HHS has introduced changes of civil financial penalties for statutes inside its jurisdiction. The most recent quantities are primarily based on a cost-of-living enhance of 1.06222%. These changes are efficient for penalties assessed on or after March 17, 2022, for violations occurring on or after November 2, 2015. Listed here are highlights of the changes probably affecting employer-sponsored well being plans:
HIPAA Administrative Simplification. HIPAA administrative simplification encompasses requirements for privateness, safety, breach notification, and digital well being care transactions. HIPAA has 4 tiers of violations that replicate rising ranges of culpability, with minimal and most penalty quantities inside every tier and an annual cap on penalties for a number of violations of an equivalent provision. The listed penalty quantities for every violation of a HIPAA administrative simplification provision are as follows:
Tier 1—lack of expertise: The minimal penalty is $127 (up from $120); the utmost penalty is $63,973 (up from $60,226); and the calendar-year cap is $1,919,173 (up from $1,806,757).
Tier 2—affordable trigger and never willful neglect: The minimal penalty is $1,280 (up from $1,205); the utmost penalty is $63,973 (up from $60,226); and the calendar-year cap is $1,919,173 (up from $1,806,757).
Tier 3—willful neglect, corrected inside 30 days: The minimal penalty is $12,794 (up from $12,045); the utmost penalty is $63,973 (up from $60,226); and the calendar-year cap is $1,919,173 (up from $1,806,757).
- Tier 4—willful neglect, not corrected inside 30 days: The minimal penalty is $63,973 (up from $60,226); the utmost penalty is $1,919,173 (up from $1,806,757); and the calendar-year cap is $1,919,173 (up from $1,806,757). [EBIA Comment: It is unclear why HHS continues to use the $1,500,000 base for the calendar-year caps for Tiers 1–3 since the enforcement discretion announced in April 2019 significantly reduces the unindexed penalty amounts for those tiers (see our Checkpoint article). Additional steerage from HHS can be welcome.]
Medicare Secondary Payer. The Medicare Secondary Payer statute prohibits a gaggle well being plan from “considering” the Medicare entitlement of a present worker or a present worker’s partner or member of the family and imposes penalties for violations. The listed quantities for violations relevant to employer-sponsored well being plans are as follows:
Providing incentives to Medicare-eligible people to not enroll in a plan that will in any other case be major: $10,360 (up from $9,753).
Failure of accountable reporting entities to supply data figuring out conditions the place the group well being plan is major: $1,325 (up from $1,247).
Abstract of Advantages and Protection (SBC). An SBC usually have to be supplied to contributors and beneficiaries earlier than enrollment or re-enrollment in a gaggle well being plan. The penalty for a well being insurer’s or non-federal governmental well being plan’s willful failure to supply an SBC is $1,264 (up from $1,190) for every failure.
EBIA Remark: The annual changes to penalties are designed to protect their deterrent impact within the face of inflation. HHS’s “annual” changes are purported to made by January 15 of every 12 months, however in follow have come at irregular intervals. The previous adjustment was simply made on November 15, 2021 (see our Checkpoint article)—HHS missed the January 15 deadline in 2021 and 2022. (Notice that ERISA plans are topic to yearly adjusted DOL penalties (see our Checkpoint article).) For extra data, see EBIA’s HIPAA Portability, Privateness & Safety handbook at Part XX.E (“Civil Financial Penalties”). See additionally EBIA’s Group Well being Plan Mandates handbook at Part XXIV.Okay (“Medicare Secondary Payer (MSP) Necessities: Enforcement”), EBIA’s Well being Care Reform handbook at Part XVI.I (“Penalties of Failing to Present the SBC”), and EBIA’s Self-Insured Well being Plans handbook at Part XXVIII.C (“Abstract of Advantages and Protection (SBC)”).
Contributing Editors: EBIA Employees.
