QUESTION: We’ve heard that employer-provided health plans are subject to Medicare Secondary Payer (MSP) mandatory reporting requirements. Does our company have to file a report for our health plans?
ANSWER: Certain insurers, TPAs, plan administrators, and fiduciaries must report information to CMS about individuals who are entitled to Medicare and covered under a group health plan. The purpose of the MSP mandatory reporting requirements (sometimes referred to as Section 111 reporting) is to help CMS determine whether a plan is primary to Medicare (that is, whether a plan pays first, and Medicare is a secondary payer). There are many technical details to these requirements, and extensive compliance guidance appears on a dedicated CMS website. The following highlights will help you determine whether your company has a filing obligation:
- Who must report? Responsibility for reporting falls upon the entity serving as an insurer or TPA for a group health plan, or, in the case of a self-insured, self-administered group health plan, a plan administrator or fiduciary. CMS refers to these entities as responsible reporting entities (RREs). The RRE is generally the insurer for an insured plan, although if an insurer does not process group health plan claims but has a TPA that does, the TPA is the RRE. If a group health plan is self-funded and self-administered for certain purposes, but also has a TPA, the TPA is the RRE. Thus, insurers or TPAs are routinely RREs; a limited number of employers (i.e., sponsors of self-insured, self-administered group health plans without TPAs) may also be RREs.
- What group health plans are affected? For mandatory reporting purposes, group health plans are generally defined in the same way as for MSP purposes, but with a few exceptions. Thus, reporting is required for insured and self-insured major medical plans but not for health FSAs, which are not considered group health plans for this purpose. CMS also does not require HSAs to be reported, so long as Medicare beneficiaries may not make a current year contribution to an HSA or did not contribute to an HSA while they were Medicare beneficiaries. In contrast, HRAs are generally considered to be group health plans that must be reported for MSP purposes, although there is a limited exception for certain “small-dollar” HRAs with an annual benefit below $5,000. Prescription drug coverage must be reported; stand-alone dental and vision coverage need not.
Entities that fail to comply with the MSP mandatory reporting requirements are subject to a civil monetary penalty ($1,474 as of August 2024) for each day of noncompliance for each individual for whom information should have been submitted. Regulations that apply beginning in October 2024 specify how and when penalties will be imposed.
For more information, see EBIA’s Group Health Plan Mandates manual at Sections XXIV.J (“MSP Mandatory Reporting Requirement”) and XXIV.K.5 (“Penalties for Failure to Comply With MSP Mandatory Reporting Requirements”). See also EBIA’s Self-Insured Health Plans manual at Section XXV.C (“Coordination of Benefits With Medicare, TRICARE, and Medicaid”), EBIA’s Consumer-Driven Health Care manual at Sections XXV.F (“HRAs and Medicare Secondary Payer (MSP) Requirements (Including Mandatory Reporting)”) and XVIII.D (“HSAs and Other Laws”), and EBIA’s Cafeteria Plans manual at Section XXII.J (“What Other Federal Laws Apply to Health FSAs?”).
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