Federal Register, Volume 64 Issue 205 (Monday, October 25, 1999)

[Federal Register Volume 64, Number 205 (Monday, October 25, 1999)]
[Rules and Regulations]
[Pages 57520-57521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27646]



[[Page 57519]]

_______________________________________________________________________

Part II

Department of the Treasury
_______________________________________________________________________
Internal Revenue Service



26 CFR Part 54



_______________________________________________________________________
Department of Labor
_______________________________________________________________________
Pension and Welfare Benefits Administration



29 CFR Part 2590



_______________________________________________________________________
Department of Health and Human Services
_______________________________________________________________________
Health Care Financing Administration



45 CFR Subtitle A, Parts 144 and 146



Health Insurance Portability; Final Rule

Federal Register / Vol. 64, No. 205 / Monday, October 25, 1999 / 
Rules and Regulations

[[Page 57520]]



DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

29 CFR Part 2590

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

45 CFR Subtitle A, Parts 144 and 146


Health Insurance Portability

AGENCY: Office of Tax Policy and Internal Revenue Service, Treasury; 
Pension and Welfare Benefits Administration, Labor; and Health Care 
Financing Administration, HHS (the Departments).

ACTION: Solicitation of comments on interim rule.

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SUMMARY: In response to interim regulations published on April 8, 1997, 
the Departments have received comments from the public on a number of 
issues arising under the portability, access, and renewability 
provisions of the Health Insurance Portability and Accountability Act 
of 1996 (HIPAA). The Departments are interested in receiving further 
comments reflecting the experience that interested parties have had 
with the interim regulations.

DATES: The Departments have requested that comments be submitted on or 
before January 25, 2000.

ADDRESSES: For convenience, written comments should be submitted with a 
signed original and 3 copies to the Health Care Financing 
Administration (HCFA) at the address specified below. HCFA will provide 
copies to each of the Departments for their consideration. All comments 
will be available for public inspection in their entirety. Comments 
should be sent to: Health Care Financing Administration, Department of 
Health and Human Services, Attention: HCFA-2056-NC, P.O. Box 9013, 
Baltimore, MD 21244-9013.
    If you prefer, you may deliver a signed original and 3 copies of 
your written comments to one of the following addresses:

Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., 
Washington, DC.
        or
Room C5-16-03, 7500 Security Boulevard, Baltimore, Maryland.

    Comments may also be submitted electronically to the following e-
mail address: HIPAAC[email protected]. E-mail comments must include the 
full name and address of the sender, and must be submitted to the 
referenced address in order to be considered. All comments must be 
incorporated into the text of the e-mail message itself in case of any 
difficulty in accessing attachments. Electronically submitted comments 
will be available for public inspection at the Independence Avenue 
address, below. Because of staffing and resource limitations, comments 
by facsimile (FAX) transmission cannot be accepted. In commenting, 
please refer to file code HCFA-2056-NC. Comments received timely will 
be available for public inspection as they are received, generally 
beginning approximately 3 weeks after publication of this document, in 
Room 309-G of the Department of Health and Human Service's offices at 
200 Independence Avenue, SW., Washington, DC, on Monday through Friday 
of each week from 8:30 a.m. to 5 p.m. (phone: (202) 690-7890).
    Upon receipt from HCFA, the Department of Labor will make all 
comments available for public inspection and copying in their entirety. 
All comments received by the Department of Labor will be available for 
public inspection and copying at the Public Disclosure Room, Pension 
and Welfare Benefits Administration, U.S. Department of Labor, Room N-
5638, 200 Constitution Avenue, NW, Washington, DC 20210, on Monday 
through Friday of each week from 8:30 a.m. to 4:30 p.m.

FOR FURTHER INFORMATION CONTACT: Amy Turner, Department of Labor, 
Pension and Welfare Benefits Administration, Health Care Task Force, at 
(202) 219-7006 (not a toll-free number); Russ Weinheimer, Internal 
Revenue Service, at (202) 622-4695 (not a toll-free number); or 
Danielle Noll, Health Care Financing Administration, at 410-786-1565 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Customer Service Information

    To assist consumers and the regulated community, the Departments 
have issued questions and answers concerning HIPAA. Individuals 
interested in obtaining a copy of the Department of Labor's publication 
``Recent Changes in Health Care Law'' may call a toll free number, 800-
998-7542, or access the publication on-line at www.dol.gov/dol/pwba, 
the Department of Labor's website. Questions and answers pertaining to 
HIPAA are also available on-line at www.hcfa.gov/hipaa/hipaahm.htm 
(HCFA's website). The IRS publication ``Deciding Whether to Elect COBRA 
Health Care Continuation Coverage After the Enactment of HIPAA'' is 
available on the IRS's website at http://www.irs.ustreas.gov/prod/news/
index.html. Copies of the interim rules under HIPAA, as well as notices 
and press releases related to HIPAA and other recently enacted health 
care laws, are also available at the above referenced websites.

Background

    The Health Insurance Portability and Accountability Act of 1996 
(HIPAA) was enacted on August 21, 1996 (Public Law 104-191). HIPAA 
amended the Internal Revenue Code of 1986 (Code), the Employee 
Retirement Income Security Act of 1974 (ERISA), and the Public Health 
Service Act (PHS Act) to provide for, among other things, improved 
portability and continuity of health coverage including group health 
plan coverage provided in connection with employment and other coverage 
in the group and the individual insurance markets. Health coverage is 
regulated in part by the Federal government, through the Code, ERISA, 
the PHS Act and other Federal provisions, and in part by the States.
    The portability, access, and renewability provisions of HIPAA are 
set forth in Subtitle K of the Code, Part 7 of Subtitle B of Title I of 
ERISA, and Title XXVII of the PHS Act (referred to below as the HIPAA 
portability provisions). The HIPAA portability provisions are designed 
to improve the availability and portability of health coverage by 
limiting exclusions for preexisting conditions and providing credit for 
prior coverage, guaranteeing availability of health coverage for small 
employers, prohibiting discrimination against employees and dependents 
based on health status, and guaranteeing renewability of health 
coverage for employers and individuals. The HIPAA portability 
provisions also include rules that guarantee access to individual 
coverage for people who lose their group coverage. These provisions 
also set forth requirements imposed on health insurance issuers. 
Pursuant to sections 101(g)(4), 102(c)(4), and 401(c)(4) of HIPAA, the 
Departments issued interim regulations made available on April 1, 1997 
(published in the Federal Register on April 8,1997) (62 FR 16894) to 
carry out these provisions, and are in the process of updating those 
regulations.

[[Page 57521]]

Comments

    In response to the interim regulations issued in April of 1997, 
comments have been received from the public on a number of issues 
arising under the HIPAA portability provisions. Further comments on the 
HIPAA portability provisions are welcome, including comments 
concerning, for example, certificates of creditable coverage, 
limitations on preexisting condition exclusion periods, special 
enrollment, excepted benefits, guaranteed availability and renewability 
of coverage, and individual market requirements. The Departments are 
interested in comments reflecting the experience of group health plans, 
health insurance issuers, States, individuals, and other interested 
parties in complying with or enforcing HIPAA's statutory and regulatory 
requirements, or in obtaining the protections provided by these 
provisions. With respect to HIPAA's nondiscrimination provisions, the 
Departments expect to publish comprehensive regulations shortly and 
comments will be solicited separately in connection with that 
rulemaking. In order to quantify the costs and benefits associated with 
the major provisions of HIPAA and the interim rule, the Departments are 
interested in comments, studies, surveys, or reports on these costs and 
benefits and why and how they arise. For benefits, areas of interest 
include the impact HIPAA has had on: ``job lock,'' in which the risk of 
losing health care coverage discourages workers from changing jobs; 
health coverage--whether it has been expanded and whether lapses in 
health coverage have become less frequent and shorter in duration; and 
access to health coverage, particularly in light of HIPAA's 
nondiscrimination and guaranteed issue provisions. In terms of costs, 
areas of interest include the impact HIPAA has had on administrative 
costs, claims costs, and group and individual premiums. In addition, 
comments are sought regarding other changes to group health plans 
resulting from HIPAA, as well as the experience with State 
implementation of alternative mechanisms in the individual health 
insurance market.
    In addition, a recent General Accounting Office (GAO) report 
contained a recommendation that the model certificate of creditable 
health plan coverage should more explicitly inform consumers of their 
rights under HIPAA.¹ The GAO recommended that, at a minimum, 
the model certificate should inform consumers about appropriate 
contacts for additional information about HIPAA, and highlight key 
provisions and restrictions, including: (1) The limits on preexisting 
condition exclusion periods and the guaranteed renewability of all 
health coverage; (2) the reduction or elimination of preexisting 
condition exclusion periods for employees changing jobs; (3) the 
prohibition against excluding an individual from an employer health 
plan on the basis of one or more health factors; and (4) the guarantee 
of access to insurance products for certain individuals losing group 
health coverage and the restrictions placed on that guarantee. In light 
of the GAO's recommendation, the Departments are interested in comments 
on how best to improve the model certificate of creditable coverage 
under HIPAA.

    \1\ Private Health Insurance: Progress and Challenges in 
Implementing 1996 Federal Standards (HEHS-99-100, May 1999).
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    Signed at Washington, DC this 5th day of August 1999.
J. Mark Iwry,
Benefits Tax Counsel, Department of the Treasury.

    Signed at Washington, DC this 5th day of August 1999.
Nancy J. Marks,
Acting Associate Chief Counsel, Employee Benefits and Exempt 
Organizations, Internal Revenue Service, Department of the Treasury.

    Signed at Washington, DC this 19th day of July 1999.
Richard M. McGahey,
Assistant Secretary, Pension and Welfare Benefits Administration, 
Department of Labor.

    Signed at Washington, DC this 15th day of September 1999.
Michael M. Hash,
Deputy Administrator, Health Care Financing Administration, Department 
of Health and Human Services.
[FR Doc. 99-27646 Filed 10-22-99; 8:45 am]
BILLING CODE 4830-01-P; 4510-29-P; 4120-01-P