Health & Welfare Notes
Vol. 19, Issue 3 July/August 2014
Reminder: Medicare Part D Notice Due October 15, 2014. Plan sponsors whose health care plans include prescription drug benefits must notify Medicare-eligible plan participants by October 15 of each year whether their prescription drug benefit is “creditable coverage,” meaning that it is expected to cover, on average, as much as the standard Medicare Part D prescription drug plan. The Centers for Medicare & Medicaid Services (CMS) requires that a notice be sent prior to the start of the Medicare Part D Annual Election Period, which is October 15 to December 7 each year for coverage beginning January 1. The Creditable Coverage Notice must be given to all Part D-eligible individuals who are covered under, or apply for, an employer’s prescription drug benefits plan, including active employees and those who are retired, if applicable, as well as Medicare beneficiaries who are covered as spouses under active or retiree coverage. The CMS Creditable Coverage website (http://www.cms.hhs.gov/CreditableCoverage/) provides complete text of the guidance and sample disclosure notices. [Excerpt from article by SHRM Online staff 8/1/2004]
Health Plan Identifier Due by November 5, 2014 for Large Group Health Plans. As part of the government’s ongoing efforts to standardize health plans’ electronic transactions, all group health plans are required to obtain a health plan identifier (“HPID”). Operationally, the HPID is a unique, ten digit number identifier that will be used in the transmission of health data. Common electronic health data transactions requiring a HPID include payments, claims, and remittances.
For this purpose, a health plan is any plan that engages in electronic transactions, which may include major medical plans, dental plans and vision plans. If a plan is fully‑insured, then the insurance carrier is responsible for obtaining the HPID. If a plan is self‑insured, then the plan sponsor must obtain the HPID. If a plan sponsor’s health plan has both fully‑insured and self‑insured options, or has multiple self‑insured options, then the plan sponsor is permitted to either obtain one HPID for the “controlling health plan,” which ID then would apply for all of the self‑insured options, or it may obtain a separate HPID for each self‑insured option. At this point, there seems to be no benefit in obtaining multiple HPIDs for each self‑insured option, unless the plan’s third‑party claims administrator desires to use separate IDs for administration or tracking purposes.
While the deadline for obtaining the HPID varies depending on whether the plan is a small or large group health plan, there is a uniform implementation date for using the HPID in standard transactions, as follows:
Compliance Date for Obtaining HPID: November 5, 2014 for large health plans & November 5, 2015 for small health plans (a plan that pays less than $5million in benefits per year).
Implementation Date for Use of HPID in Standard Transactions: November 7, 2016 for both large and small health plans.
Presumably, any claims administrator or other business associate performing standard transactions on behalf of the plan will ask the plan sponsor for the ID if and when needed.
To obtain the HPID, plans sponsors will need to use the “Health Plan and Other Entity Enumeration System” (HPOES), an electronic system maintained by the Department of Health and Human Services (“HHS”). The CMS Health Plan Identifier web page has helpful information, including step‑by‑step instructions explaining how to apply for a HPID, instructional videos, and PowerPoints from prior CMS presentations. [Foley & Lardner LLP, Legal News, August 26, 2014]
Reporting Requirement for ACA Transitional Reinsurance Fee Due By November 15, 2014. Section 1341 of the Affordable Care Act establishes a transitional Reinsurance Program to help stabilize premiums for coverage in the individual market during the years 2014 through 2016. The statute requires all health insurance issuers and third‑party administrators on behalf of self‑insured group health plans (that offer major medical coverage) to make contributions under this program to cover costs for high‑cost individuals enrolled in non-grandfathered reinsurance-eligible individual market plans. Final regulations issued by the Department of Health and Human Services (HHS) implementing the Reinsurance Program specify that self‑insured group health plans are liable for the contributions, although a plan may utilize a third‑party administrator or administrative‑services‑only contractor for transfer of the contributions (otherwise referred to as the reinsurance fee). The reinsurance fee for 2014 equals $63.00 times the number of individuals covered by the plan. Like the PCORI fee, there are four different counting methods permitted to determine the average number of covered lives (enrolled employees, dependents, retirees, and COBRA-qualified beneficiaries who are not also covered by Medicare). The four counting methods are similar to the PCORI fee methods; however, the reinsurance fee count is based on the calendar year and not the plan year. The counting methods generally calculate covered lives based on enrollment in the first nine months of the calendar year, except if the Form 5500 counting method is used.
HHS is implementing a streamlined approach to complete the contributions (fee) process through Pay.gov. To successfully complete the reinsurance contribution process, contributing entities, or third party administrators or ASO contractors on their behalf, must register on Pay.gov. To pay the fee, the first step is to go to Pay.gov and access the “ACA Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form.” [Note: As of the date of this publication, the form was not yet available.] You will enter the total number of covered lives on this form, designate the counting method used, list the names of the plans being covered by the form, and provide any other required information. HHS will then auto‑calculate the amount of the transitional reinsurance fee due for the year based on the number of covered lives reported, and notify the contributing entity of the amount due. The contributing entity will then schedule payment for the calculated fee on the payment page. For the 2014 benefit year, HHS will offer contributing entities the option to pay: (1) the entire fee for 2014 in one payment no later than January 15, 2015 reflecting $63.00 per covered life; or (2) in two separate payments: the first payment due by January 15, 2015 reflecting $52.50 per covered life; the second payment due by November 15, 2015 reflecting $10.50 per covered life. [CMS.gov]
HIPAA Certificates of Creditable Coverage will no longer be required beginning January 1, 2015. Health plans had to provide these certificates to individuals losing health coverage so the individuals could prove they had creditable health coverage, reducing or eliminating any preexisting condition exclusion periods in the next health plan they joined. Starting with plan years beginning on or after January 1, 2014, the ACA prohibited preexisting exclusion periods for all health plans (grandfathered and nongrandfathered). As a result, no certificates of creditable coverage need to be issued on or after December 31, 2014.
Health plans should continue providing these certificates to individuals whose coverage terminates before December 31, 2014, in case anyone needs to offset a preexisting condition exclusion when joining a noncalendar health plan during a plan year that began before January 1, 2014. [Excerpt from Word on Benefits Blog by Lois Mathis-Gleason, CEBS, August 12, 2014]
Disclaimer – This newsletter’s purpose is to inform our clients and friends of recent legislative health care-related developments. It is not intended, nor should it be used, as a substitute for specific legal advice.
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Health and Welfare Notes is prepared four to six times annually and will accompany Retirement News. If there are questions concerning the information discussed, call richard Gabriel associates and ask for Gabe Zinni, Karen Irwin, Cindy Swartz or Nancy Cunningham.