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Health and Human Services (HHS) Issues Annual Adjusted Civil Monetary Penalties

The Department of Health and Human Services (HHS) recently announced their annual adjustments of civil monetary penalties that impact employer-sponsored health plans.

The latest adjustments are based on a cost-of-living increase of 2.04%. The following adjustments are effective for penalties assessed on or after October 11, 2018, for violations occurring on or after November 2, 2015.

Employers should ensure they are compliant with Health Insurance Portability and Accountability Act (HIPAA), Medicare secondary payer (MSP), and Summary of Benefits and Coverage (SBC) requirements as not to run the risk of being assessed these increased penalties.

Health Insurance Portability and Accountability Act (HIPAA) penalty violations:

  • Lack of knowledge: minimum penalty of $114 and maximum penalty of $57,051 per violation. The calendar-year cap is $1,711,533.
  • Reasonable cause and not willful neglect: minimum penalty of $1,141 and maximum penalty of $57,051 per violation. The calendar-year cap is $1,711,533.
  • Willful neglect that is corrected within 30 days: minimum penalty of $11,410 and a maximum penalty of $57,051 per violation. The calendar-year cap is $1,711,533.
  • Willful neglect that is not corrected within 30 days: minimum penalty of $57,051 and maximum penalty of $1,711,533 per violation. The calendar-year cap is $1,711,533.

Medicare Secondary Payer penalty violations:

  • An employer that offers incentives to Medicare-eligible individuals to encourage not enrolling in a plan that would otherwise be primary has a penalty of $9,239.
  • An employer that willfully or repeatedly fails to provide requested information regarding group health plan coverage incurs a penalty of $1,504.
  • An employer that fails to provide information identifying situations where the group health plan is primary incurs a penalty of $1,181.

Summary of Benefits and Coverage (SBC): The penalty for a health insurer’s or non-federal governmental health plan’s willful failure to provide a Summary of Benefits and Coverage (SBC) is $1,128.

Although these penalties have been in existence since 2015, the adjusted values can add up quickly and provide a strong incentive for compliance. To learn more about how the adjustments may impact your organization, reach out to your OneDigital consultant.

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