[Public Papers of the Presidents of the United States: William J. Clinton (1998, Book II)]
[July 7, 1998]
[Pages 1189-1190]
[From the U.S. Government Publishing Office www.gpo.gov]



Memorandum on Ensuring Compliance With the Health Insurance Portability 
and Accountability Act
July 7, 1998

Memorandum for the Secretary of Labor, the Secretary of Health and Human 
Services, the Director of the Office of Personnel Management

Subject: Ensuring Compliance with the Health Insurance Portability and 
Accountability Act of 1996

    Earlier this year, my Administration received a number of troubling 
reports that health insurers were circumventing insurance protections 
under the Health Insurance Portability and Accountability Act of 1996 
(HIPAA) by giving financial incentives to agents to avoid enrolling 
Americans with pre-existing conditions. In addition, we learned that 
some agents were delaying the processing of applications submitted by 
qualified individuals in order to ensure that the applicant had a 
sufficient break in coverage to lose eligibility for HIPAA protections. 
Such actions clearly were and are inconsistent with the letter and 
spirit of HIPAA.
    In February, I directed the Department of Health and Human Services 
(HHS) to take appropriate actions to encourage health insurers and their 
agents to stop all such harmful practices. The Health Care Financing 
Administration (HCFA) responded by immediately releasing a strong 
guidance bulletin on March 18 to every insurance commissioner in the 
Nation, advising them of our strong commitment to ensure compliance with 
HIPAA.
    Today, I am taking additional actions to ensure that health plans 
comply with this law. I direct the Office of Personnel Management (OPM) 
to use its contractual relationship with health plans to improve HIPAA 
compliance. The

[[Page 1190]]

OPM oversees the Federal Employees Health Benefit Program (FEHBP), the 
Nation's largest employer-sponsored health benefits program with 9 
million enrollees and 350 participating health plans.
    Specifically, I direct the OPM to take all appropriate action--up to 
and including termination of a participating health plan from the 
FEHBP--if the OPM determines, consistent with HIPAA and implementing 
regulations, that a plan is engaging in insurance practices that are 
inconsistent with the letter and spirit of HIPAA. In order to be 
eligible to participate in the FEHBP, carriers subject to HIPAA will 
have to certify to the OPM that they are providing access to health 
insurance in compliance with HIPAA. Such action by the OPM will provide 
another enforcement tool to the Federal Government without in any way 
altering or hindering any other enforcement action by the HCFA or State 
insurance commissioners.
    To help ensure that the OPM can take these important enforcement 
actions, I direct the HCFA to immediately send to the OPM reports of 
violations by insurers or their representatives that preclude or inhibit 
access to the insurance protections provided under HIPAA. Any such 
referral to the OPM would not alter the responsibility of States or the 
HCFA to utilize any and all enforcement tools at their disposal to 
ensure HIPAA compliance.
    Finally, I direct that the HHS and the Department of Labor report to 
me, through the Vice President, within 6 months on the successes and 
shortcomings of HIPAA. This report should be produced after consultation 
with the States and the National Association of Insurance Commissioners 
and should include specific legislative or regulatory recommendations to 
further strengthen this law.
    My Administration has zero tolerance for any actions that hinder 
vulnerable Americans from accessing insurance, consistent with HIPAA's 
protections. This directive is intended to ensure that health plans come 
into compliance with this important statute so that Americans are 
assured these insurance protections.

                                                      William J. Clinton