ERIC News Release
For Immediate Release: April 4, 2014
Washington, D.C. – The ERISA Industry Committee (ERIC) on April 3 urged the Department of Health and Human Services (HHS) to modify proposed rules that would require employer group health plans to certify compliance with standards and operating rules adopted under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) for certain electronic transactions.
The proposed regulations would require employer group health plans to certify compliance with standards and operating rules adopted under HIPAA for electronic transactions relating to eligibility for a health plan, health care claim status, and health care electronic funds transfers and remittance advice -- the “Covered Transactions.”
In particular, ERIC urges HHS to modify the rules to provide that self-funded plans should be able to comply with the certification requirement by confirming to HHS that they conduct Covered Transactions exclusively through one or more entities that either (1) are covered entities themselves, and thus are directly required to comply with the HIPAA transaction standards, or (2) have agreed contractually that they will comply with the transaction standards.
ERIC’s letter argues that this approach would minimize unnecessary costs in accordance with the Obama Administration’s Executive Orders directing agencies to balance additional costs of regulations on companies with a corresponding benefit to the system, as many vendors and insurance companies are already required to comply with the rules.
“Despite Congress’s desire to reduce costs, the approach taken in the proposed regulations would impose significant costs on self-insured plans that hire vendors to perform Covered Transactions without generating a corresponding benefit,” said ERIC President Scott Macey. He adds that, “As these vendors typically deal with the Covered Transactions on behalf of self-insured plans, they are in the best position to make the kinds of attestations or certifications required by the proposed regulations.”
In addition, ERIC suggests that programs that provide only limited health benefits, such as Employee Assistance Plans (EAPs) and excepted benefits, should not be subject to these rules.
The letter also requests that the rules be clarified to take into account the special nature of self-insured plans. To that end, ERIC suggests that:
- HHS clarify that the number of individuals used to calculate the penalty should be based only on the number of individuals covered by or enrolled in insurance policies that are major medical policies.
- The number of covered lives to be provided to HHS should be as of a prior fixed date, rather than the date that the required documentation is submitted.
- Self-insured plans should be treated similarly to government entities for purposes of the certification fee.
ERIC’s letter underscores that plan sponsors have been actively working for the past several years in complying with all of the requirements imposed by the Affordable Care Act, and that the additional burdens imposed by the proposed regulations are particularly problematic for self-insured plans.
The letter further explains that, given the lack of guidance in the proposed regulations, it is difficult for ERIC to provide meaningful feedback as to the areas that need clarification.
“If HHS insists on maintaining the current structure of the proposed regulations, then ERIC urges HHS to re-propose the regulations with language that clearly reflects the manner in which these requirements would apply to self-insured plans, if at all, and the standard for “end-to-end testing”; and provide for an extended deadline for compliance,” Macey concludes.
ERIC’s letter can be accessed by clicking on the link below.