[Federal Register: July 23, 2004 (Volume 69, Number 141)]
[Rules and Regulations]
[Page 43926-43928]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23jy04-15]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
45 CFR Part 146
[CMS-2033-F]
RIN 0938-AK00
Requirements for the Group Health Insurance Market; Non-Federal
Governmental Plans Exempt From HIPAA Title I Requirements
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This rule finalizes existing exemption election requirements
that
[[Page 43927]]
apply to self-funded non-Federal governmental plans. In it, we clarify
the conditions under which plan sponsors may exempt these plans from
most of the requirements of title XXVII of the PHS Act, and provide
guidance on the procedures, limitations, and documentation associated
with exemption elections. Finally, we revise the requirements to
reinforce beneficiary protections for exemption elections.
DATES: The regulations amending 45 CFR 146.180 became effective on
September 24, 2002.
FOR FURTHER INFORMATION CONTACT: David Holstein (410) 786-1565.
SUPPLEMENTARY INFORMATION:
I. Background
Title I of the Health Insurance Portability and Accountability Act
of 1996 (HIPAA) added a new title XXVII to the Public Health Service
(PHS) Act to establish various reforms to the group and individual
health insurance markets. The group market reforms are contained under
Part A of title XXVII, which includes, among other things, guaranteed
availability of coverage to small group market employers and
renewability of coverage in the small and large group markets;
limitations on pre-existing condition exclusion periods; special
enrollment periods under certain circumstances; and prohibition of
discrimination against individual participants and beneficiaries based
on health status.
Part A of title XXVII was amended by the Newborns' and Mothers'
Health Protection Act of 1996 (NMHPA), the Mental Health Parity Act of
1996 (MHPA), and the Women's Health and Cancer Rights Act of 1998
(WHCRA), which added new sections 2704, 2705 and 2706 (subpart 2 of
Part A of title XXVII), respectively. NMHPA provides protections for
mothers and newborn children for hospital stays following childbirth.
MHPA, which applies to group health plans sponsored by employers with
more than 50 employees, provides for parity between annual and lifetime
dollar limits applicable to mental health benefits, and annual and
lifetime dollar limits applicable to medical and surgical benefits.
Originally, the MHPA sunset date was September 30, 2001, but subsequent
legislation (Pub. L. 107-116 and Pub. L. 107-313) respectively extended
the sunset date to December 31, 2002, and December 31, 2003. WHCRA
requires group health plans that provide medical and surgical benefits
for mastectomies to cover, among other things, reconstructive surgery
and prostheses following a mastectomy.
Section 2721(b)(2) of the PHS Act, as added by HIPAA and
implemented at 45 CFR 146.180, permits non-Federal governmental
employers to elect to exempt self-funded portions of their group health
plans (that is, benefits not provided through health insurance
coverage) from most of the requirements of title XXVII of the PHS Act.
(This practice is sometimes referred to as ``opting out of HIPAA.'')
However, health plans cannot be exempted from certification and
disclosure of creditable coverage requirements under section 2701(e) of
the PHS Act.
II. Summary of Provisions of the Interim Final Rule With Comment Period
On July 26, 2002, we published in the Federal Register (67 FR
48802) an interim final rule with comment period, ``Technical Change to
Requirements for the Group Health Insurance Market; Non-Federal
Governmental Plans Exempt From HIPAA Title I Requirements'' that
amended existing exemption election requirements at Sec. 146.180 that
apply to self-funded non-Federal governmental plans. In the interim
final rule with comment period, we clarified the conditions under which
plan sponsors may exempt these plans from most of the requirements of
title XXVII of the PHS Act, provided guidance on the procedures,
limitations, and documentation associated with exemption elections,
revised the exemption election requirements to reinforce beneficiary
protections, and made a technical correction to Sec. 146.150
``Guaranteed availability of coverage for employees in the small group
market.''
We refer the reader to the July 26, 2002, interim final rule with
comment period for greater detail.
III. Analysis of and Responses to Public Comments
We received no public comments on the July 26, 2002, interim final
rule.
IV. Provisions of the Final Regulations
The provisions of this final rule are identical to the provisions
of the July 26, 2002, interim final rule with comment period.
V. Collection of Information Requirements
Under the Paperwork Reduction Act (PRA) of 1995, we are required to
provide 30-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We received no comments.
The reporting and disclosure requirements referenced under Sec.
146.180(b), (g), and (h) are currently approved under OMB number 0938-
0702 (HIPAA Group Market Information Collection Requirements).
Under paragraph (e) of Sec. 146.180, CMS may require that
additional information be submitted after receiving an election to opt
out. The burden of this requirement is the time it takes to gather and
submit the additional information. This type of information collection
is exempt from the requirements of the PRA under section 1320.4 as it
is a collection of information during the conduct of an administrative
action.
As required by section 3504(h) of the PRA, we have submitted a copy
of this document to OMB for its review of these information collection
requirements.
If you comment on these information collection and recordkeeping
requirements, please mail copies directly to the following:
Centers for Medicare & Medicaid Services, Office of Strategic
Operations and Regulatory Affairs, Regulations Development and
Issuances Group, Attn: Julie Brown, Room C5-14-03, 7500 Security
Boulevard, Baltimore, MD 21244-1850; and
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 10235, New Executive Office Building, Washington, DC
20503, Attn: Brenda Aguilar, CMS Desk Officer.
VI. Regulatory Impact Statement
We have examined the impacts of this final rule as required by
Executive Order 12866 (September 1993, Regulatory Planning and Review),
the Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-
354), the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and
Executive Order 13132.
[[Page 43928]]
Executive Order 12866 (as amended by Executive Order 13258, which
merely reassigns responsibility of duties) directs agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
This final rule is not economically significant and is not a major
rule.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and government agencies.
Most hospitals and most other providers and suppliers are small
entities, either by nonprofit status or by having revenues of $6
million to $29 million in any 1 year. Individuals and States are not
included in the definition of a small entity. This final rule will have
no significant impact on small businesses.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that may result in expenditure in any 1 year by State,
local, or tribal governments, in the aggregate, or by the private
sector, of $110 million. This final rule does not impose unfunded
mandates on State, local, or tribal governments.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has federalism
implications. We have determined that this final rule does not
significantly affect the rights, roles, and responsibilities of State
or local governments.
The July 26, 2002, interim final rule with comment period was
reviewed by the Office of Management and Budget (OMB) in accordance
with provisions of Executive Order 12866.
List of Subjects in 45 CFR Part 146
Health care, Health insurance, Reporting and recordkeeping
requirements.
PART 146--REQUIREMENTS FOR THE GROUP HEALTH INSURANCE MARKET
0
Accordingly, the interim final rule with comment period amending 45 CFR
part 146, which was published on July 26, 2002, in the Federal Register
at 67 FR 48802-48814 is adopted as a final rule without change.
(Catalog of Federal Domestic Assistance Program No. 93.773),
(Catalog of Federal Domestic Assistance Program No. 93.774,
Medicare--Supplementary Medical Insurance Program)
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)
Dated: July 28, 2003.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
Dated: March 1, 2004.
Tommy G. Thompson,
Secretary.
[FR Doc. 04-16792 Filed 7-22-04; 8:45 am]
BILLING CODE 4120-01-P