November 2, 2011
If a participant in a Health Reimbursement Arrangement ("HRA") is reimbursed his or her entire allocated benefit amount for the plan year before the end of the plan year, does the "responsible reporting entity" ("RRE") have to report such termination of coverage to the Coordination of Benefits Contractor ("COBC") under the Medicare Secondary Payer Mandatory Reporting?
Yes. In an Alert released on September 27, 2011, the CMS Office of Financial Management/Financial Service Group indicated that a notice of termination has to be submitted to the COBC when an HRA insured’s HRA benefit coverage is exhausted and no additional funds will be added to the HRA for the remainder of the current plan year for the HRA. A notice of the termination is to be provided to the COBC by including it in the RRE’s next regularly scheduled MSP Input File Submission. The RRE may also call the COBC Call Center, at 1-800-999-1118 (TTY/TDD 1-800-318-8782), with the notice of the termination.
This new notice of termination requirement replaces language in Section 7.2.7 on page 67 of Version 3.2 of the GHP User Guide which had stated that a RRE was not required to submit a Termination Notice when the annual benefit value was exhausted, or only when coverage was not continued or not renewed in the subsequent plan year.
In the next plan year when the participant is provided with an additional annual benefit amount, the RRE must submit a new record on the MSP Input File for each Medicare beneficiary that is an active covered individual and whose HRA annual benefit is $5,00 or greater. The effective Date (Field 10) should reflect the start date of the new coverage period.
Please remember that effective October 3, 2011, only HRA coverage that reflects an annual benefit level of $5,000 or more is to be reported under the Medicare Secondary Payer Reporting Provisions.
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