employer connection


Health Plan Identifier update

The Health Plan Identifier Rule requires group health plans to get a health plan identifier (HPID) by November 5, 2014 and begin using it in HIPAA transactions by November 7, 2016. Blue Shield of California has obtained an HPID and is ready for the November 5, 2014 deadline. However, we understand that some of our ASOs and fully insured accounts are asking how to comply with the rule, as they are also required to do so.


The Affordable Care Act1 included a provision called Administrative Simplification, which broadens existing requirements under the Health Insurance Portability and Accountability Act (HIPAA) of 1996. The Health Plan Identifier Rule is part of this provision.

Administrative Simplification sets standards and operating rules for how issuers like Blue Shield of California and other covered entities interact with providers, particularly regarding electronic transactions of information. The goal of these requirements is to ultimately reduce costs by streamlining transactions and making existing standards work more efficiently.

The Health Plan Identifier

As part of the Administrative Simplification requirements, all entities who meet the definition of health plan must obtain an HPID.

The Administrative Simplification final rule (PDF, 611KB) regarding HPIDs includes new definitions that will be important to self-funded plans: controlling health plan and sub-health plan.
The rule states:

Controlling health plan (CHP) means a health plan that—
(1) Controls its own business activities, actions or policies; or
(2) [Meets the following conditions:]
(i) Is controlled by an entity that is not a health plan; and
(ii) If it has a sub-health plan(s) (as defined in this section), exercises sufficient control over the
sub-health plan(s) to direct its/their business activities, actions, or policies

Sub-health plan (SHP) means a health plan whose business activities, actions or policies are directed by a controlling health plan.

Self-funded and Shared Advantage plans

A self-funded plan is a health plan as defined by HIPAA. As a controlling health plan, self-funded plans will be required to obtain an HPID even if the plan does not conduct any of the electronic transactions and the HPID will not be used for this purpose. Based on our understanding, most self-funded plans will meet the definition of a CHP and need to obtain an HPID. The final rule indicates that the HPID may be used for any other lawful purpose, so it’s possible that federal agencies will require an HPID to be reported by self-funded plans for other purposes.

A self-funded plan that is an SHP plan may obtain an HPID but is not required to do so.

The deadline for obtaining an HPID is Nov. 5, 20142. To help health plans, the Centers for Medicare & Medicaid Services (CMS) created an HPID website that has information about the HPID, including videos and presentations. The site also includes details about the Health Plan and Other Entity Enumeration System (HPOES). This is the system a self-funded health plan will use to obtain an HPID. Self-funded plans that have specific questions are urged to contact their own legal counsel.

Fully insured groups

Fully insured groups that purchase health insurance through Blue Shield of California are not likely to be considered a health plan by HIPAA and are not required to obtain a Health Plan Identifier. If you are unsure if you qualify as a health plan as defined by HIPAA, guidance available (PDF, 259KB) on the CMS website.

Blue Shield of California’s response

As a Controlling Health Plan, Blue Shield of California must comply with these mandated requirements. We have obtained an HPID and are compliant with the November 5, 2014 date. We will not be applying for any HPIDs on behalf of any of our self-funded plans or fully insured groups.

The second part of the rule requires the use of the HPID in HIPAA standard transactions by November 2016. Blue Shield of California will be assessing the implementation of the HPID in the standard transactions in 2015.