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On October 6, 2023, the Department of Health and Human Services (HHS) released inflation-related penalty adjustments for violations of the Health Insurance Portability and Accountability Act (HIPAA), Affordable Care Act (ACA), and the Medicare Secondary Payer (MSP) rules.
These adjusted amounts apply to penalties assessed on or after October 6, 2023, for any violations occurring on or after November 2, 2015.
Health Insurance Portability and Accountability Act (HIPAA)
The penalty amounts related to the HIPAA privacy and security rules are broken down into a four-tiered structure
based on the violator’s intention level.
ACA: Summary of Benefits and Coverage (SBC)
The ACA requires plan sponsors and insurers to provide SBCs to eligible employees and their beneficiaries before enrollment (or re-enrollment) in a group health plan. The maximum penalty for failing to provide an SBC to covered individuals increases to $1,362 (from $1,264).
Medicare Secondary Payer (MSP)
The MSP rules prohibit employers and insurers from offering Medicare beneficiaries financial or other incentives that encourage these beneficiaries to waive or terminate group health plan coverage that would be primary to Medicare. The maximum penalty for failing to comply with these MSP rules increased to $11,162 (from $10,360). Additionally, the maximum penalty for failing to inform HHS when a group health plan is or was primary to Medicare increased to $1,428 (from $1,325).
What Employers Should Do Next
To avoid these penalties, employers should review their plan documents and operations, ensuring compliance with the above HHS-related requirements.
This information has been prepared for UBA by Fisher & Phillips LLP. It is general information and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.
