[Federal Register Volume 64, Number 240 (Wednesday, December 15, 1999)]
[Notices]
[Pages 70164-70166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32500]



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Part V

Department of the Treasury
Internal Revenue Service
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Department of Labor
Pension and Welfare Benefits Administration
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Department of Health and Human Services
Health Care Financing Administration
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Signing of a Memorandum of Understanding Among the Department of the 
Treasury, the Department of Labor, and the Department of Health and 
Human Services; Notice

  Federal Register / Vol. 64, No. 240 / Wednesday, December 15, 1999 / 
Notices  

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration


Notice of Signing of a Memorandum of Understanding among the 
Department of the Treasury, the Department of Labor, and the Department 
of Health and Human Services

AGENCIES: The Internal Revenue Service, Department of the Treasury; the 
Pension and Welfare Benefits Administration, Department of Labor; 
Health Care Financing Administration, Department of Health and Human 
Services.

ACTION: Memorandum of Understanding Among the Department of the 
Treasury, the Department of Labor, and the Department of Health and 
Human Services.

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SUMMARY: The Department of the Treasury, the Department of Labor, and 
the Department of Health and Human Services (the Departments) entered 
into a Memorandum of Understanding (MOU) effective April 21, 1999. The 
purpose of the MOU is to implement section 104 of the Health Insurance 
Portability and Accountability Act of 1996 (HIPAA), Public Law 104-191, 
which directs the Departments to enter into an interagency MOU to 
ensure that regulations, rulings, and interpretations relating to the 
changes made by Subtitle A of Title I and section 401 of Title IV of 
HIPAA over which two or more Secretaries have responsibility are 
administered so as to have the same effect at all times. Section 104 
also requires the coordination of policies relating to enforcing the 
shared provisions in order to avoid duplication of enforcement efforts 
and to assign priorities in enforcement. The text of the MOU is set 
forth below.

FOR FURTHER INFORMATION CONTACT: Russ Weinheimer, Internal Revenue 
Service, Department of the Treasury, at (202) 622-4695; Mark Connor, 
Pension and Welfare Benefits Administration, Department of Labor, at 
(202) 219-7006; or David Mlawsky, Health Care Financing Administration, 
Department of Health and Human Services, at (410) 786-1565.

    Dated: December 9, 1999.
Alan Tawshunsky,
Special Counsel to the Associate Chief Counsel, Employee Benefits and 
Exempt Organizations, Internal Revenue Service, Department of the 
Treasury.

Alan D. Lebowitz,
Deputy Assistant Secretary for Program Operations, Pension and Welfare 
Benefits Administration, Department of Labor.

Gale P. Arden,
Acting Deputy Director, Private Health Insurance Group, Health Care 
Financing Administration, Department of Health and Human Services.

Memorandum of Understanding Among the U.S. Department of the 
Treasury, the U.S. Department of Labor, and the U.S. Department of 
Health and Human Services

Article I

Introduction and Purpose

    The Health Insurance Portability and Accountability Act of 1996 
(``HIPAA''), Pub. L. No. 104-191, was enacted on August 21, 1996. 
Titles I and IV of HIPAA amended the Internal Revenue Code, the 
Employee Retirement Income Security Act of 1974, and the Public Health 
Service Act to add provisions to improve access, portability and 
continuity of health insurance coverage in the group and individual 
health insurance markets.
    Section 104 of HIPAA directs the Secretary of the Treasury, the 
Secretary of Labor, and the Secretary of Health and Human Services to 
enter into an interagency memorandum of understanding. Section 104 
requires that the memorandum of understanding ensure that regulations, 
rulings, and interpretations relating to the changes made by Subtitle A 
of Title I and section 401 of Title IV of HIPAA over which two or more 
Secretaries have responsibility (``shared provisions'') are 
administered so as to have the same effect at all times. Section 104 
also requires the coordination of policies relating to enforcing the 
shared provisions in order to avoid duplication of enforcement efforts 
and to assign priorities in enforcement. This memorandum of 
understanding (MOU) is adopted pursuant to section 104 of HIPAA.
    This MOU formally establishes an interagency agreement among the 
Secretary of the Treasury, the Secretary of Labor, and the Secretary of 
Health and Human Services to ensure coordination in the manner and for 
the purposes set forth in section 104 of HIPAA. The Departments also 
intend to follow the process set forth in this MOU, to the extent 
appropriate, with regard to interpretations and enforcement of the 
provisions of the Newborns' and Mothers' Health Protection Act of 1996, 
the Mental Health Parity Act of 1996, and Subsequent Legislation. In 
addition, the Departments of Labor and HHS agree to follow the process 
set forth in this MOU, to the extent appropriate, with regard to 
interpretations and enforcement of the provisions of the Women's Health 
and Cancer Rights Act of 1998.

Article II

Authority

    This MOU is entered pursuant to the authority set forth in section 
104 of HIPAA, Pub. L. No. 104-191.

Article III

Definitions

    ``Agency'' refers to a component of a Department. For purposes of 
this MOU, this includes the Internal Revenue Service (IRS) within the 
Department of the Treasury, the Pension and Welfare Benefits 
Administration (PWBA) within the Department of Labor, and the Health 
Care Financing Administration (HCFA) within the Department of Health 
and Human Services.
    ``Code'' refers to the Internal Revenue Code of 1986.
    ``Committee'' refers to the Coordinating Committee described in 
Article V.
    ``Department'' refers to each of the Department of the Treasury, 
the Department of Labor, and the Department of Health and Human 
Services.
    ``Departments'' refers collectively to the Department of the 
Treasury, the Department of Labor, and the Department of Health and 
Human Services.
    ``ERISA'' refers to the Employee Retirement Income Security Act of 
1974.
    ``HCFA'' refers to the Health Care Financing Administration.
    ``HHS'' refers to the Department of Health and Human Services.
    ``Interpretations'' refers to any written Agency or Departmental 
statement, guidance, ruling, pronouncement, or explanation regarding a 
statute described in Article I of this MOU that is not a Regulation. 
Interpretations include statements such as Revenue Rulings, Technical 
Bulletins/Releases, Advisory Opinions, and similar Agency or 
Departmental releases that are binding on the issuing Agency or 
Department. Interpretations also include policy guidance, such as 
information letters, bulletins and policy letters,

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whether or not such guidance is binding on the issuing Agency or 
Department.
    ``IRS'' refers to the Internal Revenue Service.
    ``Labor'' and ``DOL'' refer to the Department of Labor.
    ``MHPA'' refers to the Mental Health Parity Act of 1996.
    ``NMHPA'' refers to the Newborns' and Mothers' Health Protection 
Act of 1996.
    ``PHS Act'' refers to the Public Health Service Act.
    ``PWBA'' refers to the Pension and Welfare Benefits Administration.
    ``Regulations'' refers to rules that are promulgated in accordance 
with the provisions of the Administrative Procedure Act applicable to 
substantive rules and that are published in the Federal Register and 
codified in the Code of Federal Regulations.
    ``Related Acts'' refers to MHPA and NMHPA.
    ``Subsequent Legislation'' refers to future federal legislative 
enactments concerning health care which result in two or more of the 
Departments having shared jurisdiction.
    ``Treasury'' refers to the Department of the Treasury.
    ``WHCRA'' refers to the Women's Health and Cancer Rights Act of 
1998.

Article IV

Background

    Subtitle A of Title I and section 401 of Title IV of HIPAA are 
intended to improve the availability of private health insurance by 
increasing portability, access and renewability in the group market. 
HIPAA establishes limits on the imposition of preexisting condition 
exclusions and generally prohibits group health plans and health 
insurance issuers from discriminating against individuals based on 
health status when determining eligibility to enroll in a group health 
plan or to obtain related insurance or in deciding the amount of 
premium to be charged to similarly situated individuals. Employers may 
not be denied continued access to multiemployer plans, or multiple 
employer welfare arrangements, except for certain reasons set forth in 
HIPAA.
    HIPAA and Related Acts amended three federal statutes: the Code, 
administered by the Treasury through IRS; ERISA, administered by DOL 
through PWBA; and the PHS Act, administered by HHS through HCFA. Under 
the Code, as amended by HIPAA and Related Acts, the Treasury has 
authority over group health plans (including church plans) and their 
sponsors, and IRS enforces the requirements of HIPAA and Related Acts 
through the imposition of an excise tax. Under ERISA, as amended by 
HIPAA and Related Acts, DOL has increased authority over group health 
plans that are subject to Part 7 of subtitle B of Title I of ERISA. 
Health insurance issuers offering health insurance coverage in 
connection with such plans are also subject to Part 7. However, in 
accordance with the provisions of HIPAA, only participants and 
beneficiaries (and not DOL) may bring an enforcement action against 
health insurance issuers under Part 7.
    Under the PHS Act, as amended by HIPAA and Related Acts, HCFA has 
authority over health insurance issuers and nonfederal governmental 
plans. If a State fails to substantially enforce Parts A and B of Title 
XXVII of the PHS Act, or requests that HCFA enforce the provisions or 
requirements, HCFA enforces the group and individual market 
requirements by imposing a civil monetary penalty on issuers that fail 
to comply with HIPAA's requirements in that State.
    There are differences in some of the amendments that HIPAA and 
Related Acts made to the three statutes. In some instances, changes 
were made to only one of the federal statutes with no counterpart in 
the other two statutes. Section 104 of HIPAA requires the Secretaries 
of the Treasury, Labor and HHS to coordinate in the areas of parallel 
responsibility relating to the shared provisions of HIPAA.

Article V

Scope of Work

    The Departments agree to assign representatives to work closely to 
ensure that all Interpretations, Regulations and enforcement strategies 
relating to shared provisions of Subtitle A of Title I and section 401 
of Title IV of HIPAA and Related Acts will be developed and implemented 
in a coordinated manner. All such Interpretations, Regulations and 
enforcement strategies will be administered in a manner that promotes 
consistency in effect, that avoids duplication of enforcement efforts, 
and that reflects consideration of the appropriate priorities in 
enforcement.
    In this regard, the Departments will continue to work together 
closely through regular joint meetings and frequent consultation, 
consistent with the process (i.e., by mutual consent) that has been 
used in developing existing Regulations and Interpretations under HIPAA 
and Related Acts. Similarly, DOL and HHS will continue to work together 
closely through regular joint meetings and frequent consultation to 
develop Regulations and Interpretations under WHCRA.
    In order to further effectuate this coordination, the Treasury, 
IRS, DOL, and HHS each will name a ``Department Designee'' to serve on 
a Coordinating Committee. The Committee's task will be to ensure the 
identification and coordination of policies involving areas of shared 
responsibility under HIPAA and Related Acts to maintain consistency in 
the application of these provisions that amend the Code, ERISA, and the 
PHS Act.
    The Committee also will take steps to maximize the efficiency of 
Agency enforcement efforts, including developing the terms of further 
agreement(s), as necessary. The Committee members shall meet, 
quarterly, or at such times as they may agree, to review and discuss 
relevant pending Regulations and Interpretations to evaluate whether 
the position(s) set forth therein reflect a coordinated position. 
Committee meetings will be held at locations agreed to by the Committee 
members. Upon agreement of the Committee members, such meetings may be 
held by conference call. Each Department will assume the costs 
associated with the participation of its respective Committee members.
    Timely and prompt consensus will be sought in the development and 
administration of all Interpretations affected by this MOU. Any 
Department Designee can bring any matter subject to the MOU before the 
Committee. The Department Designees serving on the Committee will 
attempt to reach consensus on issues within 45 days (except in unusual 
circumstances) after such issues have been formally presented 
(including a written summary) at a meeting of the Committee. If 
consensus on particular issues is reached by the members of the 
Committee, appropriate clearance will be initiated within each 
Department.

Article VI

Coordinated Enforcement Strategy

    Generally, the Departments intend to continue the current informal 
arrangements that have developed for cooperation and collaboration in 
the handling of inquiries arising under HIPAA, MHPA, NMHPA, and WHCRA. 
In addition, pursuant to Section 104(2) of HIPAA and this MOU, the 
Committee, and any appropriate individuals designated by the Agencies 
or Departments, shall develop a coordinated enforcement strategy that 
avoids duplication of enforcement efforts and assigns priorities in

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enforcement. The Agencies or Departments shall first designate, within 
six months of the execution of this MOU, individuals who are to work 
with the Committee in developing the enforcement strategy. This group 
shall also devise a written operational agreement for the sharing of 
information that is related to enforcement cases among the Departments. 
Moreover, the operational agreement may address procedures for the 
referral of cases, the development of audit checklists and training 
materials, and the coordination of public affairs information. The 
operational agreement may also describe the individuals within each 
Department who are responsible for implementing the sharing of 
information.
    Subject to applicable legal restrictions (including section 6103 of 
the Code), the Departments agree, absent exigent circumstances, to 
notify each other in writing (through the Department Designee) prior to 
the commencement of any administrative or judicial proceeding on 
matters within the scope of this MOU and to inform each other of the 
final action resulting from such proceeding.
    Nothing in this section shall be construed to affect the 
enforcement authority that HIPAA or Related Acts confers on any 
Department, including enforcement concerning a matter as to which a 
Department has given or received the information or notice described 
herein, nor shall this paragraph be construed to preclude the 
Departments from agreeing to different arrangements on a case by case 
basis.

Article VII

Confidentiality of Information

    The Departments agree that any information shared or disclosed 
pursuant to this MOU will be held in strict confidence and may be used 
only for purposes consistent with this MOU or as otherwise permitted by 
law. All requests by parties other than the Departments for disclosure 
of information shall be coordinated with the Agency that initially 
compiled or collected the information, provided that no Agency shall 
disclose information initially compiled by another Agency to the public 
without the approval of the appropriate Agency or Department unless the 
Agency is required by law to do so (e.g., Freedom of Information Act 
(FOIA), 5 U.S.C. 552; Federal Advisory Committee Act (FACA), 5 U.S.C. 
App. 2), in which event it will notify the appropriate Department or 
Agency in writing of its intent to disclose such information. Nothing 
in this MOU shall be deemed to confer rights on any party other than 
the Departments as a result of any act or omission by any Agency or 
Department with respect to its obligations under this MOU.

Article VIII

Duration of Agreement

    This MOU will become effective upon the date of the final signature 
and may be amended by written agreement of the undersigned. It will 
remain in effect until amended by the parties, or until terminated by 
any of the parties upon 30 days written notice to the other parties 
and, upon the agreement of the Departments, shall apply to Subsequent 
Legislation.

Article IX

Officials Responsible for MOU

    The appropriate Departmental officials will appoint their 
respective Department Designees to the Committee within 30 days after 
the signing of this MOU and will appoint any successors in a timely 
manner.
    We, the undersigned, do hereby agree to the foregoing provisions of 
this MOU.

    Dated: April 8, 1999.
Donald C. Lubick,
Assistant Secretary for Tax Policy, Department of the Treasury.
    We, the undersigned, do hereby agree to the foregoing provisions of 
this MOU.

    Dated: April 21, 1999.
Robert E. Wenzel,
Deputy Commissioner, Internal Revenue Service, Department of the 
Treasury.
    We, the undersigned, do hereby agree to the foregoing provisions of 
this MOU.

    Dated: March 17, 1999.
Richard M. McGahey,
Assistant Secretary, Pension and Welfare Benefits Administration, 
Department of Labor.
    We, the undersigned, do hereby agree to the foregoing provisions of 
this MOU.

    Dated: March 30, 1999.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration, Department of 
Health and Human Services.
[FR Doc. 99-32500 Filed 12-14-99; 8:45 am]
BILLING CODE 4830-01-P; 4510-29-P; 4120-01-P