[Federal Register Volume 76, Number 122 (Friday, June 24, 2011)]
[Proposed Rules]
[Pages 37037-37039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-15891]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[REG-125592-10]
RIN 1545-BJ62


Requirements for Group Health Plans and Health Insurance Issuers 
Relating to Internal Claims and Appeals and External Review Processes 
Under the Patient Protection and Affordable Care Act

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

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SUMMARY: Elsewhere in this issue of the Federal Register, the IRS is 
issuing an amendment to temporary regulations published July 23, 2010 
under the provisions of the Patient Protection and Affordable Care Act 
(the Affordable Care Act) regarding internal claims and appeals and 
external review processes. The IRS is issuing the temporary regulations 
at the same time that the Employee Benefits Security Administration of 
the U.S. Department of Labor and the Center for Consumer Information & 
Insurance Oversight of the U.S. Department of Health and Human Services 
are issuing a substantially similar amendment to interim final 
regulations published July 23, 2010 with respect to group health plans 
and health insurance coverage offered in connection with a group health 
plan under the Employee Retirement Income Security Act of 1974 and the 
Public Health Service Act. The temporary regulations provide guidance 
to employers, group health plans, and health insurance issuers 
providing group health insurance coverage. The text of those temporary 
regulations also serves as the text of these proposed regulations.

DATES: Written or electronic comments and requests for a public hearing 
must be received by July 25, 2011.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-125592-10), Room 
5205, Internal Revenue Service, P.O.

[[Page 37038]]

Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may 
be hand-delivered to: CC:PA:LPD:PR (REG-125592-10), Courier's Desk, 
Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC 
20224. Alternatively, taxpayers may submit comments electronically via 
the Federal eRulemaking Portal at http://www.regulations.gov (IRS REG-
125592-10).

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Karen 
Levin at 202-622-6080; concerning submissions of comments, 
Oluwafunmilayo Taylor at 202-622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Background and Explanation of Provisions

    The temporary regulations published elsewhere in this issue of the 
Federal Register amend Sec.  54.9815-2719T of the Miscellaneous Excise 
Tax Regulations. The proposed and temporary regulations are being 
published as part of a joint rulemaking with the Department of Labor 
and the Department of Health and Human Services (the joint rulemaking). 
The text of those temporary regulations also serves as the text of 
these proposed regulations. The preamble to the temporary regulations 
explains the temporary regulations and these proposed regulations.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866. Therefore, a regulatory assessment is not required. It has also 
been determined that section 553(b) of the Administrative Procedure Act 
(5 U.S.C. chapter 5) does not apply to this proposed regulation. It is 
hereby certified that the collections of information contained in this 
notice of proposed rulemaking will not have a significant impact on a 
substantial number of small entities. Accordingly, a regulatory 
flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) is not required. Section 54.9815-2719T of the temporary 
regulations, as amended, requires both group health insurance issuers 
and group health plans to establish internal claims and appeals and 
external review processes for adverse benefit determinations. Those 
processes require the plan and issuer to disclose evidence relied upon 
in making an adverse benefit determination, to disclose any new 
rationale for upholding an adverse benefit determination as part of an 
internal appeal, to provide notice of an adverse benefit determination 
and of a final internal adverse benefit determination, and to disclose 
the right to an external review. Under the temporary regulations, if a 
health insurance issuer satisfies the obligations to have effective 
internal claims and appeals and external review processes (including 
these information collection requirements that are an inherent part of 
those processes), those obligations are satisfied not just for the 
issuer but also for the group health plan. For group health plans 
maintained by small entities, it is anticipated that the health 
insurance issuer will satisfy those obligations to have effective 
internal claims and appeals and external review processes (including 
these information collection requirements that are an inherent part of 
those processes) for both the plan and the issuer in almost all cases. 
For this reason, these information collection requirements will not 
impose a significant impact on a substantial number of small entities. 
Pursuant to section 7805(f) of the Internal Revenue Code, this 
regulation has been submitted to the Chief Counsel for Advocacy of the 
Small Business Administration for comment on its impact on small 
business.

Comments and Requests for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written comments (a signed original 
and eight (8) copies) or electronic comments that are submitted timely 
to the IRS. Comments are specifically requested on the clarity of the 
proposed regulations and how they may be made easier to understand. All 
comments will be available for public inspection and copying. A public 
hearing may be scheduled if requested in writing by a person that 
timely submits written comments. If a public hearing is scheduled, 
notice of the date, time, and place for the hearing will be published 
in the Federal Register.

Drafting Information

    The principal author of these proposed regulations is Karen Levin, 
Office of the Division Counsel/Associate Chief Counsel (Tax Exempt and 
Government Entities), IRS. The proposed regulations, as well as the 
temporary regulations, have been developed in coordination with 
personnel from the U.S. Department of Labor and the U.S. Department of 
Health and Human Services.

List of Subjects in 26 CFR Part 54

    Excise taxes, Health care, Health insurance, Pensions, Reporting 
and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 54 is proposed to be amended as follows:

PART 54--PENSION EXCISE TAXES

    Paragraph 1. The authority citation for part 54 continues to read 
in part as follows:

    Authority:  26 U.S.C. 7805 * * *

    Par. 2. Proposed Sec.  54.9815-2719 as published on July 23, 2010, 
75 FR 43330, is amended by:
    1. Revising paragraphs (b)(2)(ii)(B), (b)(2)(ii)(E)(1), 
(b)(2)(ii)(F), (c)(2)(xi), (c)(3), (d)(1), (d)(2)(iv), and (e).
    2. Redesignating (b)(2)(ii)(E)(2), (b)(2)(ii)(E)(3), and 
(b)(2)(ii)(E)(4) as (b)(2)(ii)(E)(3), (b)(2)(ii)(E)(4), and 
(b)(2)(ii)(E)(5), respectively.
    3. Adding new paragraph (b)(2)(ii)(E)(2).
    The revisions and addition read as follows:


Sec.  54.9815-2719  Internal claims and appeals and external review 
processes.

* * * * *
    (b) * * *
    (2) * * *
    (ii) * * *
    (B) [The text of proposed Sec.  54.9815-2719(b)(2)(ii)(B) is the 
same as the text of Sec.  54.9815-2719T(b)(2)(ii)(B) published 
elsewhere in this issue of the Federal Register].
* * * * *
    (E) * * *
    (1) [The text of proposed Sec.  54.9815-2719(b)(2)(ii)(E)(1) is the 
same as the text of Sec.  54.9815-2719T(b)(2)(ii)(E)(1) published 
elsewhere in this issue of the Federal Register].
    (2) [The text of proposed Sec.  54.9815-2719(b)(2)(ii)(E)(2) is the 
same as the text of Sec.  54.9815-2719T(b)(2)(ii)(E)(2) published 
elsewhere in this issue of the Federal Register].
* * * * *
    (F) [The text of proposed Sec.  54.9815-2719(b)(2)(ii)(F) is the 
same as the text of Sec.  54.9815-2719T(b)(2)(ii)(F) published 
elsewhere in this issue of the Federal Register].
* * * * *
    (c) * * *
    (2) * * *
    (xi) [The text of proposed Sec.  54.9815-2719(c)(2)(xi) is the same 
as the text of Sec.  54.9815-2719T(c)(2)(xi) published elsewhere in 
this issue of the Federal Register].
* * * * *

[[Page 37039]]

    (3) [The text of proposed Sec.  54.9815-2719(c)(3) is the same as 
the text of Sec.  54.9815-2719T(c)(3) published elsewhere in this issue 
of the Federal Register].
    (d) * * *
    (1) [The text of proposed Sec.  54.9815-2719(d)(1) is the same as 
the text of Sec.  54.9815-2719T(d)(1) published elsewhere in this issue 
of the Federal Register].
* * * * *
    (2) * * *
    (iv) [The text of proposed Sec.  54.9815-2719(d)(2)(iv) is the same 
as the text of Sec.  54.9815-2719T(d)(2)(iv) published elsewhere in 
this issue of the Federal Register].
* * * * *
    (e) [The text of proposed Sec.  54.9815-2719(e) is the same as the 
text of Sec.  54.9815-2719T(e) published elsewhere in this issue of the 
Federal Register].
* * * * *

Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2011-15891 Filed 6-22-11; 4:15 pm]
BILLING CODE 4830-01-P