[Federal Register Volume 72, Number 128 (Thursday, July 5, 2007)]
[Rules and Regulations]
[Pages 36610-36612]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-13039]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Resources and Services Administration

42 CFR Part 100

RIN 0905-AA68


National Vaccine Injury Compensation Program: Calculation of 
Average Cost of a Health Insurance Policy

AGENCY: Health Resources and Services Administration (HRSA), HHS.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: Subtitle 2 of Title XXI of the Public Health Service Act, as 
enacted by the National Childhood Vaccine Injury Act of 1986, as 
amended (the Act), governs the National Vaccine Injury Compensation 
Program (VICP). The VICP, administered by the Secretary of Health and 
Human Services (the Secretary), provides that a proceeding for 
compensation for a vaccine-related injury or death shall be initiated 
by service upon the Secretary, and the filing of a petition with the 
United States Court of Federal Claims (the Court). In some cases, the 
injured individual may receive compensation for future lost earnings, 
less appropriate taxes and the ``average cost of a health insurance 
policy, as determined by the Secretary.'' The final rule establishes 
the new method of calculating the average cost of a health insurance 
policy and determines the amount of the average cost of a health 
insurance policy to be deducted from the compensation award.

DATES: This regulation is effective August 6, 2007.

FOR FURTHER INFORMATION CONTACT: Tamara Overby, Chief, Policy Analysis 
Branch, Division of Vaccine Injury Compensation, Healthcare Systems 
Bureau, Health Resources and Services Administration (HRSA), Room 11C-
26, Parklawn Building, 5600 Fishers Lane, Rockville, Maryland 20857; e-
mail: [email protected]; telephone number: (301) 443-6593.

SUPPLEMENTARY INFORMATION: On June 9, 2006, the Secretary published in 
the Federal Register (71 FR 33420), a Notice of Proposed Rulemaking 
(NPRM) to revise regulations for the National Vaccine Injury 
Compensation Program (VICP) to establish a new method of calculating 
the average cost of a health insurance policy. The public comment 
period on the NPRM closed on August 8, 2006.
    The Secretary received one written comment. The one commenter 
stated that the proposed rule raises both Federalism and Constitutional 
issues. The Secretary has considered this comment and notes that 
section 2115(a)(3)(B) of the Public Health Service Act gives explicit 
authority to the Secretary to determine the average cost of a health 
insurance policy.
    Based on the new methodology, the amount of a health insurance 
policy to be deducted from a compensation award for the 12-month 
period, October 1, 2006--September 30, 2007 is $363.12 per month. In 
August 2006, Medical Expenditure Panel Survey-Insurance Component 
(MEPS-IC), available at http://www.meps.ahrq.gov, published the annual 
2004 average total single premium per enrolled employee at private-
sector establishments that provide health insurance. The figure 
published was $3,705. This figure is divided by 12 months to determine 
the cost per month of $308.75 which is the proposed new baseline figure 
for 2004. The baseline of $308.75 shall be increased or decreased by 
the percentage change reported by the most recent ``Employer Health 
Benefits'' Annual Survey, Kaiser Family Foundation and Health Research 
and Educational Trust (KFF/HRET) survey at http://www.kff.org. The 
percentage increase from 2004-2005 was 9.2 percent. By adding this 
percentage increase, the calculated average monthly cost of a health 
insurance policy in 2005 is $337.16. The KFF/HRET reported increase 
from 2005-2006 was 7.7 percent. By adding this percentage increase to 
the calculated $337.16 for 2005, the calculated average cost of a 
health insurance policy in 2006 is $363.12 per month.
    Because the KFF/HRET survey is published annually, the Department 
will periodically (generally on an annual basis) recalculate the 
average cost of a health insurance policy by obtaining a new baseline 
from the latest MEPS-IC data and updating this

[[Page 36611]]

baseline using the percentage change(s) reported by the most recent 
data from KFF/HRET or other authoritative source that may be more 
accurate or appropriate in the future. The updated calculation will be 
published as a notice in the Federal Register and filed with the Court.

Economic and Regulatory Impact

Regulatory Flexibility Act and Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when rulemaking is 
necessary, to select regulatory approaches that provide the greatest 
net benefits (including potential economic, environmental, public 
health, safety distributive and equity effects). In addition, under the 
Regulatory Flexibility Act of 1980 (RFA), if a rule has a significant 
economic effect on a substantial number of small entities, the 
Secretary must specifically consider the economic effect of a rule on 
small entities and analyze regulatory options that could lessen the 
impact of the rule.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget. 
Executive Order 12866 requires that all regulations reflect 
consideration of alternatives, of costs, of benefits, of incentives, of 
equity, and of available information. Regulations must meet certain 
standards, such as avoiding an unnecessary burden. Regulations that are 
``significant'' because of cost, adverse effects on the economy, 
inconsistency with other agency actions, effects on the budget, or 
novel legal or policy issues, require special analysis.
    The Secretary has determined that minimal resources, if any, are 
required to implement the provisions included in this regulation. 
Therefore, in accordance with the RFA, and the Small Business 
Regulatory Enforcement Fairness Act of 1996, which amended the RFA, the 
Secretary certifies that this Final Rule will not affect any entities 
defined as small under this Act and will not have a significant impact 
on a substantial number of small entities.
    This Final Rule does not meet the criteria for a major rule as 
defined by Executive Order 12866. The Secretary has determined that 
this Final Rule is not a ``major rule'' within the meaning of the 
statute providing for Congressional Review of Agency Rulemaking, 5 
U.S.C. 801. The Secretary conducted a cost analysis comparing the two 
methodologies using a single claim. This difference was multiplied by 
the annual average percent of claims compensated that include this 
calculation (20 percent) in which the award for lost wages is reduced 
by this more accurate amount, resulting in a slightly larger award. The 
new methodology is estimated to increase the annual total amount of 
awards by $50,000. Therefore, the additional cost to the Federal 
Government will be about $50,000 per year.
    The table below compares the average cost of a health insurance 
policy using MEPS-IC only, KFF/HRET only and the new methodology.

----------------------------------------------------------------------------------------------------------------
                          Year                             KFF/HRET only       MEPS-IC only     New methodology
----------------------------------------------------------------------------------------------------------------
2000...................................................               $202            $221.22        \1\ $206.44
2001...................................................                221             240.77         \2\ 232.46
2002...................................................                255             265.75         \3\ 276.98
2003...................................................                282             290.08         \4\ 309.61
2004...................................................                308             308.75         \5\ 336.59
2005...................................................                335                 NA         \6\ 352.25
2006...................................................                354                 NA        \7\ 363.12
----------------------------------------------------------------------------------------------------------------
\1\ 1998 MEPS-IC increased by 1999 and 2000 percent changes from KFF/HRET.
\2\ 1999 MEPS-IC increased by 2000 and 2001 percent changes from KFF/HRET.
\3\ 2000 MEPS-IC increased by 2001 and 2002 percent changes from KFF/HRET.
\4\ 2001 MEPS-IC increased by 2002 and 2003 percent changes from KFF/HRET.
\5\ 2002 MEPS-IC increased by 2003 and 2004 percent changes from KFF/HRET.
\6\ 2003 MEPS-IC increased by the 2004 and 2005 percent changes from KFF/HRET.
\7\ 2004 MEPS-IC increased by the 2005 and 2006 percent changes from KFF/HRET.
N/A--Not available due to 2-year lag in reporting data.

The table below shows a comparison of the average cost of a health 
insurance policy using both methodologies, and the percent change 
between these methodologies.

----------------------------------------------------------------------------------------------------------------
                                                                                                 Percent change
                          Year                            Old methodology    New methodology     (old vs. new)
----------------------------------------------------------------------------------------------------------------
2000...................................................            $276.28            $206.44                -25
2001...................................................             294.24             232.46                -21
2002...................................................             313.78             276.98                -12
2003...................................................             332.60             309.61                 -7
2004...................................................             353.81             336.59                 -5
2005...................................................             374.82             352.25                 -6
2006...................................................         \a\ 397.45             363.12                -9
----------------------------------------------------------------------------------------------------------------
\a\ Revise this number when September 2006 CPI is published on October 31, 2006.

In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

Unfunded Mandates Reform Act of 1995

    The Secretary has determined that this Final Rule will not have 
effects on State, local, and tribal governments and on the private 
sector such as to require consultation under the Unfunded Mandates 
Reform Act of 1995.

Federalism Impact Statement

    The Secretary has also reviewed this Final Rule in accordance with 
Executive

[[Page 36612]]

Order 13132 regarding federalism, and has determined that it does not 
have ``federalism implications.'' The Final Rule would not ``have 
substantial direct effects on the States, or on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government.''

Impact on Family Well-Being

    This Final Rule will not adversely affect the following elements of 
family well-being: family safety, family stability, marital commitment; 
parental rights in the education, nurture and supervision of their 
children; family functioning, disposable income or poverty; or the 
behavior and personal responsibility of youth, as determined under 
section 654(c) of the Treasury and General Government Appropriations 
Act of 1999.

Impact of the New Rule

    This Final Rule revises Sec.  100.2 to incorporate a new 
methodology for calculating the average cost of a health insurance 
policy. This new methodology will result in a more accurate reflection 
of the actual average cost of a health insurance policy as compared to 
the old methodology which resulted in a number that was too high.

Paperwork Reduction Act of 1980

    This Final Rule has no information collection requirements.

List of Subjects in 42 CFR Part 100

    Biologics, Compensation, Health insurance, Immunizations.

    Dated: January 28, 2007.
Elizabeth M. Duke,
Administrator, HRSA.
    Approved: March 29, 2007.
Michael O. Leavitt,
Secretary.

    Editorial Note: This document was received at the Office of the 
Federal Register on June 29, 2007.

0
For the reasons stated above, HHS amends part 100 of 42 CFR as follows:

PART 100--VACCINE INJURY COMPENSATION

0
1. The authority section for 42 CFR part 100 is revised to read as 
follows:

    Authority: Secs. 312 and 313 of Pub. L. 99-660, 100 Stat. 3779-
3782 (42 U.S.C. 300aa-1 note); sec. 2114(c) and (e) of the PHS Act 
(42 U.S.C. 300aa-14(c) and (e)); sec. 2115(a)(3)(B) of the PHS Act 
(42 U.S.C. 300aa-15(a)(3)(B)); sec. 904(b) of Pub. L. 105-34, 111 
Stat. 873; sec. 1503 of Pub. L. 105-277, 112 Stat. 2681-741; and 
sec. 523(a) of Pub. L. 106-170, 113 Stat. 1927-1928.


0
2. Section 100.2 is revised to read as follows:


Sec.  100.2  Average cost of a health insurance policy.

    For purposes of determining the amount of compensation under the 
VICP, section 2115(a)(3)(B) of the PHS Act, 42 U.S.C. 300aa-
15(a)(3)(B), provides that certain individuals are entitled to receive 
an amount reflecting lost earnings, less certain deductions. One of the 
deductions is the average cost of a health insurance policy, as 
determined by the Secretary. The Secretary has determined that the 
average cost of a health insurance policy is $363.12 for 2006. This 
figure is calculated periodically (generally on an annual basis) using 
the most recent Medical Expenditure Panel Survey-Insurance Component 
(MEPS-IC) data available as the baseline for the average monthly cost 
of a health insurance policy. This baseline is adjusted by the annual 
percentage increase/decrease obtained from the most recent annual 
Kaiser Family Foundation and Health Research and Educational Trust 
(KFF/HRET) Employer Health Benefits survey or other authoritative 
source that may be more accurate or appropriate in the future. The 
revised amount will be effective upon its delivery by the Secretary to 
the United States Court of Federal Claims, and the amount will be 
published as a notice in the Federal Register periodically (generally 
on an annual basis).

[FR Doc. E7-13039 Filed 7-3-07; 8:45 am]
BILLING CODE 4165-15-P