because it provides or pays the cost of medical care; and 2) it is a CHP. Even CHPs that do not conduct standard transactions will need to secure HPIDs. HPIDs are voluntary for subhealth plans (SHP) whose business activities, actions or policies are directed by CHPs. However, SHPs may obtain HPIDs rather than utilizing the CHP's HPID.

The updated guidance from CMS came just in time for health plans that must obtain HPIDs by November 5, 2014. However, small health plans, those with annual receipts (claims for a self-insured plans or premiums for fully-insured plans) of $5 million or less, have an additional year (November 5, 2015) to obtain HPIDs. By the full implementation date all health plans, regardless of size, must use an HPID in standard transactions beginning November 7, 2016.

What about Health Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs)?
Although health FSAs, HSA and HRAs were originally required to obtain HPIDs, the latest CMS FAQs clearly exempt health FSAs and HSAs. CMS considers them individual accounts directed by the consumer to pay healthcare costs and are exempt from the requirement to obtain HPIDs.  HRAs that cover deductibles only or out-of-pocket costs do not require HPIDs as these are more like additional plan benefits than stand-alone plans. For example, "out-of-pocket costs" may include cost-sharing amounts, such as deductibles, co-insurance, and co-pays. However, HRAs that reimburse non-covered services, such as acupuncture or Lasik, would not qualify for this exemption and should apply for an HPID. 

Wrap plans and cafeteria plans can be composed of a combination of health plan arrangements. For example, a wrap plan that includes a fully-insured medical plan, self-insured dental plan, and HRA that covers deductibles, would require the employer to obtain an HPID only for the self-insured dental plan.  The carrier would be responsible for obtaining the HPID for the fully-insured medical plan. The HRA only covers deductibles and therefore an HPID is not required. These exemptions are certainly welcome news for employers!

How will a health plan obtain an HPID?
A national enumeration system, known as the Health Plan and Other Entity Enumeration System (HPOES) assigns unique HPIDs through an online "enumeration" process. Data requested include company name, EIN, address, contact information for the authorizing official, the plan's NAIC number or payer ID for standard transactions. CMS has created several videos and presentations to guide plans through the enumeration process, and the Quick Reference Guide provides step-by-step instructions to access and apply for the HPID.
There are several uses for an HPID besides appearing in standard transaction files. The regulations list the potential uses which includes internal files to facilitate the processing of transactions, on an enrollee's health insurance card, as a cross-reference in healthcare fraud and abuse files and other program integrity files.

Certification of Compliance
Another important requirement imposed on plans is the certification of compliance which requires CHPs to file two separate statements with HHS certifying their data and operating systems have been tested and are in compliance with the applicable standards and operating rules. The second certification of compliance is applicable to health claims, enrollment or disenrollment in a health plan, health plan premium payments and includes the number of "covered lives." These are due by December 31, 2015 for plans that have applied for an HPID by January 1, 2015 (most large CHPs) and within a year of applying for HPIDs for plans that apply for an HPID between January 1, 2015 and December 31, 2016 (e.g., small and new CHPs).


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