If an employer is self-insured and the employer contracts out the administration of its employer group health plan to a third party administrator (TPA) and directly submits electronic enrollment information to the TPA, does the employer have to submit the enrollment in the standard format?
Under the Employee Retirement Income Security Act of 1974, an employer group health plan has a legal identity that is separate from the employer. If the employer has contracted with the TPA to administer the employer group health plan, the TPA is serving as the business associate of a covered entity (the health plan). Therefore, assuming the health plan is in compliance, the TPA would be required to follow the same rules that are applicable to the health plan.
The enrollment in a health plan transaction is defined at 45 CFR 162.1502 as the transmission of subscriber enrollment information to a health plan to establish or terminate insurance coverage. The submission of enrollment information from the employer to the employer health plan's TPA does meet the definition of the enrollment transaction. However, employers are not covered entities under HIPAA, and they are not required to follow the standards. Therefore, the transmission of subscriber information from the employer to the TPA need not follow the standard.