[Federal Register Volume 71, Number 199 (Monday, October 16, 2006)]
[Notices]
[Pages 60756-60759]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-17123]


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DEPARTMENT OF LABOR

Office of the Secretary


Submission for OMB Review: Comment Request

October 9, 2006.
    The Department of Labor (DOL) has submitted the following public 
information collection requests (ICR) to the Office of Management and 
Budget (OMB) for review and approval in accordance with the Paperwork 
Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35). A copy of 
each ICR, with applicable supporting documentation, may be obtained 
from RegInfo.gov at http://www.reginfo.gov/public/do/PRAMain or by 
contacting Darrin King on 202-693-4129 (this is not a toll-free 
number)/e-mail: [email protected].
    Comments should be sent to Office of Information and Regulatory 
Affairs, Attn: OMB Desk Officer for the Employee Benefits Security 
Administration (EBSA), Office of Management and Budget, Room 10235, 
Washington, DC 20503, telephone: 202-395-7316 / fax: 202-395-6974 
(these are

[[Page 60757]]

not toll-free numbers), within 30 days from the date of this 
publication in the Federal Register.
    The OMB is particularly interested in comments which:
     Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    Agency: Employee Benefits Security Administration.
    Type of Review: Extension without change of currently approved 
collection.
    Title: Notice of Special Enrollment Rights under Group Health 
Plans.
    OMB Number: 1210-0101.
    Frequency: On occasion.
    Type of Response: Third party disclosure.
    Affected Public: Private Sector: Business or other for-profit and 
not-for-profit institutions.
    Number of Respondents: 2,493,046.
    Number of Annual Responses: 8,568,282.
    Total Burden Hours: 1.
    Total Annualized Capital/Startup Costs: $0.
    Total Annual Costs (operating/maintaining systems or purchasing 
services): $77,115.
    Description: Section 734 of the Employee Retirement Income Security 
Act (ERISA), which was added by the Health Insurance Portability and 
Accountability Act of 1996 (Pub. L. 104-191, Aug. 21, 1996) (HIPAA), 
gives the Secretary of Labor, in coordination with the Secretary of 
Health and Human Services (HHS) and the Secretary of the Treasury, 
(collectively, the Departments) the authority to promulgate necessary 
or appropriate regulations to carry out the provisions of Part 7 of 
ERISA (the HIPAA provisions). Among other things, the HIPAA provisions 
limit the extent to which group health plans and their health insurance 
issuers can restrict health coverage based on pre-existing conditions 
for individuals who previously had health coverage. Section 701(f) of 
ERISA also provides special enrollment rights to individuals who have 
previously declined health coverage offered to them to enroll in health 
coverage upon the occurrence of specified events, including when they 
lose other coverage, when employer contributions to the cost of other 
coverage cease, and when they marry, have a child or adopt a child 
(``special enrollment events''). Plans and issuers are required to 
provide for 30-day special enrollment periods following any of these 
events during which individuals who are eligible but not enrolled have 
a right to enroll without being denied enrollment or having to wait for 
a late enrollment opportunity (often called ``open enrollment'').
    The Departments issued Interim Final Rules for Health Insurance 
Portability for Group Health Plans on April 8, 1997 (67 FR 16894), and 
Final Regulations for Health Coverage Portability for Group Health 
Plans and Group Health Insurance Issuers under HIPAA Titles I & IV on 
December 30, 2004 (69 FR 78720). The implementing regulations require 
plans and their issuers to provide all employees a notice describing 
the special enrollment rights at or before the time the employees are 
initially offered the opportunity to enroll in the plan, whether or not 
they enroll. The Departments believe that the special enrollment notice 
is necessary to ensure that employees understand their enrollment 
options and will be able to exercise their rights during any 30-day 
enrollment period following a special enrollment event. The final 
regulations provide detailed sample language describing special 
enrollment rights for use in the notice. The sample language is 
expected to reduce costs for group health plans since it eliminates the 
need for plans to develop their own language.
    Under the HIPAA provisions, a group health plan may require, as a 
pre-condition to having a special enrollment right to enroll in group 
health coverage after losing eligibility under other coverage, that an 
employee or beneficiary who declines coverage provide the plan a 
written statement declaring whether he or she is declining coverage 
because of having other coverage. Failure to provide such a written 
statement can then be treated as eliminating the individual's later 
right to special enrollment upon losing eligibility for such other 
coverage. The implementing regulations further establish that the right 
to special enroll can be denied in such circumstances only if employees 
are given notice of the requirement for a written statement and the 
consequences of failing to provide the written statement, at the time 
an employee declines enrollment. As part of the special enrollment 
notice, it must be given at or before the time the employee is 
initially offered the opportunity to enroll.
    This information collection request (ICR) covers the requirement in 
the implementing regulations under section 701(f) for a special 
enrollment notice.
    This information collection implements the disclosure obligation of 
a plan to inform all employees, at or before the time they are 
initially offered the opportunity to enroll in the plan, of the plan's 
special enrollment rules. The regulations require plans and their 
issuers to provide all employees with a notice describing their special 
enrollment rights, whether or not they enroll. This provision is 
necessary to make sure that employees are informed of their special 
enrollment rights before they take any action that may affect those 
rights, so that they will be able to aware of and able to exercise 
their rights within any 30-day enrollment period following a special 
enrollment event. Absent the notice requirement, there is a risk that 
employees will not know in advance that they have special enrollment 
rights and will not be able to take timely action to enroll in group 
health coverage following a special enrollment event.
    Agency: Employee Benefits Security Administration.
    Type of Review: Extension without change of currently approved 
collection.
    Title: Notice of Pre-Existing Condition Exclusion Under Group 
Health Plans.
    OMB Number: 1210-0102.
    Frequency: On occasion.
    Type of Response: Third party disclosure.
    Affected Public: Private Sector: Business or other for-profit and 
Not-for-profit institutions.
    Number of Respondents: 747,914.
    Number of Annual Responses: 3,832,337.
    Total Burden Hours: 5,714.
    Total Annualized Capital/Startup Costs: $0.
    Total Annual Costs (operating/maintaining systems or purchasing 
services): $1,120,709.
    Description: Section 734 of the Employee Retirement Income Security 
Act (ERISA), which was added by the Health Insurance Portability and 
Accountability Act of 1996 (Pub. L. 104-191, Aug. 21, 1996) (HIPAA), 
gives the Secretary of Labor, in coordination with the Secretary of 
Health and Human Services (HHS) and the Secretary of the Treasury, 
(collectively, the Departments) the authority to

[[Page 60758]]

promulgate necessary or appropriate regulations to carry out the 
provisions of Part 7 of ERISA (the HIPAA provisions).
    The portability provisions of Part 7 limit the extent to which 
group health plans and their health insurance issuers can restrict 
health coverage based on pre-existing conditions for individuals who 
previously had health coverage and make it easier for such individuals 
to continue their health coverage when they change jobs by limiting the 
ability of group health plans and health insurance issuers to exclude 
coverage based on a pre-existing condition. The provisions limit all 
pre-existing condition exclusion periods to twelve months (or eighteen 
months for certain individuals who enroll late in the plan). Further, a 
group health plan must reduce the twelve- or eighteen-month exclusion 
period by the length of an individual's previous ``continuous health 
coverage.'' Continuous health coverage, in this context, means health 
coverage without any significant breaks in coverage. A significant 
break in coverage is any period without coverage that lasts for 63 days 
or more. Following a significant break in coverage, an individual is 
not entitled to any credit for prior coverage to reduce a preexisting 
condition exclusion period.
    The Departments issued Interim Final Rules for Health Insurance 
Portability for Group Health Plans on April 8, 1997 (67 FR 16894), and 
Final Regulations for Health Coverage Portability for Group Health 
Plans and Group Health Insurance Issuers under HIPAA Titles I & IV on 
December 30, 2004 (69 FR 78720). See 29 CFR 2590.701-1 through 701-7. 
These regulations impose certain information collection and other 
requirements mandated by portability provisions enacted in Section 701 
of HIPAA.
    In order to offset burdens on plans and issuers, the regulations 
require participants to demonstrate their prior creditable coverage in 
some circumstances. In order to help balance the burdens shifted to the 
participants, the regulations provide the following protections 
relating to providing prior creditable coverage and preexisting 
condition exclusions:

General Notice

    Plans and issuers that impose preexisting condition exclusion 
periods must give employees eligible for coverage, as part of any 
enrollment application, a general notice that describes the plan's 
preexisting condition exclusion, including that the plan will reduce 
the maximum exclusion period by the length of an employee's prior 
creditable coverage. If there are no such enrollment materials, the 
notice must be provided as soon after a request for enrollment as is 
reasonably possible. The final regulation includes sample language for 
the general notice. See 29 CFR 2590.701-3(c). This language is likely 
to reduce the cost of providing the notice.
    Plans that use the alternative method of crediting coverage 
provided in the regulations must disclose their use of that method at 
the time of enrollment and describe how it operates. They must also 
explain that a participant has a right to establish prior creditable 
coverage through a certificate or other means and to request a 
certificate of prior coverage from a prior plan or issuer. Finally, 
plans or issuers must offer to assist the participant in obtaining a 
certificate from prior plans or issuers, if necessary. See 29 CFR 
2590.701-4(c)(4).

Individual Notice

    Before a plan or issuer may impose a preexisting condition 
exclusion on a particular participant or dependent, it must give the 
individual written notice describing the length of the preexisting 
condition exclusion that will be imposed and the length of offsetting 
prior coverage the plan has recognized (individual notice). The 
individual notice must also describe the basis for the plan's decision 
regarding prior creditable coverage, an explanation of the individual's 
right to submit additional evidence of creditable coverage, and any 
appeal procedure established by the plan or issuer. The notice need not 
identify any medical conditions that could be subject to the exclusion.
    The general notice and the individual notice both protect 
individuals by informing them of their Part 7 rights, enabling them to 
take any necessary corrective action, exercise their rights, and to 
understand the plan's provisions and how they plan to his or her 
personal situation.
    The information collections covered by this ICR are mandated third 
party disclosures of information by group health plans and issuers to 
individuals eligible for group health coverage and/or participants in 
such plans against whom preexisting condition exclusions may be 
imposed. The information is necessary to enable individuals to 
understand and exercise their rights under Part 7 of ERISA. No 
information is required to be provided to the government under these 
regulations.
    Agency: Employee Benefits Security Administration.
    Type of Review: Extension without change of currently approved 
collection.
    Title: Establishing Creditable Coverage under Group Health Plans.
    OMB Number: 1210-0103.
    Frequency: On occasion.
    Type of Response: Third party disclosure.
    Affected Public: Private Sector: Business or other for-profit and 
Not-for-profit institutions.
    Number of Respondents: 2,493,046.
    Number of Annual Responses: 16,250,284.
    Total Burden Hours: 75,306.
    Total Annualized Capital/Startup Costs: $0.
    Total Annual Costs (operating/maintaining systems or purchasing 
services): $11,456,011.
    Description: Section 734 of the Employee Retirement Income Security 
Act (ERISA), which was added by the Health Insurance Portability and 
Accountability Act of 1996 (Pub. L. 104-191, Aug. 21, 1996) (HIPAA), 
provides that the Secretary of Labor, in coordination with the 
Secretary of Health and Human Services (HHS) and the Secretary of the 
Treasury, (collectively, the Departments) may promulgate such 
regulations (including interim final rules) as may be necessary or 
appropriate to carry out the provisions of Part 7 of ERISA (the HIPAA 
provisions). In addition, section 701(e)(3) of ERISA, added by HIPAA 
(with parallel provisions added to the Public Health Service Act (PHSA) 
and the Internal Revenue Code (the Code)), requires that the Secretary 
of Labor issue rules to ensure that group health plans, health 
insurance issuers, and other specified entities provide certain 
required disclosures to individuals regarding their health care 
coverage in order to prevent adverse effects on the individual's 
subsequent health coverage. These required disclosures include 
individual certifications of prior health coverage (certificates) and, 
upon the request of a plan that counts or ``credits'' prior health 
coverage in determining subsequent coverage for specific categories of 
benefits, additional information about coverage under these categories 
of benefits (called the ``alternative method'' of crediting coverage).
    In order to effectuate these and other purposes, the Department 
issued Interim Final Rules for Health Insurance Portability for Group 
Health Plans on April 8, 1997 (62 FR 16894), and Final Regulations for 
Health Coverage Portability for Group Health Plans and Group Health 
Insurance Issuers under HIPAA Titles I & IV on December 30, 2004 (69 FR 
78720) (final HIPAA portability regulations). The HIPAA portability 
provisions limit the extent to

[[Page 60759]]

which group health plans and their health insurance issuers can 
restrict health coverage based on preexisting conditions for 
individuals that were previously covered by health coverage. The 
provisions limit all preexisting condition exclusion periods to twelve 
months, or eighteen months for certain individuals who enroll in the 
plan after their initial opportunity to enroll. Further, the twelve- or 
eighteen-month exclusion period must be reduced by the length of an 
individual's prior continuous health coverage, as reflected in 
certificates or demonstrated through other means. ``Continuous health 
coverage'' means coverage that did not have any significant breaks in 
coverage. A significant break in coverage, for this purpose, is defined 
as a period of 63 days or more. Following a significant break in 
coverage, prior health coverage is no longer ``creditable,'' that is, 
entitled to be taken as a credit to reduce a plan's preexisting 
condition exclusion period.
    Section 701(e) of ERISA requires group health plans and health 
insurance issuers to provide certificates of an individual's prior 
health coverage on termination of coverage, at the time an individual 
would lose coverage in the absence of continuation coverage 
(``COBRA''), and when an individual loses coverage after COBRA coverage 
ceases. Certificates must also be provided on request and may be 
requested at any time while an individual is covered by the plan and 
for 24 months after coverage ceases. (Certificates must also be 
provided by other entities that provide creditable coverage, like 
Medicare and Medicaid.) The certificate must show the number of days of 
creditable coverage earned by the individual and also include an 
educational statement describing the Part 7 rights. The regulations 
provide model language for the educational statement. In addition, the 
regulations require a group health plan to establish written procedures 
governing the process for requesting a certificate.
    The individual who receives a certificate may present it to his or 
her new group health plan in order to receive credit for prior health 
coverage under the new plan. The certificate provides assurance to the 
individual's new group health plan or its health insurance issuer that 
the individual had health coverage for a certain number of days that 
should be credited toward reducing any preexisting condition exclusion 
periods under the new health plan.
    Because participants may be required to demonstrate creditable 
coverage and the status of their dependents in some circumstances in 
order to assert rights under Part 7, the regulations provide the 
following protections:
    (a) If an individual is required to demonstrate dependent status, 
the plan or issuer is required to treat the individual as having 
furnished a certificate showing the dependent status if the individual 
attests to such dependency and the period of such status, and the 
individual cooperates with the plan's or issuer's efforts to verify the 
dependent status. (See 29 CFR 2590.701-5(a)(5)(ii).)
    (b) A plan is required treat an individual as having furnished a 
certificate if the individual attests to the period of creditable 
coverage, presents relevant corroborating evidence, and cooperates with 
the plan's efforts to verify the individual's coverage. (See 29 CFR 
2590.701-5(c).)
    This ICR also covers an information collection requirement imposed 
under the regulations in connection with the alternative method of 
crediting coverage established by the regulations. The regulations 
permit a plan to adopt, as its method of crediting prior health 
coverage, provisions that impose different preexisting condition 
exclusion periods with respect to different categories of benefits, 
depending on prior coverage in that category. In such a case, the 
regulations require former plans to provide additional information upon 
request to new plans in order to establish an individual's length of 
prior creditable coverage within that category of benefits.
    This information collection implements statutorily prescribed 
requirements necessary to permit individuals to establish prior 
creditable health coverage and to enable group health plans and issuers 
to verify creditable coverage. Group health plans and the plans' health 
insurance issuers are required to issue certificates as proof of prior 
creditable health coverage. These certificates assist individuals in 
retaining prior health coverage upon changes in employment or in other 
circumstances when coverage end and enable plans. A model certificate, 
which includes a model educational statement (``Statement of HIPAA 
Rights''), appears in the Final Regulations. The model certificate 
contains the minimum information required for such a certification. The 
information is used by participants in group health plans and by group 
health plans and health coverage issuers to establish an individual's 
rights to group health coverage under Part 7.

Darrin A. King,
Acting Departmental Clearance Officer.
[FR Doc. E6-17123 Filed 10-13-06; 8:45 am]
BILLING CODE 4510-29-P