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Update on MSP Reporting Requirements for HRAs - September 30, 2011

Yesterday CMS published an alert notifying group health plans that it is changing the Medicare Secondary Payer reporting requirements for HRAs by increasing the threshold at which an HRA is required to participate in MSP reporting from $1,000 to $5,000. HRA coverage that reflects a benefit of less than $5,000 per year (including any roll-over contributions from the previous year) will not be required to report MSP data effective with the start of the HRA's first plan year on or after October 3, 2011. While this is good news for HRA sponsors with lower thresholds, HRA sponsors should note that the reporting exemption does not mean that HRAs with annual benefits of less than $5,000 are exempt from the general MSP payment policies and it will not change the primary payer status of the HRA coverage. 


The alert also notifies HRAs required to participate in MSP reporting of a new reporting requirement. A notice of termination must be submitted when an insured has exhausted his/her HRA balance and no additional funds will be added for the remainder of the coverage year.