[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR2590.701-7]

[Page 646]
 
                             TITLE 29--LABOR
 
 CHAPTER XXV--EMPLOYEE BENEFITS SECURITY ADMINISTRATION, DEPARTMENT OF 
                                  LABOR
 
PART 2590_RULES AND REGULATIONS FOR GROUP HEALTH PLANS--Table of Contents
 
Subpart B_Requirements Relating to Access and Renewability of Coverage, 
       and Limitations on Preexisting Condition Exclusion Periods
 
Sec. 2590.701-7  HMO affiliation period as alternative to preexisting 
condition exclusion.

    (a) In general. A group health plan offering health insurance 
coverage through an HMO, or an HMO that offers health insurance coverage 
in connection with a group health plan, may impose an affiliation period 
only if each of the requirements in paragraph (b) of this section is 
satisfied.
    (b) Requirements for affiliation period. (1) No preexisting 
condition exclusion is imposed with respect to any coverage offered by 
the HMO in connection with the particular group health plan.
    (2) No premium is charged to a participant or beneficiary for the 
affiliation period.
    (3) The affiliation period for the HMO coverage is applied uniformly 
without regard to any health status-related factors.
    (4) The affiliation period does not exceed 2 months (or 3 months in 
the case of a late enrollee).
    (5) The affiliation period begins on the enrollment date.
    (6) The affiliation period for enrollment in the HMO under a plan 
runs concurrently with any waiting period.
    (c) Alternatives to affiliation period. An HMO may use alternative 
methods in lieu of an affiliation period to address adverse selection, 
as approved by the State insurance commissioner or other official 
designated to regulate HMOs. Nothing in the part requires a State to 
receive proposals for or approve alternatives to affiliation periods.