Frequently Asked Questions About the National Standard Employer Identifier (EIN)
1. Why is a standard employer identifier needed for electronic health transactions?
Employers, as sponsors of health insurance for their employees, often need to be identified in health care transactions, and a standard identifier for employers would be beneficial for transactions exchanged electronically. Health care providers may need to identify the employer of the participant on claims submitted to health plans electronically. Employers need to identify themselves in electronic transactions when they enroll or disenroll employees in a health plan or make premium payments to health plans on behalf of their employees. Employers and health care providers may need to identify an employer as the source or receiver of information about a participant’s eligibility.
2. What standard is being proposed as the employer identifier for use in electronic health transactions?
We are proposing the Employer Identification Number (EIN), the taxpayer identifying number for employers that is assigned by the Internal Revenue Service. This identifier has nine digits with the first two digits separated by a hyphen, as follows: 00-0000000.
3. Has the Internal Revenue Service agreed to the use of the EIN as the standard employer identifier for use in electronic health transactions?
Yes, on January 16, 1998 the Internal Revenue Service agreed to the use of the EIN as the identifying number for employers in all electronic health care transactions under the Health Insurance Portability and Accountability Act of 1996.
4. How does an employer obtain an EIN?
The Internal Revenue Service maintains the process for assigning EINs. An employer obtains an EIN by submitting IRS Form SS-4, Application for Employer Identification Number, to the IRS. Any business that pays wages to one or more employees is required to have an EIN as its taxpayer identifying number. There would be few, if any, employers that would not already have an EIN for taxpayer identifying purposes.
5. Some employers have more than one EIN. Which one should be used for electronic health transactions?
In the Notice of Proposed Rule Making we ask for public comment on whether one of the employer’s EINs should be used consistently in electronic health transactions and how that one EIN should be selected.
6. Who is required by HIPAA to use the EIN in electronic health transactions?
HIPAA does not require employers to use the standard employer identifier or standard health care transactions. However, we believe that many employers will want to take advantage of this standardization. Providers, health plans, and health care clearinghouses are required to use the standard employer identifier in electronic transactions, such as health care claims or eligibility inquiries, if the transactions require an employer identifier.
7. How would a provider, health plan, or health care clearinghouse obtain the EIN of an employer for use in electronic health care transactions?
Health care providers, health plans, or health care clearinghouses would obtain an employer’s EIN directly from the employer. The proposed rule would require an employer to disclose its EIN, upon request, to any entity that conducts standard electronic transactions that require that employer’s identifier. The authority to require this disclosure is implicit in HIPAA’s directive to the Secretary to adopt an employer identification number for use in the health care system. We have identified no reason for an employer to refuse to furnish the number. The EIN, unlike the Social Security Number, is not information about a person. EINs are not considered private and they may be freely exchanged by employers and others.