Reminder Regarding CMS Mandatory Reporting of Employee and Dependent Information
As announced in the Compliance Alert dated November 25, 2008, the Centers for Medicare and Medicaid Services (CMS) now requires responsible entities to report certain employee and dependent information (including Social Security numbers) to support Medicare Secondary Payer (MSP) processes. While the responsibility of reporting falls mostly on insurers and third party administrators (TPAs), employers may also have a significant role in providing this information to CMS as it relates to group health plans, especially if their plans are self-funded. In addition, employers with non-group health plan arrangements are also subject to certain requirements. The following is a brief explanation of the CMS mandatory reporting requirements, including extended deadlines for group health plans and penalties for non-compliance.
Background
The purpose of the Medicare Secondary Payer program is to determine who should pay primarily and who should pay secondarily for claims of Medicare beneficiaries. In the past, this program utilized a voluntary data exchange program through CMS to determine whether the federal government or a group health plan should pay primarily. However, there were significant problems with this process, namely the inability to collect accurate information. In 2007, Congress passed Section 111 of the Medicare, Medicaid, and SCHIP Extension Act (MMSEA) to alleviate these problems.
Section 111 added new mandatory reporting requirements for group health plans (GHPs), liability insurance (including self-insurance), no-fault insurance, and workers’ compensation to submit certain participant information. This information includes subscriber and beneficiary names (and relationship to the subscriber), Social Security numbers (primary and dependent), type of insurance coverage, and reasons why the plans are primary for each employee.
Reporting for Group Health Plans
Effective January 1, 2009, insurers and/or third party administrators (TPAs) of group health plans (GHPs), as well as plan administrators of self-insured and self-administered plans, became required by CMS to report the above specified information. However, employers have become increasingly involved in this reporting process, even as it relates to fully insured plans, as many are being contacted by insurers and TPAs requesting participant information. In addition, renewal applications and other enrollment documents have been revised to now include requirements for employee and dependent Social Security numbers.
Responsible entities should be aware that the deadline for submitting records with Social Security numbers for spouses and other dependents whose initial date of coverage is prior to January 1, 2009, has been extended by one year. Thus, this information must be submitted in the first quarter of 2011.
Health reimbursement accounts (HRAs) are considered group health plans and must be reported; however, the deadline for reporting information on enrollees in HRAs has been delayed until fourth quarter of 2010.
Plan administrators and fiduciaries of GHPs that are self-insured and self-administered are responsible for meeting these deadlines and reporting requirements. Resources for assistance, including a user guide on how to comply with these reporting requirements, can be found on the CMS website at www.cms.hhs.gov/MandatoryInsRep.
Reporting for Non-Group Health Plan Arrangements
The Section 111 reporting requirements also apply to the non-group health plan (non-GHP) arrangements of liability insurance (including self-insurance), no-fault insurance, and workers’ compensation where the injured party is a Medicare beneficiary. If the non-GHP arrangement is fully insured, the insurer is responsible for reporting; however, if the non-GHP is self-insured (even if claims are processed by a TPA), the employer is responsible for reporting. In order for a claim of a Medicare beneficiary to be reportable, it is only necessary that the initial claim relate to a personal injury or product liability claim. Reporting for non-GHP arrangements begins in 2010.
Penalties for noncompliance
Failure to report the required information may subject the reporting entity to civil monetary penalties up to $1,000 for each day of noncompliance for each individual for which data is required. These penalties apply to both the GHP and non-GHP arrangement reporting requirements.
For additional information about the reporting requirements for GHPs, please click here. For more information about the non-GHP arrangement reporting requirements, please click here. If you have any additional questions, please contact our office at 919-403-1986.
Important Notice: Hill, Chesson & Woody does not engage in the practice of law, accounting, or medicine. Therefore, the contents of this communication should not be regarded as a substitute for legal, tax, or medical advice.
October 30, 2009
Hill, Chesson & Woody Employee Benefit Services
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Chapel Hill, NC 27517
Phone: 919.403.1986
Fax: 919.869.2063
www.hcwbenefits.com