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Professional Malpractice Liability Insurance Eligibility Requirement

Requirements for non-attorney representatives to secure and maintain liability insurance to protect claimants in the event of malpractice can be found in 206(e)(2)(c) [42 U.S.C. 406(e)(2)(c)] of the Social Security Act. SSA's regulations in 20 CFR 404.1717(a)(6) and 416.1517(a)(6) specifically require that an EDPNA maintain continuous professional liability insurance, including coverage for malpractice in the amount SSA prescribes.

Once you have passed the exam and CPS HR Consulting (we or us) has determined that you meet the requirements for eligibility for direct pay, we will issue you a Notice of Eligibility for direct pay. You must submit the initial proof of your insurance to us immediately after receiving this notification. You must maintain continuous liability insurance coverage and submit proof of such to us each time you change insurance providers and after any period of ineligibility. You must send the insurance documents to us through our portal, email, or postal service to our mailing address.

You must carry professional liability insurance coverage of at least $100,000 per incident. The minimum annual aggregate coverage amount for an individual's professional liability insurance is $500,000 (see 2005 FR Vol 70 No.136). For a business liability malpractice insurance policy, the minimal annual aggregate amount is determined in accordance with the following schedule:

Number of Covered EmployeesMinimum Aggregate Amount
1 to 10$500,000
11 to 25$1 million
26 to 50$2 million
51 to 100$3 million
101 to 200$4 million
201 or more$5 million

You must submit a certificate of insurance, binder of insurance, or other actual policy showing the following:

  1. Effective dates of the insurance policy

  2. Policy number

  3. Limits of professional liability insurance for malpractice

Proposals or quotes for professional liability insurance are not acceptable. Your professional liability insurance must be in effect at the time you submit proof to us. If you fail to submit proof of sufficient professional liability insurance, you will not be eligible for direct payment.

You must provide your insurance information to us by 3:00 p.m. EST on the last business day of the month to qualify for direct fee payment on the first day of the following month. If we do not receive and approve your documents by the 3:00 p.m. EST deadline, you will not be eligible for direct fee payment until the month after the month we receive and approve your documents.

If you are establishing eligibility for direct pay for the first time, you must submit a completed Form SSA-1699 (Registration for Appointed Representative Services and Direct Payment) on or after your assigned date of eligibility.

To protect claimants and maintain the integrity of the EDPNA program, SSA requires that we periodically audit insurance coverage. When you are selected for an audit, we will send you a notice on SSA's behalf requesting proof of insurance coverage before the deadline set out in the notice. A lapse in insurance could result in a period of ineligibility and preclude you from receiving direct payment from SSA for a minimum of six months.

"Prior Act" insurance coverage is not compliant with the statutory and regulatory requirement that you maintain continuous liability insurance coverage. A lapse in your insurance coverage may result in a violation of the EDPNA program rules.

However, there may be situations in which a lapse of coverage will not be considered a violation of the EPDNA program rules. If you are inactive (e.g., you no longer practice, either temporarily or permanently) or you otherwise change your status (e.g., you become licensed to practice law or you have been deployed by the military and will not be practicing while deployed), you should notify us in writing through any of the following methods as soon as your status changes. After receiving the necessary information, we will advise you whether or not you may discontinue your liability insurance coverage during the period of inactivity without adverse action by the agency. You must notify us immediately when you want to resume your practice. In order to change your status to eligible for direct payment, you must provide proof of liability insurance to avoid penalties.

Note: You may continue to represent claimants during a period of ineligibility for direct payment; however, you will be unable to receive direct payment during that period.

If you do not maintain continuous liability insurance coverage (and we have not informed you that you are excepted from this requirement while inactive), we may find you ineligible for direct payment for at least six (6) full calendar months. You have the opportunity to protest our finding that you have not provided sufficient proof that you maintained continuous liability insurance coverage in writing. You must provide all relevant supporting documentation to us within ten (10) calendar days after the date we notify you of our finding of ineligibility. You can find information about our ineligibility and protest procedures here.

If you file a protest, we will forward the protests to SSA for review. If SSA confirms our finding, you will be ineligible for direct payment for six (6) full calendar months beginning with the month after SSA upholds our finding. If you do not protest our finding, you will be ineligible for direct fee payment for six (6) full calendar months beginning with the month after the month the protest period ends. At the end of the 6-month period of ineligibility, you must provide your required insurance information to us by 3:00 p.m. EST on the last business day of the month to qualify for direct fee payment on the first day of the following month. If you submit the required information after the 3:00 pm deadline on the last day of the month, you will be eligible for direct fee payment on the first day of the month after the following month. If SSA finds that you have misrepresented information about your liability insurance coverage, we may refer this information to SSA's Office of the General Counsel for possible disciplinary action.

Here are some examples:

Example 1:

You are selected to participate in the insurance audit. When you review your coverage, you notice that the insurance has expired a few months ago. Immediately, you contact your carrier to re-establish your liability with a prior act coverage and submit your new insurance certificate to CPS. SSA does not recognize the prior act coverage, you will be ineligible for direct payment per 20 CFR 404.1717.

Example 2:

You have practiced as a non-attorney representative since first becoming eligible. A few years ago, you had a lapse in your insurance coverage. You purchased prior act coverage to cover the lapse. This year, you were selected to participate in the liability insurance audit and are currently covered. SSA finds out about the lapse. SSA does not recognize the prior act coverage, you will be ineligible for direct payment per 20 CFR 404.1717.

Example 3:

You temporarily stopped working as a non-attorney representative before SSA and cancelled your liability insurance. As you started practicing again, you purchase new insurance. You never told SSA and during an audit, SSA found out about the lapse. One of the requirements for an EDPNA is maintaining continuous liability insurance, so you will be ineligible for direct payment per 20 CFR 404.1717.

Example 4:

You temporarily have to stop working as a representative. You inform us that you will be inactive. SSA will change your status to be ineligible for direct payment and based on the information provided to SSA, it allows you to cancel your liability insurance. Once you are ready to practice again, you purchase and submit your proof of insurance to us. We request SSA to change your status to eligible again. During an audit, SSA reviews your insurance history. Because you notified us in advance of the break in representation and you have been continuously insured since you started to work again, you will keep your eligibility for direct payment.