October 13, 2011

Medicare Mandatory Reporting for HRAs: Increased Threshold Levels and Exhausted Account Balances

As a means of enforcing the Medicare Secondary Payer (MSP) Rules, the Centers for Medicare and Medicaid Services (CMS) impose a reporting requirement upon insurers, third party administrators, and plan administrators of self-funded, self-administered group health plans.  CMS considers health reimbursement arrangements (HRAs) to be a group health plan for purposes of the MSP rules; and thus, subject to the Medicare Mandatory Reporting Requirement (see prior Benefit Beat articles, Mandatory Medicare Reporting for HRAs Clarified, Aug, 2010, and Updated Information: Mandatory Medicare Reporting for HRAs, June, 2010). 

On September 27, 2011, CMS issued some clarifying guidance relating to the HRA reporting requirement:

  • Increased Threshold Levels.  HRAs have been subject to the reporting requirement if the HRA exceeds $1,000.  According to the recent guidance, this threshold is increased to $5,000, effective October 3, 2011, applicable to the HRA’s next reporting year.  This increased threshold should come as good news for certain stand-alone HRAs in that it may relieve them of certain reporting obligations.
  • Exhausted Account Balances.  This guidance provides that if an HRA is subject to the Medicare Mandatory Reporting Requirement, and if an individual has exhausted his/her benefit coverage under the HRA for the remainder of the coverage term, a termination notice must be filed with a Coordination of Benefits Contractor (COBC) in the next regularly scheduled MSP Input File Submission.  In the alternative, this notice may be provided by contacting the COBC call center (1-800-999-1118).  Once the individual account has been replenished in an amount exceeding $5,000, the reporting entity must then submit a new record reflecting the start date of the new coverage period.  This provision became effective September 27, 2011.


The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

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