[Federal Register Volume 69, Number 250 (Thursday, December 30, 2004)]
[Proposed Rules]
[Pages 78825-78827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28114]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

45 CFR Part 146

RIN 0938-AL64


Request for Information on Benefit-Specific Waiting Periods Under 
HIPAA Titles I & IV

AGENCIES: Internal Revenue Service, Department of the Treasury; 
Employee Benefits Security Administration, Department of Labor; Centers 
for Medicare & Medicaid Services, Department of Health and Human 
Services.

ACTION: Request for information.

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SUMMARY: The Departments invite comments about benefit-specific waiting 
periods. This solicitation is to ensure that the public can provide 
input into any criteria used to determine whether a benefit-specific 
waiting period utilized by a group health plan or issuer is a 
preexisting condition exclusion under HIPAA. The Departments are 
requesting this information to help decide whether to issue any 
guidance on this question, and the content of any such guidance.

DATES: The Departments request that comments be submitted on or before 
March 30, 2005.

ADDRESSES: Written comments should be submitted with a signed original 
and three copies (except for electronic submissions) to any of the 
addresses specified below. Any comment that is submitted to any 
Department will be shared with the other Departments.
    Comments to the IRS can be addressed to: CC:PA:LPD:PR (REG-130370-
04), Room 5203, Internal Revenue Service, POB 7604, Ben Franklin 
Station, Washington, DC 20044.

    In the alternative, comments may be hand-delivered between the 
hours of 8 a.m. and 5 p.m. to: CC:PA:LPD:PR (REG-130370-04), Courier's 
Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., 
Washington DC 20224.
    Alternatively, comments may be transmitted electronically via the 
IRS Internet site at: www.irs.gov/regs.
    Comments to the Department of Labor can be addressed to: U.S. 
Department of Labor, Employee Benefits Security Administration, 200 
Constitution Avenue NW., Room C-5331, Washington, DC 20210, Attention: 
Benefit-Specific Waiting Period Comments.
    Alternatively, comments may be hand-delivered between the hours of 
9 a.m. and 5 p.m. to the same address. Comments may also be transmitted 
to the Department of Labor by e-mail to: [email protected].
    Comments to HHS can be submitted as described below:
    In commenting, please refer to file code CMS 2150-NC. Because of 
staff and resource limitations, we cannot accept comments by facsimile 
(FAX) transmission.
    You may submit comments in one of three ways (no duplicates, 
please):
    Electronically. You may submit electronic comments to http://www.cms.hhs.gov/regulations/ecomments (attachments should be in 
Microsoft Word, WordPerfect, or Excel; however, we prefer Microsoft 
Word).
    By mail. You may mail written comments (one original and two 
copies) to the following address ONLY: Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Attention: CMS-2150-
NC, P.O. Box 8017, Baltimore, MD 21244-8010.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments (one original and two copies) before the 
close of the comment period to one of the following addresses. If you 
intend to deliver your comments to the Baltimore address, please call 
telephone number (410) 786-7195 in advance to schedule your arrival 
with one of our staff members. Room 445-G, Hubert H. Humphrey Building, 
200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    (Because access to the interior of the HHH Building is not readily 
available to persons without Federal Government identification, 
commenters are encouraged to leave their comments in the CMS drop slots 
located in the main lobby of the building. A stamp-in clock is 
available for persons wishing to retain a proof of filing by stamping 
in and

[[Page 78826]]

retaining an extra copy of the comments being filed.)
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    All submissions to the IRS will be open to public inspection and 
copying in room 1621, 1111 Constitution Avenue, NW., Washington, DC 
from 9 a.m. to 4 p.m.
    All submissions to the Department of Labor will be open to public 
inspection and copying in the Public Disclosure Room, Employee Benefits 
Security Administration, U.S. Department of Labor, Room N-1513, 200 
Constitution Avenue, NW., Washington, DC from 8:30 a.m. to 4:30 p.m.
    All submissions timely submitted to HHS will be available for 
public inspection as they are received, generally beginning 
approximately three weeks after publication of a document, at the 
headquarters for the Centers for Medicare & Medicaid Services, 7500 
Security Boulevard, Baltimore, MD 21244, Monday through Friday of each 
week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public 
comments, phone (410) 786-7195.

FOR FURTHER INFORMATION CONTACT: Dave Mlawsky, Centers for Medicare & 
Medicaid Services (CMS), Department of Health and Human Services, at 1-
877-267-2323 ext. 61565; Amy Turner, Employee Benefits Security 
Administration, Department of Labor, at (202) 693-8335; or Russ 
Weinheimer, Internal Revenue Service, Department of the Treasury, at 
(202) 622-6080.

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 copies of Department of Labor publications 
concerning changes in health care law may call a toll free number, 1-
866-444-EBSA (3272), or access the publications on-line at www.dol.gov/ebsa, the Department of Labor's Web site. These regulations as well as 
other information on the new health care laws are also available on the 
Department of Labor's interactive Web pages, Health Elaws. In addition, 
CMS's publication entitled ``Protecting Your Health Insurance 
Coverage'' is available by calling 1-800-633-4227 or on the Department 
of Health and Human Services' Web site (www.cms.hhs.gov/hipaa1), which 
includes the interactive Web pages, HIPAA Online. Copies of the HIPAA 
regulations, as well as notices and press releases related to HIPAA and 
other health care laws, are also available at the above-referenced Web 
sites.

Background

    The Health Insurance Portability and Accountability Act of 1996 
(HIPAA) was enacted on August 21, 1996 (Pub. L. 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 in the group and the individual insurance 
markets, including group health plan coverage provided in connection 
with employment. 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 insurance 
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 insurance coverage for employers and 
individuals. The HIPAA portability provisions also include rules that 
guarantee access to individual health coverage for certain people who 
lose their group coverage. These provisions also set forth other 
requirements imposed on health insurance issuers.
    The Departments issued interim regulations published in the Federal 
Register on April 8, 1997 to carry out these provisions. Today, 
elsewhere in this issue of the Federal Register, the Departments are 
publishing final regulations governing the HIPAA portability 
requirements. Also being published is a set of proposed regulations 
addressing additional and discrete issues with an invitation for 
comments.
    Included in today's final regulations is an example illustrating 
that a plan providing first-day coverage for other medical/surgical 
benefits but imposing a waiting period on benefits for pregnancy is 
imposing a preexisting condition exclusion. Because HIPAA prohibits 
imposing a preexisting condition exclusion on pregnancy benefits, the 
final regulations clarify that this plan provision is impermissible. 
Several comments (including those of several state insurance 
commissioners' offices) have asked the Departments to clarify that a 
preexisting condition exclusion would also include any benefit-specific 
waiting period or other temporary exclusion of specific benefits. 
Essentially, these comments argue that some plans and issuers use 
benefit-specific waiting periods that are, in effect, preexisting 
condition exclusions that do not comply with HIPAA's statutory limits. 
The rationale for this argument is that these exclusion periods are 
likely to affect principally individuals who had a condition before the 
first day of any coverage under the plan or health insurance coverage. 
In addition, other comments suggest that these exclusions violate 
HIPAA's nondiscrimination provisions. Nonetheless, the comments do not 
suggest that it would be impermissible to impose a waiting period for 
all benefits available under the plan or to impose permanent exclusions 
on specific benefits (that is, these types of exclusions would not be 
considered a preexisting condition exclusion nor would they be 
considered discrimination based on health status).

Comments

    The Departments welcome further comments on this issue of benefit-
specific waiting periods. In particular, the Departments are interested 
in comments reflecting the experience of group health plans, health 
insurance issuers, states, individuals, and other interested parties 
with waiting periods on specific benefits such as tonsillectomies, 
hernia repairs, and organ transplants. Rules under consideration might 
also affect plans that cover only emergency services for an initial 
period; comments on these types of provisions are also welcome. One 
possible standard for determining whether a benefit-specific waiting 
period is operating as a preexisting condition exclusion is whether the 
waiting period is likely to affect principally individuals who had a 
condition before the first day of any coverage under the plan or health 
insurance coverage. Several factors affect the application of such a 
standard to a particular plan's waiting period, including the relevant 
population considered to determine whether the impact is likely to 
affect principally individuals who had a condition before the first day 
of coverage, the condition to which a plan's waiting period is applied, 
and the length of a plan's

[[Page 78827]]

waiting period (because, generally, as the waiting period becomes 
longer, a greater number of individuals affected will not have had the 
condition before enrolling). The Departments welcome comments on this 
standard and these factors, and also invite suggestions for alternative 
standards.
    In order to quantify the costs and benefits associated with an 
interpretation that certain benefit-specific waiting periods function 
as preexisting condition exclusions, the Departments are interested 
also in comments, studies, surveys, or reports on the prevalence of 
such exclusions in group health coverage and individual health 
insurance coverage, what types of conditions or treatments are subject 
to benefit-specific waiting periods, the duration of such periods, and 
alternative cost-control mechanisms that may be available.

    Signed at Washington, DC, this 8th day of December, 2004.
Nancy J. Marks,
Associate Chief Counsel/Division Counsel, Tax Exempt and Government 
Entities, Internal Revenue Service, Department of the Treasury.

    Signed at Washington, DC, this 9th day of December, 2004.
William F. Sweetnam, Jr.,
Benefits Tax Counsel, Department of the Treasury.

    Signed at Washington, DC, this 1st day of December, 2004.
Ann L. Combs,
Assistant Secretary, Employee Benefits Security Administration, U.S. 
Department of Labor.

    Dated: November 24, 2004.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.

    Dated: December 2, 2004.
Tommy G. Thompson,
Secretary, Department of Health and Human Services.
[FR Doc. 04-28114 Filed 12-29-04; 8:45 am]
BILLING CODE 4830-01-P; 4510-29-P; 4120-01-P