Whose Social Security Number Is Used as the Insurance Plan ID?
Understand the various identification methods used for individuals within health insurance policies, including standard and alternative approaches.
Social Security Numbers (SSNs) serve as widely used identifiers across various financial and administrative systems. Their role extends to the insurance industry, where they facilitate accurate record-keeping and regulatory compliance. SSNs are a fundamental component in establishing and managing personal identification within these complex frameworks. This broad application underscores their significance in modern identification practices.
The Primary Identifier
For most health insurance policies, the Social Security Number used as the primary identification number for the overall plan belongs to the primary policyholder. This individual is the person who purchased the insurance policy or whose employment provides the coverage. The primary policyholder’s SSN serves as the foundational identifier for the entire policy, enabling various administrative functions.
Insurers use this SSN for administrative purposes, including processing claims and verifying eligibility for benefits. This identification is important for tax reporting related to the insurance plan. The Internal Revenue Service (IRS) requires health insurance providers and applicable large employers to report health coverage using SSNs on forms like 1095-B and 1095-C. These forms help individuals prepare their income tax returns and allow the IRS to verify tax compliance.
The SSN helps facilitate tax-related benefits or payments, such as premium tax credits or contributions and distributions from health savings accounts (HSAs). If an SSN is not provided, it can lead to data matching issues with the IRS, potentially causing delays in tax return processing or inquiries. Therefore, the primary policyholder’s SSN is important for managing a health insurance policy.
Identification for Covered Individuals
While the primary policyholder’s Social Security Number identifies the overall insurance plan, each individual covered under that policy, including spouses and dependent children, has their own Social Security Number recorded by the insurer. This individual SSN is important for maintaining separate medical records and processing individual claims accurately. Insurers use these unique identifiers to ensure each covered person’s healthcare services are documented and processed.
A dependent’s own SSN is important for their individual medical history or for tax reporting if they have their own income or health-related tax events. Federal law requires health insurance carriers and self-funded employers to report health insurance coverage to the IRS using the SSNs of all covered members, including dependents, on forms like 1095-B and 1095-C. Insurers request these SSNs to comply with reporting requirements and for tax verification.
For newborns, a temporary identifier may be used initially, but the child’s own SSN is required once obtained. Many health plans allow a grace period, such as 90 days or up to 12 months, for the SSN to be provided after birth or adoption to continue coverage. If the SSN is not furnished within the timeframe, the dependent’s coverage may be terminated. Insurers may also make multiple attempts to request missing SSNs for covered individuals to avoid penalties for incorrect reporting.
Alternative Identifiers
Situations arise where an individual needing health insurance coverage may not have a Social Security Number. In such cases, alternative identifiers can be used to ensure access to healthcare services. A common alternative is an Individual Taxpayer Identification Number (ITIN).
An ITIN is a nine-digit tax processing number issued by the IRS to individuals who are required to have a U.S. taxpayer identification number but are not eligible for an SSN. While an ITIN does not grant legal immigration status or work authorization, it can be accepted by many insurance providers in place of an SSN for various applications, including health insurance. Although the federal health insurance marketplace cannot use an ITIN to verify income with the IRS, some state-based marketplaces accept them.
In addition to ITINs, temporary or unique identifiers may be used by insurers for short-term situations. For instance, when a newborn does not yet have an SSN, a temporary placeholder allows for initial coverage. While SSNs are preferred for identification and tax reporting, ways exist to accommodate individuals without one, ensuring they can still secure health coverage.