NRPM: Standard Employer Identifier. Implementation of the Employer Identification Standard

06/16/1998

A. Obtaining an EIN

The Internal Revenue Service maintains the process for assigning EINs. A business can obtain an EIN by submitting, to the Internal Revenue Service, Internal Revenue Service Form SS-4, Application for Employer Identification Number. Any business that pays wages to one or more employees is required to have an EIN as its tax identifying number. A sole proprietor who has no employees and who files no excise or pension tax returns is the only business person who does not need to have an EIN as the tax identifying number. We believe that there would be few, if any, employers that would not have an EIN for tax identifying purposes. The EIN is currently the employer identifier in most widespread use in the health claim, the enrollment and disenrollment in a health plan, the eligibility for a health plan, and the health plan premium payment transactions. If they conduct administrative health transactions electronically, health care providers, health care clearinghouses, and health plans would have to obtain and use the EIN on all electronic transactions that require an employer identifier. Employers are not required by subtitle F of HIPAA to use the EIN or conduct standard electronic health transactions. However, we believe that many employers will find that it will be to their advantage and will choose to do so.

B. Organizations with Multiple EINs

We are aware that some organizations have more than one EIN. We seek comment from the public on whether it is important, in order to avoid confusion and achieve administrative simplification, that one of these EINs be used consistently in health transactions. If use of one EIN is desirable, how should it be chosen?

C. Approved Uses

Two years after adoption of this standard (3 years for small health plans) the EIN must be used as the employer identifier in the health-related financial and administrative transactions identified in section 1173(a) that require an employer identifier. The approved uses of the EIN are detailed in 26 U.S.C. 6109 (i.e., income tax purposes and for purposes of implementing certain provisions of the Food Stamp Act of 1977 and the Federal Crop Insurance Act). It may not be used in any activity otherwise prohibited by law. The use of the EIN for the purposes specified in this proposed rule is covered under the current approved uses for the EIN.

Examples of approved uses included in this proposed rule are:

  • Health care providers submitting health claims to health plans electronically would use the EIN to identify the employers of the participants in the health plan.
  • Employers would use their EINs to identify themselves in electronic transactions making health plan premium payments to health plans on behalf of their employees.
  • Employers and health care providers would use the EIN to identify the employer as the source or receiver of information about eligibility.
  • Employers would use their EINs to identify themselves in electronic transactions to enroll or disenroll their employees in a health plan.