IRS releases notice 2014-55

The IRS recently issued notice 2014-55

This notice expands the application of the permitted change rules for health coverage under a § 125 cafeteria plan (cafeteria plan). In particular, this notice addresses two specific situations in which a cafeteria plan participant may wish to revoke, during a period of coverage (commonly a plan year), the employee’s election for employer-sponsored health coverage under the cafeteria plan in order to purchase a Qualified Health Plan through a competitive marketplace established under § 1311 of the Patient Protection and Affordable Care Act, commonly referred to as an Exchange or a Health Insurance Marketplace (Marketplace). The first situation involves a participating employee whose hours of service are reduced so that the employee is expected to average less than 30 hours of service per week but for whom the reduction does not affect the eligibility for coverage under the employer’s group health plan. (This may occur, for example, under certain employer plan designs intended to avoid any potential assessable payment under § 4980H of the Internal Revenue Code.) The second situation involves an employee participating in an employer’s group health plan who would like to cease coverage under the group health plan and purchase coverage through a Marketplace without that resulting either in a period of duplicate coverage under the employer’s group health plan and the coverage purchased through a Marketplace or in a period of no coverage.

This notice permits a cafeteria plan to allow an employee to revoke his or her election under the cafeteria plan for coverage under the employer’s group health plan (other than a flexible spending arrangement (FSA)) during a period of coverage in each of those situations provided specified conditions are met. The Treasury Department and the IRS intend to modify the regulations under § 125 consistent with the provisions of this notice, but taxpayers may rely on this notice immediately.

To access the full notice click here.

Understanding the Health Plan Identifier Requirement

By now, most of us have heard about the HPID and if you’ve tried to ascertain if or how it applies to you or your client, you’ve come up with more questions than answers. 

Why an HPID?

In 2012 the Affordable Care Act required the adoption of a standard Unique Health Plan Identifier (HPID) to be used in covered HIPAA standard transactions.  There are currently many different health plan number combinations in regards to length, number and letter combination which can make identification a frustrating process.  The HPID ten-digit number will be a standardized number to identify a health plan.  HHS foresees a publicly accessible searchable database where these numbers can be looked up for billing information, eligibility, and other high level information. ¹ 

Part of the complexity with this rule includes an intentional ambiguity on the part of HHS.  The goal is for controlling health plans and subhealth plans to obtain an HPID in a way that best fits their business model. ²

Who needs an HPID and when?

Large Health Plans (receipts of $5M or greater) need to obtain their HPID by November 5^th, 2014.
Small Health Plans (receipts of less than $5M) need to obtain their HPID by November 5^th, 2015.
Full implementation for using HPID in standard transactions is November 7^th, 2016.³

The carriers for most Fully Insured health plans have or are releasing information about their plans to apply for an HPID.  Self-funded health plans need to apply for their own HPID if they meet the definition of a Controlling Health Plan as defined below. ⁴ 

Am I a Controlling Health Plan (CHP) or a Subhealth Plan (SHP)?

Controlling Health Plan (CHP): a health plan that—
1. Controls its own business activities, actions, or policies; or
2. Is controlled by an entity that is not a health plan; and if it has a subhealth plan, exercises sufficient control over the subhealth plan(s) to direct its/their business activities, actions, or policies.
If either or both of those statements apply to you, you meet the requirements of a Controlling Health Plan.

Subhealth Plan (SHP): a health plan whose business activities, actions, or policies are directed by a controlling health plan. ⁵
Subhealth Plans are not required to apply for their own HPID.  Their CHP may apply for an HPID for their SHP or require the SHP to apply for their own HPID. 

Commonly Asked Questions:

Q. I got my HPID number.  Now what?
A. The HPID will be used in HIPAA standard transactions so that health plans can be identified.

Q. The HPID Application asks for a Payor ID or NAIC number and I don’t have either?  What should I put in the field and will it cause issues with my application?
A. If you do not have a Payor ID or NAIC number, CMS has advised that an applicant fill in “not applicable” in the field.  It should not cause issues with your application.  If an issue does arise, contact the HIOS Help Desk at 1-877-343-6507 or email at insuranceoversight@hhs.gov.

Q. How long should the application take for me to complete?
A. There are 4 steps to the application and you will have to wait to receive approval after each step which can take up to 24 hours at this time. 

Q. Under the User Roles section of the application, am I a Submitter or an Authorizing Official?
A. There are 2 applicable HPOES user roles in regards to completing your HPID application.  You can only select to be one role at a time and both roles need to be filled by an applicable party.  If you register as a Submitter, you can enter the Authorizing Official’s information on a later screen.
Submitter User: A representative of a health plan or other entity that submits an application.
Authorizing Official User: A company executive that has the authority to approve applications, including CEOs and CFOs.

Additional Resources:
http://www.cms.gov/Regulations-and-Guidance/HIPAA-Administrative-Simplification/Affordable-Care-Act/Health-Plan-Identifier.html
http://www.ncvhs.hhs.gov/
https://portal.cms.gov/

 

Sources:

¹ Federal Register Vol. 77 No. 172; 45 CFR Part 162 II.2.C
² NCVHS Meeting Notes from 9/20/12
³ Federal Register Vol. 77 No. 172; 45 CFR Part 162 Chart 1
⁴ Federal Register Vol. 77 No. 172; 45 CFR Part 162 II.2.A.
⁵ Federal Register Vol. 77 No. 172; 45 CFR Part 162 II. A.

Virginia Governor Abandons Plan for Large Medicaid Expansion

Virginia Gov. Terry McAuliffe announced this week a plan to expand medicaid to around 25,000 uninsured Virginians.  This is a much smaller group than the 400,000 he had previous hoped to offer coverage.

For the Washington Post Article click here.