By November 5, 2014, every large controlling health plan must obtain a health plan identifier for use in its standard electronic transactions.
What Is a Health Plan Identifier (HPID)?
A health plan identifier is a standardized 10-digit number that is unique to a plan.
Who Must Obtain an HPID in the Coming Weeks?
Large “controlling health plans” must obtain HPIDs in the next few weeks. A “large” plan is one that paid health care claims of $5 million or more during the plan’s last full fiscal year. The term “health plan” includes major medical, prescription drug, and vision and dental coverages; health reimbursement arrangements (HRAs); health flexible spending arrangements (HFSAs); and employee assistance plans (EAPs) that provide medical care.
A “controlling” health plan (CHP) is defined as a health plan that controls its own business activities and policies or is controlled by a non-health plan, and if it has a sub-health plan, it controls that plan’s activities. A “subhealth plan” (SHP) is a health plan whose business activities, actions or policies are decided by a CHP.
This “control” test, which is used to identify CHPs, does not appear to produce sensible (much less predictable) results when applied to single-employer self-insured group health plans. Since the terms of these plans are established by their sponsors and they are invariably administered by either their sponsors or by a third party, it seems possible to conclude that every single program or coverage noted above could qualify as a separate CHP (although many would not be “large” plans subject to the impending deadline).
Fortunately, on September 30, the government provided some clarity in a set of frequently asked questions by stating that HRAs that cover deductibles only or out-of-pocket costs and HFSAs do not need HPIDs. Further, the government suggested that group health plan components of wrap plans and cafeteria plans should be analyzed independently. For example, if a wrap plan consists of a self-insured major medical program, fully insured dental and vision programs, and an HFSA, the plan administrator would only be required to obtain an HPID for the medical program. The health insurance carrier would be responsible for obtaining any HPIDs for the dental and vision programs. Also, the government specifically stated that third-party administrators may obtain HPIDs on their plans’ behalf, though ultimate responsibility would remain with the plans’ administrators. Although not addressed in the FAQs, we believe that retiree-only plans should have their own HPIDs to avoid being lumped together with active employees’ plans, thereby risking the loss of their exemption from the health care reform law.
When Must an HPID Be Obtained?
CHPs must obtain HPIDs by November 5, 2014. “Small” health plans have until November 5, 2015.
Why Must an HPID be Obtained?
HPIDs must be obtained because they are required by HIPAA’s administrative simplification rules. All health plans must use their HPIDs in standard electronic transactions beginning November 7, 2016. In addition, a CHP that willfully neglects to obtain an HPID is to be penalized at least $50,000, and an additional $50,000 each time it fails to use an HPID when required. The government has indicated that it is likely to seek these types of penalties from plan administrators. In the absence of another designation under a plan, the sponsoring employer generally is considered the plan administrator of a single employer plan, and the joint board of trustees generally is considered the plan administrator of a multiemployer plan. For most association-sponsored plans, the organization, association or committee that establishes, maintains and promotes the plan is considered the plan administrator.
Where Must an HPID Be Obtained?
HPIDs must be applied for online.
How Must an HPID Be Obtained?
The enumeration process requires applicants to go through several different systems on the CMS website. First, an applicant must register for access to the CMS Enterprise Portal. The applicant is asked to provide his or her name, address and Social Security number, among other things. Second, the applicant must register for access to the Health Insurance Oversight System (HIOS). If this registration is approved, an HIOS authorization code is sent via e-mail. Third, the applicant must access HIOS and register his or her organization (i.e., plan). Again, the applicant must wait for approval sent via e-mail. Fourth, the applicant must specify his or her role under the Health Plan and Other Entity System (HPOES). The applicant will identify himself or herself as a Submitter. Yet again, the applicant must wait for approval sent via e-mail. Fifth, the Submitter initiates a CHP HPID application from the HPOES homepage. Until a few days ago, applications had to be approved by an “Authorizing Officer.” That step has been eliminated. Once the application is submitted, the Submitter will receive a confirmation e-mail. Sixth, if the application is approved, an HPID is assigned to the CHP and notice is provided through e-mail.
The application process is not intuitive, quick or simple. In fact, it is almost comically complex and labored. Plan sponsors should not make the mistake of thinking HPIDs can be obtained at the last minute. Remember, this is a high-traffic governmental website that will likely see a spike in activity as the deadline approaches. If you run into trouble due to the complexity or time-consuming nature of this task, consider sending questions email@example.com, which we understand is a government-sanctioned e-mail address for HPID-related questions. You should document all the steps that you have taken and be persistent even if the deadline (November 5, 2014) passes. Finally, if you expect that your plan will be covered by an HPID of a third party (such as a multiple employer welfare arrangement (MEWA) or voluntary employees’ beneficiary association (VEBA)), consider requesting written confirmation of receipt of an HPID that covers your plan.