Plans That Don’t Conduct Standard Transactions Should Be Exempt From Certification Of HIPAA Compliance, Group Suggests

Controlling health plans (CHP) that are not engaged in standard transactions should be exempt from the certification of Health Insurance Portability and Accountability Act of 1996 (HIPAA) compliance, according to recent comments from the American Benefits Council (Council) on the Department of Health and Human Services’ (HHS) proposed rule on administrative simplification.

The Council also requests that employee benefit plan arrangements, such as flexible spending arrangements (FSAs), health care reimbursement accounts (HRAs), and health savings accounts (HSAs), be exempted from the certification requirements under the proposed regulations even if they otherwise meet the definition of a CHP.

Proposed rule. The proposed rule establishes certification requirements that are intended to align with the requirements and timelines under the Unique Health Plan Identifier Final Rule (HPID Final Rule). Specifically, the proposed rule would require certification at the CHP level. All CHPs must meet the certification submission requirements. The preamble to the HPID Final Rule clarified that self-insured employer group health plans meet the HIPAA definition of “health plan.”

Self-insured group health plans. The Council notes that under the proposed rule, all health plans that meet the definition of a CHP are required to meet the certification requirements whether or not they actually conduct any standard transactions. The rule does not explicitly address the responsibilities of the self-insured plan and the plan administrator with respect to meeting certification requirements in those cases. But in the vast majority of these situations, the self-insured group health plan is not self-administered and does not engage in standard transactions, but utilizes third parties to administer the plan, including carrying out any covered transactions.

“A self-insured group health plan can impose obligations necessary to fulfill the certification requirement only through its arrangement with those third parties that actually carry out standard transactions in the administration of the plan, and the multiplicity of such arrangements could make the effort both time-consuming and burdensome,” the Council wrote.

As such, the Council requests that final regulations clarify that CHPs that are not engaged in standard transactions are exempt from the certification requirements under the proposed rule.

Health spending arrangements. Likewise, employee benefit plan arrangements, such as FSAs, HSAs, and HRAs, typically have no standard transactions between covered entities, by the plan itself or through vendors. The Council requests that such plans also be exempted from the certification requirements. If not exempted, the Council requests that HHS provide specific guidance for how plans are expected to provide a certification and also provide a simplified method for obtaining such certification.

Visit our News Library to read more news stories.