Medicare Secondary Payer Mandatory Reporting Requirements for Health Reimbursement Arrangements DELAYED

3/13/2009

CMS announced last week (March 5, 2009) that it has delayed the reporting of HRA coverage information until the fourth quarter of 2010 (October - December 2010). CMS granted this extension to give Responsible Reporting Entities (RREs) time to gather the necessary information to report on HRA coverage. CMS has said it will provide further instructions on reporting HRA coverage at a later date.

Employers and Third Party Administrators are relieved about the extension in reporting HRA information. Unlike some other group health plans, much of the information that has to be reported to CMS is not customarily collected or maintained by employers that sponsor, or by TPAs that administer, HRAs. For example, few HRAs collect specific information (e.g., SSNs) on covered spouses or dependents. And, even those HRAs that can collect the required information may find it difficult to report such information for each different type of "active covered individual" under the reporting rules.

The updated version of the CMS User Guide (available at www.cms.hhs.gov/MandatoryInsRep/Downloads/GHPUserGuide121708.pdf) explains how the reporting requirements apply to health FSAs, HSAs, HRAs, and stand-alone dental and vision care coverage. According to the updated version, health FSAs are not group health plans for MSP purposes. RREs need not include health FSAs when reporting to CMS. HSAs are not required to be reported either, so long as Medicare beneficiaries may not make current year contributions. In contrast, HRAs are considered to be group health plans for MSP purposes and must be reported. And while stand-alone dental and vision care coverage need not be reported, RREs are responsible for being aware of situations where dental or vision care services are covered by Medicare and should be paid primary to Medicare.

Discovery is actively working with the Employers Council on Flexible Compensation (ECFC) to provide information to CMS in the hope that HRAs will be excluded from the reporting requirement just like FSAs. We continue to monitor the situation closely and will share more information as it becomes known.

Categories: HRA