Hunton Employment & Labor Perspectives

The Affordable Care Act required the Department of Health and Human Services (HHS) to establish a national health plan identifier (HPID) program under the HIPAA standard transactions rules. The resulting HHS rules generally require all HIPAA-covered entities, including self-insured plans with more than $5 million in annual claims, to obtain a HPID by November 5, 2014. Small self-insured health plans (i.e., those with annual claims of $5 million or less) will be required to obtain a HPID by November 5, 2015.

In addition, starting November 7, 2016, all health plans, and their third-party administrators or other service providers, will be required to use the plan’s HPID in all standard transactions to the extent the plan is identified in the transaction.

In general, the HPID requirements apply to all health plans that provide medical care (including dental and vision benefits, flexible spending accounts and employee assistance programs), but do not apply to on-site clinics. The basic requirements for obtaining HPIDs are as follows:

• Controlling Health Plan – In general, any health plan that qualifies as a “controlling health plan” (CHP) must obtain a HPID. A CHP is a health plan that either (i) controls its own business activities, actions or policies or (ii) is controlled by an entity that is not a health plan.
• Sub-Health Plan – The CHP’s HPID can be used by a “sub-health plan” (SHP), which is a health plan whose business activities, actions or policies are directed by a CHP.  A SHP (or its CHP) may, but is not required to, obtain a separate HPID for the SHP.

Thus, only one HPID would need to be obtained for a plan that includes a variety of health benefits (e.g., a “wrap” welfare benefit plan under which medical, dental and vision benefits and an employee assistance program are offered).

In addition, separate proposed HHS regulations provide that health plans generally must certify by no later than December 31, 2015 (December 31, 2016 for small health plans) that the underlying plan(s) comply with technical aspects of the standard transaction rules for certain standard transactions, which include eligibility determinations, enrollment, claims inquiries, premium payments and other transactions. Because these transactions are typically conducted by a plan’s business associates, the business associates’ assistance and involvement will likely be needed to comply. These rules have not yet been finalized, and HHS may modify the requirements in the final rules.

Information about the HPID application process can be found here.  The plan sponsor, and not a third party administrator or other service provider, must sign up to obtain the HPID for a covered plan.