Medicare Secondary Payer (MSP) rules require that Medicare pay secondary to employer-sponsored group health plans when an active employee and their dependents are enrolled in both a group health plan and Medicare. For the Medicare program to properly coordinate benefits between Medicare and employer-sponsored group health plans, information must be provided from the plans to the Medicare program according to rules that many practitioners call MSP reporting rules.

Why are HRAs subject to MSP Reporting?

A health reimbursement arrangement (HRA) is a group health plan that generally* must pay primary to Medicare for a participant who’s enrolled in both your company’s HRA and Medicare (which makes them a dual-enrolled participant). In other words, if a dual-enrolled participant has a claim that is eligible under both the HRA and Medicare, the HRA must pay the claim according to the HRA plan rules and then Medicare can pay any remainder of the claim.

*The rule described above does not apply for inactive employees and their dependents. Inactive employees include retirees and former employees who are on COBRA for the HRA.

To identify situations where Medicare is the secondary payer to the HRA and to prevent improper Medicare payments, the federal Department of Health and Human Services (HHS) requires administrators of HRAs to report certain HRA coverage information every quarter.

Which HRAs get reported to HHS?

HRAs that need to get reported to HHS must meet all four requirements:

1. The HRA covers active employees and their dependents
2. The HRA covers benefits that Medicare also covers
3. The HRA benefit available to any individual covered under the HRA is $5,000 or more
4. The employer sponsoring the HRA has 20 employees or more*

*Employers with fewer than 20 employees may still need to provide their third-party administrator (TPA) with information for MSP reporting if an HRA enrollee is covered by Medicare due to end-stage renal disease (ESRD).

What information gets reported to HHS about HRA enrollees?

HHS requires several pieces of information about HRA enrollees to be reported every quarter, including but limited to:

• Name
• Date of birth
• SSN
• Effective date of HRA coverage
• Last date of employment (if employee terminated employment prior to losing HRA coverage)
• Employer size
• Employment status of employee
• Employer identification number (EIN).

Information must be submitted for enrollees, including dependents, who are age 45 or over. Younger enrollees must be reported if they are enrolled in Medicare.

Who collects and reports the HRA information to HHS?

According to the MSP reporting rules, Responsible Reporting Entities (RREs) must collect and report HRA information. For an HRA, the RRE is the HRA’s TPA (such as Employee Benefits Corporation). If the HRA is self-administered by the employer, the employer is the RRE.

What do employers need to do?

If an employer uses a TPA to administer their HRA, the employer’s main responsibility is to provide any information required by the RRE for MSP reporting that the RRE does not already have. This information may include information like employer size, dependent information, and last date of employment for employees.

If an employer does not use a TPA to administer their HRA, the employer is the RRE and must follow the MSP reporting rules to report HRA enrollee information to HHS.