[Please label written and e-mailed comments about this section with the subject: EIN STANDARD.]
Section 142.602, Employer identifier standard, would contain the employer identifier standard. There is no recognized standard for employer identification as defined in the law. That is, there is no standard that has been developed, adopted, or modified by a standard setting organization after consultation with the National Uniform Billing Committee, the National Uniform Claim Committee, WEDI, and the American Dental Association. Therefore, we would designate a new standard.
We are proposing as the standard the employer identification number (EIN), which is assigned by the Internal Revenue Service (IRS), Department of the Treasury.
The EIN is defined in 26 CFR 301.7701-12. We would define “Employer identification number” (EIN) as 26 CFR 301.7701-12 does: “Employer identification number” is the taxpayer identifying number of an individual or other person (whether or not an employer) that is assigned pursuant to 26 U.S.C. 6011(b) or corresponding provisions of prior law, or pursuant to 26 U.S.C. 6109, and in which nine digits are separated by a hyphen, as follows: 00-0000000.
1. Selection criteria.
The implementation team used the criteria described in section I.B., Process for Developing National Standards, to evaluate the EIN as a candidate for the employer identifier standard.
Criteria #1, #2, #4, and #6 - The team found that the EIN met these criteria in that it is a nationally defined and assigned employer identifier and is the most widely used employer identifier in the United States.
Criteria #3 and #5 - The team found that the EIN met these criteria in that it is an identifier that is already in use in the Accredited Standards Committee (ASC) X12N Insurance Subcommittee electronic transactions that require an employer identifier, including the transactions used for the Health Claim, Enrollment and Disenrollment in a Health Plan, Eligibility for a Health Plan, and Health Plan Premium Payment.
Criterion #7 - The team found that the EIN met criterion #7 in that it is technologically independent of computer platforms and transmission protocols.
Criterion #8 - The team found that the EIN met criterion #8 in that it is a relatively short identifier that would fit into many existing formats.
Criterion #9 - The team found that the EIN met criterion #9 in that it is an identifier already assigned to each employer for tax identification purposes. Its adoption as a standard would not result in additional data collection or paperwork burdens on users.
Criterion #10 - The team found that the EIN met criterion #10 in that it is flexible enough to identify any employer, regardless of services, organization, or provider type.
2. Other identifiers.
We initially considered whether the PAYERID, the 9 position numeric identifier developed by HCFA as the unique identifier for health plans, could be used as the employer identifier. Since all employers are already enumerated by EIN, an entirely new employer identifier would require everyone to convert to a new identifier in addition to the EIN, which would still be used. Another key drawback to the use of the PAYERID as the employer identifier is the fact that the PAYERID numbering scheme does not have sufficient numbers available to enumerate all health plans and all employers. In addition, PAYERID’s data capabilities were developed based on the data requirements for health plans, which are not the same as those for employers. Based on these limitations, the team believed that the PAYERID would not meet criteria #1, #2, #4, #9, and #10 and would not be acceptable as a candidate for the employer identifier.
The EIN is the most widely used employer identifier in the claim, enrollment and disenrollment for a health plan, eligibility for a health plan and health plan premium payment transactions. The D-U-N-S number and the D-U-N-S+4 number, maintained by Dun & Bradstreet, are sometimes used to identify business entities including employers in these transactions (primarily in premium payment transactions), but the EIN is used to a far greater extent than any other identifier to identify the employer of a participant. Since the D-U-N-S and D-U-N-S+4 numbers were not widely used in the claim, the enrollment and disenrollment in a health plan, and the eligibility for a health plan transactions, the team believed that these numbers did not meet criteria #1, #2, #4, and #9 and were less appropriate than the EIN as candidates for the employer identifier.
Because of the widespread use of the EIN to identify the employer in health transactions, we selected the EIN as the national employer identifier standard for use in those electronic health transactions that require an employer identifier.
Since the IRS is responsible for issuing the EIN, we consulted with the IRS on the legality and feasibility of using the EIN as the standard employer identifier for electronic health transactions. On September 11, 1997, we forwarded our request for IRS concurrence, and on January 16, 1998, IRS concurred.
Although the EIN is not confidential, some employers may not wish to supply the EIN because it is their tax identifying number. We welcome comments on this issue and on any other possible problems that the use of the EIN would cause for employers or others who would need to obtain and use the EIN in their electronic health transactions.