Below are some to-dos for sponsors of self-funded group health plans. The information is limited generally to the "what" and the "when." For a summary of the PPACA provisions that apply to group health plans and whether the provision applies to self-funded plans, request UBA's PPACA Decision Guide for Self-funded Plans.
1. HIPAA Risk Assessment and Training
A self-funded group health plan is a covered entity under the Health Insurance Portability and Accountability Act (HIPAA). The HIPAA Privacy and Security Rules provide a baseline of protections for use and disclosure of individually identifiable health information held by covered entities and their business associates. The Privacy Rule gives individuals rights regarding that information; the Security Rule specifies administrative, technical, and physical safeguards for covered entities and their business associates. Employers sponsoring self-funded group health plans should, at a minimum, conduct and document a HIPAA Risk Assessment and train employees on the procedures and protocols that the company has in place to address the findings of the HIPAA assessment.
Employers should also review their state laws. Some states have more stringent requirements. For example, Texas law requires employees of covered entities to have HIPAA training within 30 days of employment and then ongoing training every two years.
2. Update the Plan's BAAs
Plan sponsors of self-funded group health plans need to be sure their business associate agreements (BAAs) have been amended to meet the requirements of the Health Information Technology for Economic and Clinical Health (HITECH) Act by September 22, 2014. A "business associate" is a person or entity who performs functions or activities on behalf of, or provides certain services to, a covered entity that involve access by the business associate to protected health information and includes subcontractors that create, receive, maintain, or transmit protected health information on behalf of another business associate.
Sponsors should verify that a compliant BAA is in place between the plan and the plan's third party administrator (TPA), broker, and other vendors which meet the definition of business associate.
For more information, see the guidance for BAAs from the U.S. Department of Health and Human Services (HHS).
3. Apply for the Plan's HPID
The Patient Protection and Affordable Care Act (PPACA) and HIPAA require that self-funded health plans obtain and use a 10-digit health plan identifier (HPID) in certain transactions. The purposes of requiring HPIDs include:
- Reducing administrative costs by adopting a uniform set of operating rules for each covered transaction;
- Simplifying routing, reviewing, and paying electronic transactions; and
- Reducing manual errors and manual intervention.
The HPID must be used by health plans, or their business associates, when conducting electronic "standard transactions" beginning November 7, 2016. Large health plans (those with more than $5 million in claims paid for the prior plan year) must obtain an HPID by November 5, 2014. Small health plans (those with less than $5 million in claims paid for the prior plan year) have until November 5, 2015, to obtain an HPID.
Please note: The plan's TPA may not obtain the HPID for the plan.
4. Filing and Payment of Transitional Reinsurance Fee
PPACA established the transitional reinsurance fee (TRF). The funds generated by the TRF will help stabilize premiums in the individual insurance market. The TRF applies to self-funded major medical plans for 2014, 2015, and 2016. (Insurers pay the fee on fully insured medical plans.)
Plan sponsors of self-funded plans must report the number of covered lives and pay the fee to the federal government at www.pay.gov. The filing of the number of covered lives is due by November 15, 2014. While the form is not yet available, sponsors should decide which is the most beneficial method for determining the number of covered lives. The plan's TPA may assist with the calculation and pay the applicable fee on behalf of the plan sponsor.
Plan sponsors may pay the fee in one installment, by January 15, 2015, January 15, 2016, and January 15, 2017, or in two installments each year. If paid in installments, the larger installment will be due January 15 and the smaller installment will be due November 15. For example, if the 2014 fee is paid in installments, $52.50 per person will be due January 15, 2015, and $10.50 per person will be due November 15, 2015.
5. Section 6055 and Section 6056 Reporting
Beginning in 2016, carriers, self-funded employers, applicable large employers (ALEs), and individuals will be responsible for reporting coverage information based on the 2015 plan year. In order for the IRS to verify that individuals and employers are meeting their shared responsibility obligations, and that individuals who request premium tax credits are entitled to them, employers and insurers will be required to provide reporting on the health coverage they offer.
All ALEs will complete Part I and Part II of IRS Form 1095-C for each employee, regardless of whether the employee was eligible for coverage during the reported year. Self-funded ALEs will complete Part III - covered individuals. Part III requires the employer to report for each covered individual the covered individual's name, Social Security number (SSN), and date of birth if the SSN is unavailable.
The reporting will occur with the same timing and process as W-2 and W-3 reporting. Even though these forms are not final, employers may want to study them as they begin to determine whether they are currently collecting, and will be able to retrieve, the information needed to complete the forms.