Marc Altneu is a local insurance consultant who specializes in employee and individual benefits. He can be reached at marc@mcmagency.com
On September 6, 2016, the Department of Health and Human Services (“HHS”) issued an interim final regulation that adjusts civil penalties for inflation. The interim final regulation does not follow the usual procedures that offer a notice and comment period. As such, a Notice of Proposed Rulemaking has not been issued and a comment period is not provided due to potential delay in the applicability of the regulation. The adjusted penalties are applicable to penalties assessed after August 1, 2016, whose associated violations occurred after November 2, 2015.
Employer Action:
Covered Entities subject to the HIPAA regulation must ensure proper application and compliance with HIPAA’s privacy andsecurity requirements. Furthermore, employers with a large Medicaid/Medicare employee eligible population should becautious not to offer incentives not to enroll in the employer’s health plan. Finally, employers should be aware of the Summaryof Benefits Coverage disclosure requirement and ensure employees receive SBCs in a timely fashion (e.g. open enrollment).
The following chart contains updated penalties applicable to group health plans only:
| Description | Current Penalty | Updated Penalty |
| Pre-February 18, 2009 violation of HIPAA
administrative simplification provisions | $100 per violation
$37,561 annual cap | $150 per violation
$37,561 annual cap |
| February 18, 2009 or later violation of HIPAA administrative simplification provision w/out knowledge | $100 min. $50,000 max. $1,500,000 annual cap | $110 min. $55,010 max. $1,650,300 annual cap |
| February 18, 2009 or later violation of HIPAA administrative simplification provision w/ reasonable cause and not to willful neglect | $1,000 min. $50,000 max. $1,500,000 annual cap | $1,100 min. $55,010 max. $1,650,300 annual cap |
| February 18, 2009 or later violation
of HIPAA administrative simplification
provision due to willful neglect AND
corrected during 30-day period | $10,000 min.
$50,000 max.
$1,500,000 annual cap | $11,002 min.
$55,010 max.
$1,650,300 annual cap |
| February 18, 2009 or later violation
of HIPAA administrative simplification
provision due to willful neglect AND NOT
corrected during 30-day period | $50,000 min.
$1,500,000 max.
$1,500,000 annual cap | $50,000 min.
$1,500,000 max.
$1,500,000 annual cap |
| Failure to Provide the Summary of
Benefits Coverage | $1,000 per day | $1,087 per day |
| Penalty for an employer or other entity
to offer financial or other incentive to
individual entitled to Medicare/Medicaid
benefits not to enroll under a group health
plan that would be primary | $5,000 | $8,908 |
Penalty for entity serving as insurer,
TPA, or fiduciary for a group health plan
that fails to provide information to HHS
Secretary identifying when the GHP was
primary payer to Medicare
| $1,000
| $1,138
|
|
|
