The Department of Health and Human Services (HHS) has released the inflationary adjustments for noncompliance with HIPAA, the Medicare Secondary Payer (MSP) statute and for Summary of Benefits and Coverage (SBC) violations. These adjustments are effective for penalties assessed on/after August 8, 2024, for violations occurring on/after November 2, 2015. For full details, see the HHS announcement.
Health Insurance Portability and Accountability Act (HIPAA) Adjustments
HIPAA has four tiers for violations based on knowledge and culpability. The indexed amounts for violations of HIPAA administrative simplification provisions are as follows:
- Tier 1 Lack of Knowledge
- Minimum penalty of $141 per violation (up from $137).
- Maximum penalty of $71,162 per violation (up from $68,928).
- Calendar year cap of $2,134,831 (up from $2,067,813).
- Tier 2 Reasonable Cause and Not Willful Neglect
- Minimum penalty of $1,424 per violation (up from $1,379).
- Maximum penalty of $71,162 per violation (up from $68,928).
- Tier 3 Willful Neglect, Corrected Within 30 Days
- Minimum penalty of $14,232 per violation (up from $13,785).
- Maximum penalty of $71,162 per violation (up from $68,928).
- Tier 4 Willful Neglect, Not Corrected Within 30 Days
- Minimum penalty of $71,162 per violation (up from $68,928).
- Maximum penalty of $2,134,831 (up from $2,067,813).
All tiers have a calendar-year cap of $2,134,831 (up from $2,067,813).
Medicare Secondary Payer
The MSP statute prohibits group health plans of 20 or more employees from taking into account Medicare entitlement for purposes of the offer of coverage and prohibiting incentivizing eligible employees or their spouses and family members to choose Medicare over the group health plan. See the previous Leavitt Group article Can Employers Pay Employees’ Medicare Premiums? Well, it Depends. Violations for employer-sponsored health plans are as follows:
- Offering Incentives to Choose Medicare Over Primary Plan
- $11,524 (up from $11,162).
- Failure to provide information where group health plan pays primary (i.e., reporting data to the Centers for Medicare and Medicaid Service (CMS)
- $1,474 (up from $1,428).
Summary of Benefits and Coverage (SBC)
A Summary of Benefits and Coverage must be provided to plan participants and plan beneficiaries before enrollment in a group health plan. An SBC is a four-page, standard document that describes the costs of the plan. For full details on what is an SBC, see the prior Leavitt Group article Summary of Benefits and Coverage. The penalty for failure to provide an SBC is as follows:
- Willful failure is $1,406 (up from $1,362) per failure.
Conclusion
Compliance is an essential part of offering a health plan and noncompliance can result in penalties. It is important to work with your Leavitt Group Trusted Advisor to ensure you are aware of and complying with all of the various rules that may apply to your health plan. At Leavitt Group, we take compliance seriously and have a compliance department as an extension of your team to help you get and stay compliant.