We want to make our clients aware that, despite some criticism, the U.S. Department of Health and Human Services (HHS) is continuing to insist that health insurance carriers and sponsors of certain self-insured health plans must apply for and obtain a health plan identifier number (or HPID) from HHS by November 5, 2014.

Among its other health insurance reforms, the Affordable Care Act directed HHS to develop a process to address inefficiencies in the electronic transaction rules of the Health Insurance Portability and Accountability Act (HIPAA). Through the HPID requirement, HHS seeks to standardize and facilitate these electronic transactions through the creation of standard, unique health plan identification numbers.

Under the HHS regulations, certain self-insured health plans, including group health, employee welfare benefit, and retiree-only Health Reimbursement Arrangement plans, with annual receipts of more than US$5 million have until November 5, 2014 to apply for and obtain an HPID. This same requirement applies to health insurance carriers with respect to fully insured health plans. The deadline for small health plans, those with annual receipts of US$5 million or less, is November 5, 2015. The deadline for all plans to use HPIDs in HIPAA standard transactions is November 7, 2016.

Frequently Asked Questions have clarified that it is not necessary to obtain an HPID for a Health Reimbursement Arrangement that covers deductibles only or out-of-pocket costs, a Flexible Spending Account, or a Health Savings Account. Sponsors of plans that include both insured and self-insured components should obtain a single HPID for the self-insured components only as the issuer is responsible for obtaining an HPID for the insured component. Employers who sponsor multiple plans that are covered by the HPID regulations should obtain separate HPIDs for each of their covered plans.

The online link for applying for an HPID can be found here. Please note that each step requires submission, and then waiting for review and approval by the Health Insurance Oversight System helpdesk before moving on to the next step(s). Therefore, timely action is required to meet the November 5, 2014 deadline. Employers should contact their third-party administrators or administrative service organizations to determine whether these organizations have obtained or will obtain an HPID on behalf of their covered plan(s).