Group Health Plans Must Obtain a Health Plan Identifier by November 5, 2014. Will Your Company Need to Take Action Now?
Kelley Drye Client Advisory
September 23, 2014

Pursuant to the Affordable Care Act (ACA), the Department of Health and Human Services (HHS) has issued final regulations requiring use of a unique health plan identification number (HPID) to identify health plans in standard transactions. Large group health plans must obtain an HPID by November 5, 2014. Small group health plans (i.e. those with $5 million or less in annual receipts) have until November 5, 2015 to obtain an HPID.

The Health Insurance Portability & Accountability Act of 1996 (HIPAA) identifies certain standard transactions for the electronic transfer of health care information. These standard transactions include the processing of claims, payments, enrollments, and authorizations. Beginning in 2016, under HIPAA and the ACA, covered entities, including health plans, must use certain information when conducting these standard transactions. Even though the HPID may not be required to be included in standard transactions now, health plans are nonetheless required to obtain an HPID by the deadlines described above. The Centers for Medicare & Medicaid Services (CMS) has provided instructional material on how to obtain an HPID at http://www.cms.gov/Regulations-and-Guidance/HIPAA-Administrative-Simplification/Affordable-Care-Act/Health-Plan-Identifier.html.

In recognition that health plans have diverse business structures, the final regulations differentiate between Controlling Health Plans (CHPs) that are required to obtain HPIDs and Subhealth Plans (SHPs) that may obtain HPIDs, but are not required to do so. A CHP is a health plan that controls its own business activities, actions or policies, or is controlled by an entity that is not a health plan (as in the case of a self-insured plan). In order for a CHP to have a SHP, the CHP must exercise sufficient control over the SHP to direct its business activities, actions or policies. Accordingly, a SHP is a health plan that has its business activities, actions, or policies directed by a CHP.

  • A CHP must obtain an HPID for itself and may obtain HPIDs for its SHPs or direct its SHPs to obtain one. Thus, a CHP may apply its own HPID on behalf of its SHPs or have them designate their own HPIDs.

  • A SHP is not required to obtain an HPID, but may obtain one on its own initiative, or as directed by a CHP.

If an employer sponsors a fully insured health plan, the insurance provider appears to be the CHP responsible for obtaining an HPID, and employers should confirm the provider has obtained an HPID. If an employer sponsors a self-insured health plan, the employer, as plan sponsor, is responsible for obtaining an HPID. If multiple health plans are wrapped under a single welfare plan, regulations appear to allow for a single HPID for all the plans or for each SHP to obtain its own HPID. Plan sponsors should consult their third-party administrators (TPAs) regarding which plans should apply for an HPID; some TPAs may be able to provide assistance in obtaining HPIDs.

Starting November 7, 2016, covered entities must use HPIDs to identify health plans in applicable standard transactions. In connection with using the HPID in standard transactions, health plans must fulfill compliance certification and attestation requirements with respect to certain standard electronic transactions by December 31, 2015 (December 31, 2016 for small health plans). The HHS is expected to track compliance with these requirements by referencing health plans’ HPIDs. More guidance on how to provide this certification is expected prior to the certification-attestation deadline. Sponsors of self-insured plans should contact their TPAs now to ensure the TPA will be responsible for the certification on behalf of the plan as the TPA is the entity carrying out the standard transactions and completing the certification process (which will involve testing standard transactions to ensure they meet HIPAA requirements) will likely be a lengthy process.

Please contact us if you have any questions regarding your HPID obligations.

Richard S. Chargar
(203) 351-8028
rchargar@kelleydrye.com

Pamela D. Kaplan
(212) 808-7980
pkaplan@kelleydrye.com

Victoria E. Anderson
(212) 808-7621
vanderson@kelleydrye.com