HIPAA allows "small health plans, " defined as health plans having annual receipts of $5 million or less, an additional year (in the case of the Privacy Rule, until April 14, 2004) to come into compliance. How should a health plan determine what receipts to use to decide whether it qualifies as a "small health plan?"
Health plans that file certain federal tax returns and report receipts on those returns should use the guidance provided by the Small Business Administration at 13 CFR 121.104 to calculate annual receipts. Health plans that do not report receipts to the IRS - for example, ERISA group health plans that are exempt from filing income tax returns - should use proxy measures to determine their annual receipts. Further information about the relevant provisions of 13 CFR 121.104 and these proxy measures, and additional information related to “small health plans,” may be found on the CMS Web site.