Some group health plans will use or maintain protected health information, particularly group health plans that are self-insured. Also, some plan sponsors that perform administrative functions on behalf of their group health plans, may need protected health information. The final rule permits a group health plan, or a health insurance issuer or HMO that provides benefits on behalf of the group health plan, to disclose protected health information to a plan sponsor who performs administrative functions on its behalf for certain purposes and if certain requirements are met. The plan documents must be amended to: describe the permitted uses and disclosures of protected health information by the plan sponsor; specify that disclosure is permitted only upon receipt of a certification by the plan sponsor that the plan documents have been amended and the plan sponsor agrees to certain restrictions on the use of protected health information; and provide for adequate firewalls to assure unauthorized personnel do not have access to individually identifiable health information.
Some plan sponsors may need information, not to administer the group health plan, but to amend, modify, or terminate the plan. ERISA case law describes such activities as settlor functions. For example, a plan sponsor may want to change its contract from a preferred provider organization to a health maintenance organization (HMO). In order to obtain premium information, the plan sponsor may need to provide the HMO with aggregate claims information. Under the rule, the plan sponsor can obtain summary information with certain identifiers removed, in order to provide it to the HMO and receive a premium rate.
The Department assumes that most plan sponsors who are small employers (those with 50 or fewer employees) will elect not to receive protected health information because they will have little, if any, need for such data. Any needs that plan sponsors of small group health plans may have for information can be accomplished by receiving the information in summary form. The Department has assumed that only 5 percent of plan sponsors of small group health plans that provide coverage through a contract with an issuer will actually take the steps necessary to receive protected health information. This is approximately 96,900 firms. For these firms, the Department assumes it will take one hour to determine procedural and organization issues and an additional 1/3 hour of an attorney's time to make plan document changes, which will be simple and essentially standardized. This will cost $7.1 million.
Plan sponsors who are employers of medium (51-199 employees) and large (over 200 employees) firms that provide health benefits through contracts with issuers are more likely to want access to protected health information for plan administration, for example to use it to audit claims or perform quality assurance functions on behalf of the group health plan. The Department assumes that 25 percent of plan sponsors of medium sized firms and 75 percent of larger firms will want to receive protected health information. This is approximately 38,000 medium size firms and 27,000 larger firms. To provided access to protected health information by the group health plan, a plan sponsor will have to assess the current flow of protected health information from their issuer and determine what information is necessary and appropriate. The plan sponsors may then have to make internal organizational changes to assure adequate protection of protected health information so that the relevant requirements are met for the group health plan. We assume that medium size firms will take 16 work hours to complete organizational changes, plus one hour of legal time to make changes to plan documents and certify to the insurance carrier that the firm is eligible to receive protected health information. We assume that larger firms will require 32 hours of internal organizational work and one hour of legal time. This will cost $52.4 million and is a one-time expense.