Paying Human Subjects and Maintaining Confidentiality and 1099 Reporting
- Director of Purchasing Services
- Beth Tapp
This policy establishes guidelines and processes for paying human participants who are involved in University research studies, complying with the legal obligation to maintain their confidentiality and the tax reporting requirements associated with these payments.
Departments must have an Institutional Review Board (IRB) approval on file prior to engaging and paying human participants.
Individuals who take part in University research studies often receive payment for their involvement as human participants. University faculty and staff have a legal obligation to maintain the confidentiality of those individuals, whether issuing a payment to the individual or making payments to third parties that provide research-related services and/or products. The payment process must maintain their confidentiality while meeting Internal Revenue Service (IRS) reporting requirements and conforming with the University's standard accounting and payment practices. Units must ensure that information identifying the human participants or name of the study are excluded from the payment documents and any attachments. All of these details must be maintained in the departmental files.
Payments and Tax Reporting
IRS regulation requires the University to report payments to human participants totaling $600 or more during a calendar year. Units must be in compliance with the Administrative Procedure: Submitting 1099 Reportable Non-Payroll Payment Information.
Prior to payment
Units must confirm the following prior to payment(s) being made. Contact the Institutional Review Board (IRB) Office for assistance.
- Individual receiving payment is an eligible human participant at the time of the research involvement and that IRB approval was current at the time of participant
- Individual will receive payment as a human participant rather than as a participant/consultant.
- IRB approval status is current.
Payment methods available are listed below in preferred order. Additional information on payment methods can be found in the Procedures section of this policy.
- Reloadable prepaid debit card
- Payment by check
- Non-cash payments
- Request a cash advance (limited circumstances, such as for certain populations, and must be approved by Purchasing Services prior to requesting funds to ensure allowability of use of cash)
- Payments to a third party
Employees receiving a cash advance for payments to human participants must not open a bank account to hold the cash advance until disbursement, nor commingle the cash advance with any other department change funds, cash on hand, or personal funds. Employees receiving a cash advance for payments to human participants must comply with all University internal controls related to the proper handling and safeguarding of University cash.
Reason for Policy
To implement Board of Regents Policy: Research Involving Human Participants. This policy and related procedures establish the payment process that University faculty and staff must use to comply with privacy and IRS regulations when making payments to human participants who take part in University research studies.
|Primary Contact(s)||Beth Tappfirstname.lastname@example.org|
|Sponsored project administration||Grant Administrator, SPA||Directory|
|Payment processing||University Financial Helplineemail@example.com|
|Human Participants||Human Research Protection Program||612-626-5654||
|Confidentiality issues||Office of the General Counsel||612-624-4100|
|Data Privacy/HIPAA||Privacy and Security Officefirstname.lastname@example.org|
- Cluster Director
- Provides overall leadership and management to the financial operations clustered within a college, campus or administrative unit.
- Enterprise Financial System (EFS)
- The University’s financial system.
- Human Research Protection Program (HRPP)
- The department which serves as the administrative home for the Institutional Review Board (IRB) and the Institutional Animal Care and Use Committee (IACUC).
- Human Participant
- A living individual about whom an investigator (whether professional or student) conducting research obtains:
- data through intervention or interaction with the individual, or
- identifiable private information.
- Intervention includes both physical procedures by which data are gathered (for example, venipuncture) and manipulations of the participant or the participant’s environment that are performed for research purposes. Interaction includes communication or interpersonal contact between investigator and participant.
Private information includes information about behavior of a participant and/or information gathering that occurs in a context in which an individual can reasonably expect that no observation or recording is taking place, and information which has been provided for specific purposes by an individual and which the individual can reasonably expect will not be made public (for example, a medical record).
- Human Participant Payments
- Cash and non-cash payments, including stipend, gift cards, or any type of remuneration or consideration to inpatients, outpatients, human participants, volunteers and donors for their participation and time commitment in a clinical trial or social science survey, etc.
- Institutional Review Board (IRB)
- A board whose members are appointed by the Vice President for Research. The board and its staff are responsible, in conjunction with administrative officers of the University of Minnesota, for ensuring that University personnel and student researchers comply with applicable federal regulations and guidelines.
- IRB Approval
- The determination of the IRB that the research has been reviewed and may be conducted at an institution within the constraints set forth by the IRB and by other institutional and Federal requirements. (See the Code of Federal Regulations Title 45 Part 46, Protection of Human Subjects)
- Participants Support
- "Participants" are often confused with "human participants." "Participants" are people who are taking part in sponsor-defined training or sponsor-supported conferences, who are eligible to receive expense reimbursement under the terms of the sponsored project agreement. Participants cannot be paid for their participation in these events but can be reimbursed for legitimate and justifiable expenses. For participant support costs, refer to the Administrative Policy: Direct Costs on Sponsored Projects.
- Participant support costs.
- Direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects (see 2 CFR $200.75).
- Prepaid Debit Card (PPDC)
- A reloadable prepaid debit card that offers faster and safer payments. The primary recipient for PPDC to pay stipends and travel reimbursements are human participants, students, and non-employees.
- Plan of Study approved by IRB
- A systematic investigation, including research development, testing, and evaluation, designed to develop or contribute to generalized knowledge. Activities which meet this definition constitute research for purposes of this policy, whether or not they are conducted or supported under a program which is considered research for other purposes. For example, some demonstration and service programs may include research activities. (See the Code of Federal Regulations Title 45 Part 46, Protection Of Human Subjects.)
- Single Payment Supplier (SPV)
- A one-time payment, under $600, to a supplier that does require the supplier to be set up as a supplier in EFS.
- Sponsored Project
- For purposes of this policy, an externally funded activity governed by specific terms and conditions. Sponsored projects must be separately budgeted and accounted for subject to terms of the sponsoring organization. Sponsored projects may include grants, contracts, and cooperative agreements for research, training, and other public service activities.
- Third Party
- Any person or supplier (external to the University) who receives payment for providing research-related services and/or products.
- Certified Approver
- Review and approve payment documents for confidentiality, accuracy, and compliance with policy.
- Cluster Director
- Responsible for the accuracy and integrity of all payments made using the cluster SPV supplier numbers. Ensures proper use of the SPV, that adequate control is in place and the SPV activity is closely monitored.
- Document Preparer
- Ensure confidentiality and accuracy of payment documentation. Completes documentation in accordance with University policies and procedures.
- Principal Investigator
- Ensures compliance to HRPP policy and collection of required data.
- Ensure confidentiality and proper protocol procedures are followed.
- Purchasing Services
- Approve and monitor cash advance requests. Develops and maintains policies and procedures associated with payment processing. Reviews payment activity, obtains payee information from departments and issues 1099 MISC for reportable payments as required. Reserves the right to charge back any card or load fee that has been incurred on returned or unused PPDC cards.
- Sponsored Projects Administration
- Assist in negotiation of grant, contract terms, and conditions in accordance with Regents policies, laws, guidelines and interpretation of federal regulations, such as OMB Uniform Guidance. Develop and maintain policies and procedures in accordance with the regulations. Establish sponsored project accounts in the University's accounting system and assign the appropriate function codes. Ensure IRB approval has been obtained.
- Unit Administrator
- Oversight of departmental activities.
- Ensures awareness and compliance to policy.
- Voucher Specialist
- Ensures proper use of the SPV, that adequate control is in place and the SPV activity is closely monitored.
- Board of Regents Policy: Research Involving Human Participants
- Administrative Policy: Direct Costs on Sponsored Projects
- Administrative Policy: Purchasing a Professional Service
- Federal Policy for the Protection of Human Subjects: (45 Code of Federal Regulations, Part 46)
- Health Insurance Portability and Accountability Act of 1996 (HIPAA) website
- IRB website
- SPA website
- December 2019 - Comprehensive Review, Minor Revisions.
- Changed wording from “subjects” to “participants” to align with Board of Regents Policy: Research Involving Human Participants (updated December 2018)
- Removed detailed information about 1099 reporting from the policy and moved it to a procedure (other policies will use this same procedure).
- Moved common language from procedures to policy
- Related to confirmation that the individual receiving payment is an eligible human participant at the time of the research involvement and that IRB approval was current at the time of the participant contact.
- Provided the list of payment methods in preferred order.
- Updated definitions and responsibilities.
- June 2017 - Added pre-paid debit card related procedure and forms. Modified existing procedure: Paying Human Subjects Directly and FAQ to include this payment option.
- December 2014 - Reference to A-21 changed to OMB Uniform Guidance in Responsibilities.
- September 2012 - Comprehensive Review. Minor revision in multiple sections and procedure for clarification.
- July 2008 - Updated to reflect rollout of Enterprise Financial System. CUFS forms were deleted, and EFS forms added.
- February 2004 - Added Frequently Asked Questions: Paying Human Subjects to appendices.
- January 2004 - Added Payment Affidavit for FFN Entry. Added FFN Approvers Tutorial.
- October 2002