Employers that sponsor self-insured health benefits—including medical plans, prescription drug programs, dental programs, vision programs and HRAs that cover more than just deductibles or out-of-pocket costs—need to obtain a Health Plan ID number. Large plans (those with receipts over $5 million) must do so by Nov. 5 of this year; small plans (with receipts of $5 million or less) have an extra year, until Nov. 5, 2015.
For fully-insured health plan benefits, the insurers will obtain the HPID; but for any self-insured health plan benefits, the plan sponsor is responsible for obtaining the HPID. Because the application process has multiple steps and may take several days to complete, you should start the application process soon if your deadline is still this year.
The Department of Health and Human Services has posted a guide that summarizes the steps involved in obtaining an HPID
. Many of the steps require you to submit information to the Centers for Medicare and Medicaid Services (“CMS”) and wait for CMS to respond—which can take up to 24 hours at each step. The good news is that CMS has recently simplified the application process: although CMS originally required organizations to register both a “Submitter” to submit the application and an “Authorizing Official” to verify the request, it has streamlined the process to eliminate the need to have an Authorizing Official. This should result in a quicker turn-around for obtaining the HPID.
CMS has also recently provided additional clarity on how many HPIDs an employer may need to obtain. The HPID regulations distinguish between a “controlling health plan” and a “sub-health plan” and only require that the controlling health plan obtain an HPID. Employers that use a wrap plan arrangement that bundles multiple self-insured health benefit programs into one plan for 5500 filing purposes can treat the wrap plan as the “controlling health plan” and each component plan as a “sub-health plan.” Employers with one wrap plan need obtain only one HPID. Employers that have more than one wrap plan (for example, separate wrap plans for active employees and retirees) should plan to obtain a separate HPID for each wrap plan that provides self-insured health plan benefits.
The HPID regulations do not specify a particular penalty for failure to obtain an HPID, so the basic HIPAA penalty framework applies, with penalties of up to $50,000 per day of noncompliance, capped at $1.5 million per year. Thus, if your organization’s compliance deadline is Nov. 5, you should take steps promptly to apply for and obtain an HPID.
If you have questions about HPIDs, please contact April Goff (firstname.lastname@example.org
or 616.752.2154) or Norbert Kugele (email@example.com
or 616.752.2186) or any member of the Employee Benefits/Executive Compensation Practice Group.