Secs. 2701 through 2763, 2791, and 2792 of the Public Health Service Act, 42 U.S.C. 300gg through 300gg-63, 300gg-91, and 300gg-92.
(a) Part 146 of this subchapter implements sections 2701 through 2723 of the Public Health Service Act (PHS Act, 42 U.S.C. 300gg,
(b) Part 148 of this subchapter implements sections 2741 through 2763 of the PHS Act. Its purpose is to improve access to individual health insurance coverage for certain individuals who previously had group coverage, guarantee the renewability of all health insurance coverage in the individual market, and provide certain protections for mothers and newborns with respect to coverage for hospital stays in connection with childbirth, and to provide certain protections for patients who elect breast reconstruction in connection with a mastectomy.
(c) Part 150 of this subchapter implements the enforcement provisions of sections 2722 and 2761 of the PHS Act with respect to the following:
(1) States that fail to substantially enforce one or more provisions of part 146 concerning group health insurance or the requirements of part 148 of this subchapter concerning individual health insurance.
(2) Insurance issuers in States described in paragraph (c)(1) of this section.
(3) Group health plans that are non-Federal governmental plans.
(d) Sections 2791 and 2792 of the PHS Act define terms used in the regulations in this subchapter and provide the basis for issuing these regulations.
(a) For purposes of 45 CFR parts 144 through 148, all health insurance coverage is generally divided into two markets—the group market (set forth in 45 CFR part 146) and the individual market (set forth in 45 CFR part 148). 45 CFR part 146 limits the group market to insurance sold to employment-related group health plans and further divides the group market into the large group market and the small group market. Federal law further defines the small group market as insurance sold to employer plans with 2 to 50 employees. State law, however, may expand the definition of the small group market to include certain coverage that would otherwise, under the Federal law, be considered coverage in the large group market or the individual market.
(b) The protections afforded under 45 CFR parts 144 through 148 to individuals and employers (and other sponsors of health insurance offered in connection with a group health plan) are determined by whether the coverage involved is obtained in the small group market, the large group market, or the
(c) Coverage that is provided to associations, but is not related to employment, is not considered group coverage under 45 CFR parts 144 through 148. The coverage is considered coverage in the individual market, regardless of whether it is considered group coverage under State law.
(d) Provisions relating to CMS enforcement of one or more provisions of part 146 or the requirements of part 148, or both, are contained in part 150 of this subchapter.
For purposes of parts 146 (group market), 148 (individual market), and 150 (enforcement) of this subchapter, the following definitions apply unless otherwise provided:
(1) Has been actively in existence for at least 5 years.
(2) Has been formed and maintained in good faith for purposes other than obtaining insurance.
(3) Does not condition membership in the association on any health status-related factor relating to an individual (including an employee of an employer or a dependent of any employee).
(4) Makes health insurance coverage offered through the association available to all members regardless of any health status-related factor relating to the members (or individuals eligible for coverage through a member).
(5) Does not make health insurance coverage offered through the association available other than in connection with a member of the association.
(6) Meets any additional requirements that may be imposed under State law.
(1)
(2)
(3)
(4)
(5)
(i) Due to the failure of the employer or other responsible entity to remit premiums on a timely basis; or
(ii) When the individual no longer resides, lives, or works in a service area of an HMO or similar program (whether or not within the choice of the individual) and there is no other COBRA continuation coverage available to the individual.
(6)
(i) Coverage ceases due to the failure of the employer or other responsible entity to remit premiums on a timely basis; or
(ii) When the individual no longer resides, lives, or works in a service area of an HMO or similar program (whether or not within the choice of the individual) and there is no other continuation coverage available to the individual.
(1) The group market provisions in 45 CFR part 146, subpart E, the term is defined in 45 CFR 146.150(b); and
(2) The individual market provisions in 45 CFR part 148, the term is defined in 45 CFR 148.103.
(1) Group market provisions in 45 CFR part 146 subpart D, the term is defined in 45 CFR 146.145(b); and
(2) Individual market provisions in 45 CFR part 148, the term is defined in 45 CFR 148.220.
(1) A Federally qualified health maintenance organization (as defined in section 1301(a) of the PHS Act);
(2) An organization recognized under State law as a health maintenance organization; or
(3) A similar organization regulated under State law for solvency in the same manner and to the same extent as such a health maintenance organization.
(1) The diagnosis, cure, mitigation, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body.
(2) Transportation primarily for and essential to medical care referred to in paragraph (1) of this definition.
(3) Insurance covering medical care referred to in paragraphs (1) and (2) of this definition.
(1) The deductible/limit year used under the plan.
(2) If the plan does not impose deductibles or limits on a yearly basis, the plan year is the policy year.
(3) If the plan does not impose deductibles or limits on a yearly basis, and either the plan is not insured or the insurance policy is not renewed on an annual basis, the plan year is the employer's taxable year.
(4) In any other case, the plan year is the calendar year.
Secs. 2701 through 2723, 2791 and 2792 of the PHS Act (42 U.S.C. 300gg through 300gg-23, 300gg-91, and 300gg-92.
(a)
(b)
(1)
(i) Limitations on a preexisting condition exclusion period.
(ii) Certificates and disclosure of previous coverage.
(iii) Methods of counting creditable coverage.
(iv) Special enrollment periods.
(v) Use of an affiliation period by an HMO as an alternative to a preexisting condition exclusion.
(2)
(3)
(4)
(5)
(a)
(1)(i)
(A) For purposes of this paragraph (a)(1)(i), medical advice, diagnosis, care, or treatment is taken into account only if it is recommended by, or received from, an individual licensed or similarly authorized to provide such services under State law and operating within the scope of practice authorized by State law.
(B) For purposes of this paragraph (a)(1)(i), the 6-month period ending on the enrollment date begins on the 6-month anniversary date preceding the enrollment date. For example, for an enrollment date of August 1, 1998, the 6-month period preceding the enrollment date is the period commencing on February 1, 1998 and continuing through July 31, 1998. As another example, for an enrollment date of August 30, 1998, the 6-month period preceding
(C) The following examples illustrate the requirements of this paragraph (a)(1)(i):
(i) Individual
(ii) In this
(i) Same facts as
(ii) In this
(i) Individual
(ii) In this
(i) Individual
(ii) In this
(ii)
(iii)
(iv)
(2)
(ii) (A)
(B)
(i) Employer
(ii) In this
(iii)
(iv)
(A) The earliest date on which coverage can become effective under the terms of the plan; or
(B) A special enrollment date for the individual. If an individual ceases to be eligible for coverage under the plan by terminating employment, and subsequently becomes eligible for coverage under the plan by resuming employment, only eligibility during the individual's most recent period of employment is taken into account in determining whether the individual is a late enrollee under the plan with respect to the most recent period of coverage. Similar rules apply if an individual again becomes eligible for coverage following a suspension of coverage that applied generally under the plan.
(v)
(i) Employee
(ii) In this
(i) Same as
(ii) In this
(b)
(ii)
(i) Seven months after enrollment in Employer
(ii) In this
(2)
(3)
(4)
(5)
(c)
(a)
(i) A group health plan as defined in § 144.103.
(ii) Health insurance coverage as defined in § 144.103 (whether or not the entity offering the coverage is subject to the requirements of this part and 45 CFR part 148, and without regard to whether the coverage is offered in the group market, the individual market, or otherwise).
(iii) Part A or part B of title XVIII of the Social Security Act (Medicare).
(iv) Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under section 1928 of the Social Security Act (the program for distribution of pediatric vaccines).
(v) Title 10 U.S.C. Chapter 55 (medical and dental care for members and certain former members of the uniformed services, and for their dependents; for purposes of title 10 U.S.C. chapter 55,
(vi) A medical care program of the Indian Health Service or of a tribal organization.
(vii) A State health benefits risk pool. For purposes of this section, a State health benefits risk pool means—
(A) An organization qualifying under section 501(c)(26) of the Code;
(B) A qualified high risk pool described in section 2744(c)(2) of the PHS Act; or
(C) Any other arrangement sponsored by a State, the membership composition of which is specified by the State
(
(
(viii) A health plan offered under title 5 U.S.C. chapter 89 (the Federal Employees Health Benefits Program).
(ix) A public health plan. For purposes of this section, a public health plan means any plan established or maintained by a State, county, or other political subdivision of a State that provides health insurance coverage to individuals who are enrolled in the plan.
(x) A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)).
(2)
(3)
(b)
(2)
(ii)
(iii)
(iv)
(i) Individual
(ii) In this
(i) Same facts as
(ii) In this
(i) Same facts as
(ii) In this
(i) Same facts as
(ii) In this
(i) Individual
(ii) In this
(i) Individual
(ii) In this
(i) Individual
(ii) In this
(i) Same facts as
(ii) In this
(v)
(B)
(i) Individual F has coverage under Group Health Plan
(ii) In this
(c)
(2)
(3)
(i) Mental health.
(ii) Substance abuse treatment.
(iii) Prescription drugs.
(iv) Dental care.
(v) Vision care.
(4)
(i) State prominently that the plan is using the alternative method of counting creditable coverage in disclosure statements concerning the plan, and state this to each enrollee at the time of enrollment under the plan; and
(ii) Include in these statements a description of the effect of using the alternative method, including an identification of the categories used.
(5)
(6)
(7)
(ii)
(iii)
(i) Individual
(ii) In this
(a)
(ii)
(iii)
(iv)
(2)
(i) A plan offers coverage with an HMO option from one issuer and an indemnity option from a different issuer. The HMO has not entered into an agreement with the plan to provide certificates as permitted under paragraph (a)(1)(iii) of this section.
(ii) In this
(B)
(
(i) A group health plan provides coverage under an HMO option and an indemnity option with a different issuer, and only allows employees to switch on each January 1. Neither the HMO nor the indemnity issuer has entered into an agreement with the plan to provide certificates as permitted under paragraph (a)(1)(iii) of this section.
(ii) In this
(2)
(ii)
(A)
(B)
(C)
(iii)
(iv)
(i) Individual
(ii) In this
(i) Same facts as
(ii) In this
(i) Employer
(ii) In this
(i) Individual
(ii) In this
(i) Individual
(ii) In this
(3)
(B)
(
(
(
(
(ii)
(A) The date the certificate is issued.
(B) The name of the group health plan that provided the coverage described in the certificate.
(C) The name of the participant or dependent with respect to whom the certificate applies, and any other information necessary for the plan providing the coverage specified in the certificate to identify the individual, such as the individual's identification number under the plan and the name of the participant if the certificate is for (or includes) a dependent.
(D) The name, address, and telephone number of the plan administrator or issuer required to provide the certificate.
(E) The telephone number to call for further information regarding the certificate (if different from paragraph (a)(3)(ii)(D)).
(F) Either—
(
(
(G) The date creditable coverage ended, unless the certificate indicates that creditable coverage is continuing as of the date of the certificate.
(iii)
(iv)
(v)
(vi)
(4)
(ii)
(iii)
(5)
(B)
(i) A group health plan covers employees and their dependents. The plan annually requests all employees to provide updated information regarding dependents, including the specific date on which an employee has a new dependent or on which a person ceases to be a dependent of the employee.
(ii) In this
(ii)
(iii)
(B)
(C)
(D)
(6)
(A) Creditable coverage described in sections 2701 (c)(1)(G) through (c)(1)(J) of the PHS Act (coverage under a State health benefits risk pool, the Federal Employees Health Benefits Program, a public health plan, and a health benefit plan under section 5(e) of the Peace Corps Act).
(B) Coverage subject to section 2721(b)(1)(B) of the PHS Act (requiring certificates by issuers offering health
(C) Coverage subject to section 2743 of the PHS Act applicable to health insurance issuers in the individual market. (However, this section does not require a certificate to be provided with respect to short-term, limited duration insurance, which is excluded from the definition of “individual health insurance coverage” in 45 CFR 144.103 that is not provided in connection with a group health plan, as described in paragraph (a)(6)(i)(B) of this section.)
(ii)
(b)
(2)
(3)
(c)
(i) An entity has failed to provide a certificate within the required time period;
(ii) The individual has creditable coverage but an entity may not be required to provide a certificate of the coverage under paragraph (a) of this section;
(iii) The coverage is for a period before July 1, 1996;
(iv) The individual has an urgent medical condition that necessitates a
(v) The individual lost a certificate that the individual had previously received and is unable to obtain another certificate.
(2)
(ii)
(iii)
(iv)
(i) Individual
(ii) In this
(3)
(4)
(d)
(2)
(i) A notice of the reconsideration is provided to the individual; and
(ii) Until the final determination is made, the plan or issuer, for purposes of approving access to medical services (such as a pre-surgery authorization), acts in a manner consistent with the initial determination.
(3)
(i) Individual
(ii) In this
(i) Same facts as in
(ii) In this
(i) Individual
(ii) In this
(a)
(2)
(3)
(4)
(5)
(i) When the employee declined enrollment for the employee or the dependent, the employee stated in writing that coverage under another group health plan or other health insurance coverage was the reason for declining enrollment. This paragraph (a)(5)(i) applies only if—
(A) The plan required such a statement when the employee declined enrollment; and
(B) The employee is provided with notice of the requirement to provide the statement in paragraph (a)(5)(i) (and the consequences of the employee's failure to provide the statement) at the time the employee declined enrollment.
(ii)(A) When the employee declined enrollment for the employee or dependent under the plan, the employee or dependent had COBRA continuation coverage under another plan and COBRA continuation coverage under that other plan has since been exhausted; or
(B) If the other coverage that applied to the employee or dependent when enrollment was declined was not under a COBRA continuation provision, either the other coverage has been terminated as a result of loss of eligibility for the coverage or employer contributions towards the other coverage have been terminated. For this purpose, loss of eligibility for coverage includes a loss of coverage as a result of legal separation, divorce, death, termination of employment, reduction in the number of hours of employment, and any loss of eligibility after a period that is measured by reference to any of the foregoing. Thus, for example, if an employee's coverage ceases following a termination of employment and the employee is eligible for but fails to elect COBRA continuation coverage, this is treated as a loss of eligibility under this paragraph (a)(5)(ii)(B). However, loss of eligibility does not include a loss due to failure of the individual or the participant to pay premiums on a timely basis or termination of coverage for cause (such as making a fraudulent claim or an intentional misrepresentation of a material fact in connection with the plan). In addition, for purposes of this paragraph (a)(5)(ii)(B), employer contributions include contributions by any current or
(6)
(7)
(b)
(2)
(3)
(i) The individual becomes the spouse of a participant; or
(ii) The individual is a spouse of the participant and a child becomes a dependent of the participant through birth, adoption, or placement for adoption.
(4)
(i) The employee and the individual become married; or
(ii) The employee and individual are married and a child becomes a dependent of the employee through birth, adoption or placement for adoption.
(5)
(6)
(7)
(8)
(i) In the case of marriage, not later than the first day of the first calendar month beginning after the date the completed request for enrollment is received by the plan;
(ii) In the case of a dependent's birth, the date of such birth; and
(iii) In the case of a dependent's adoption or placement for adoption, the date of such adoption or placement for adoption.
(9)
(i) Employee
(ii) In this
(c)
If you are declining enrollment for yourself or your dependents (including your spouse) because of other health insurance coverage, you may in the future be able to enroll yourself or your dependents in this plan, provided that you request enrollment within 30 days after your other coverage ends. In addition, if you have a new dependent as a result of marriage, birth, adoption or placement for adoption, you may be able to enroll yourself and your dependents, provided that you request enrollment within 30 days after the marriage, birth, adoption, or placement for adoption.
(d)
(2)
(i) Employer
(ii) In this
(i) Same facts as
(ii) In this
(a)
(b)
(2) No premium is charged to a participant or beneficiary for the affiliation period.
(3) The affiliation period for the HMO coverage is applied uniformly without regard to any health status-related factors.
(4) The affiliation period does not exceed 2 months (or 3 months in the case of a late enrollee).
(5) The affiliation period begins on the enrollment date.
(6) The affiliation period for enrollment in the HMO under a plan runs concurrently with any waiting period.
(c)
(a)
(i) Health status;
(ii) Medical condition (including both physical and mental illnesses), as defined in § 144.103;
(iii) Claims experience;
(iv) Receipt of health care;
(v) Medical history;
(vi) Genetic information, as defined in 45 CFR 144.103;
(vii) Evidence of insurability; or
(viii) Disability.
(2) Evidence of insurability includes—
(i) Conditions arising out of acts of domestic violence; and
(ii) Participation in activities such as motorcycling, snowmobiling, all-terrain vehicle riding, horseback riding, skiing, and other similar activities.
(3) The decision whether health coverage is elected for an individual (including the time chosen to enroll, such as under special enrollment or late enrollment) is not, itself, within the scope of any health factor. (However, under § 146.117, a plan or issuer must treat special enrollees the same as similarly situated individuals who are enrolled when first eligible.)
(b)
(ii) For purposes of this section, rules for eligibility include, but are not limited to, rules relating to—
(A) Enrollment;
(B) The effective date of coverage;
(C) Waiting (or affiliation) periods;
(D) Late and special enrollment;
(E) Eligibility for benefit packages (including rules for individuals to change their selection among benefit packages);
(F) Benefits (including rules relating to covered benefits, benefit restrictions, and cost-sharing mechanisms such as coinsurance, copayments, and deductibles), as described in paragraphs (b) (2) and (3) of this section;
(G) Continued eligibility; and
(H) Terminating coverage (including disenrollment) of any individual under the plan.
(iii) The rules of this paragraph (b)(1) are illustrated by the following examples:
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(2)
(B) However, benefits provided under a plan or through group health insurance coverage must be uniformly available to all similarly situated individuals (as described in paragraph (d) of this section). Likewise, any restriction on a benefit or benefits must apply uniformly to all similarly situated individuals and must not be directed at individual participants or beneficiaries based on any health factor of the participants or beneficiaries (determined based on all the relevant facts and circumstances). Thus, for example, a plan or issuer may limit or exclude benefits
(C) For purposes of this paragraph (b)(2)(i), a plan amendment applicable to all individuals in one or more groups of similarly situated individuals under the plan and made effective no earlier than the first day of the first plan year after the amendment is adopted is not considered to be directed at any individual participants or beneficiaries.
(D) The rules of this paragraph (b)(2)(i) are illustrated by the following examples:
(i)
(ii)
(i)
(ii)
(i) A group health plan applies for a group health policy offered by an issuer. Individual
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(ii)
(iii)
(B) The rules of this paragraph (b)(2)(iii) are illustrated by the following examples:
(i)
(ii)
(i)
(ii)
(3)
(A) Complies with § 146.111;
(B) Applies uniformly to all similarly situated individuals (as described in paragraph (d) of this section); and
(C) Is not directed at individual participants or beneficiaries based on any health factor of the participants or beneficiaries. For purposes of this paragraph (b)(3)(i)(C), a plan amendment relating to a preexisting condition exclusion applicable to all individuals in one or more groups of similarly situated individuals under the plan and made effective no earlier than the first day of the first plan year after the amendment is adopted is not considered to be directed at any individual participants or beneficiaries.
(ii) The rules of this paragraph (b)(3) are illustrated by the following examples:
(i)
(ii)
(i)
(ii)
(c)
(ii) Discounts, rebates, payments in kind, and any other premium differential mechanisms are taken into account in determining an individual's premium or contribution rate. (For rules relating to cost-sharing mechanisms, see paragraph (b)(2) of this section (addressing benefits).)
(2)
(ii)
(iii)
(i)
(ii)
(i)
(ii)
(3)
(d)
(1)
(2)
(A) A bona fide employment-based classification of the participant through whom the beneficiary is receiving coverage;
(B) Relationship to the participant (e.g., as a spouse or as a dependent child);
(C) Marital status;
(D) With respect to children of a participant, age or student status; or
(E) Any other factor if the factor is not a health factor.
(ii) Paragraph (d)(2)(i) of this section does not prevent more favorable treatment of individuals with adverse health factors in accordance with paragraph (g) of this section.
(3)
(4)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(e)
(ii)
(i)
(ii)
(i)
(ii)
(2)
(B) The rules of this paragraph (e)(2)(i) are illustrated by the following examples:
(i)
(ii)
(i)
(ii)
(ii)
(B) The rules of this paragraph (e)(2)(ii) are illustrated by the following examples:
(i)
(ii)
(i)
(ii)
(3)
(ii) The rules of this paragraph (e)(3) are illustrated by the following examples:
(i)
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
(f)
(g)
(ii) The rules of this paragraph (g)(1) are illustrated by the following examples:
(i)
(ii)
(i)
(ii)
(i)
(ii)
(2)
(ii) The rules of this paragraph (g)(2) are illustrated by the following example:
(i)
(ii)
(h)
(i)
(2)
(3)
(i)
(A) Failed to apply for coverage because it was reasonable to believe that an application for coverage would have been futile due to a plan provision that discriminated based on a health factor; or
(B) Was not offered an opportunity to enroll in the plan and the failure to give such an opportunity violates this section.
(ii)
(
(
(
(
(B)
(C)
(i)
(ii)
(i)
(ii)
(iii)
(B)
(C)
(i)
(ii)
(4)
(A) Must notify the individual that the plan will be coming into compliance with the requirements of this section, specify the effective date of compliance, and inform the individual regarding any enrollment restrictions that may apply under the terms of the plan once the plan is in compliance with this section (as a matter of administrative convenience, the notice may be disseminated to all employees);
(B) Must give the individual an opportunity to enroll that continues for at least 30 days;
(C) Must permit coverage to be effective as of the first day of plan coverage for which an exemption election under § 146.180 (with regard to this section) is no longer in effect (or July 1, 2001, if later, and the plan was acting in accordance with a good faith interpretation of section 2702 of the PHS Act and guidance published by CMS); and
(D) May not treat the individual as a late enrollee or a special enrollee.
(ii) For purposes of this paragraph (i)(4), an individual is considered to have been denied coverage if the individual failed to apply for coverage because, given an exemption election under § 146.180, it was reasonable to believe that an application for coverage would have been denied based on a health factor.
(iii) The rules of this paragraph (i)(4) are illustrated by the following examples:
(i)
(ii)
(i)
(ii)
(a)
(2)
(3)
(ii)
(i) Individual
(ii) In this
(i) Same facts as in
(ii) In this
(b)
(2)
(3)
(c)
(d)
(e)
(2)
(3)
(ii)
(iii)
(iv)
(v)
(a)
(i) 48 hours following a vaginal delivery; or
(ii) 96 hours following a delivery by cesarean section.
(2)
(ii)
(3)
(ii) In this
(ii) In this
(ii) In this
(4)
(ii)
(i) In the case of a delivery by cesarean section, a group health plan subject to the requirements of this section automatically provides benefits for any hospital length of stay of up to 72 hours. For any longer stay, the plan requires an attending provider to complete a certificate of medical necessity. The plan then makes a determination, based on the certificate of medical necessity, whether a longer stay is medically necessary.
(ii) In this
(5)
(ii)
(iii)
(iv)
(i) A pregnant woman covered under a group health plan subject to the requirements of this section goes into labor and is admitted to a hospital. She gives birth by cesarean section. On the third day after the delivery, the attending provider for the mother consults with the mother, and the attending provider for the newborn consults with the mother regarding the newborn. The attending providers authorize the early discharge of both the mother and the newborn. Both are discharged approximately 72 hours after the delivery. The plan pays for the 72-hour hospital stays.
(ii) In this
(b)
(A) Deny a mother or her newborn child eligibility or continued eligibility to enroll or renew coverage under the terms of the plan solely to avoid the requirements of this section; or
(B) Provide payments (including payments-in-kind) or rebates to a mother to encourage her to accept less than the minimum protections available under this section.
(ii)
(ii) In this
(ii) In this
(2)
(ii)
(i) A group health plan subject to the requirements of this section provides benefits for hospital lengths of stay in connection with childbirth. In the case of a delivery by cesarean section, the plan automatically pays for the first 48 hours. With respect to each succeeding 24-hour period, the participant or beneficiary must call the
(ii) In this
(3)
(i) Penalize (for example, take disciplinary action against or retaliate against), or otherwise reduce or limit the compensation of, an attending provider because the provider furnished care to a participant or beneficiary in accordance with this section; or
(ii) Provide monetary or other incentives to an attending provider to induce the provider to furnish care to a participant or beneficiary in a manner inconsistent with this section, including providing any incentive that could induce an attending provider to discharge a mother or newborn earlier than 48 hours (or 96 hours) after delivery.
(c)
(1)
(i) Give birth in a hospital; or
(ii) Stay in the hospital for a fixed period of time following the birth of her child.
(2)
(3)
(ii)
(ii) In this
(ii) In this
(4)
(d)
(1)
(2)
Under federal law, group health plans and health insurance issuers offering group health insurance coverage generally may not restrict benefits for any hospital length of stay in connection with childbirth for the mother or newborn child to less than 48 hours following a vaginal delivery, or less than 96 hours following a delivery by cesarean section. However, the plan or issuer may pay for a shorter stay if the attending provider (e.g., your physician, nurse midwife, or physician assistant), after consultation with the mother, discharges the mother or newborn earlier.
Also, under federal law, plans and issuers may not set the level of benefits or out-of-pocket costs so that any later portion of the 48-hour (or 96-hour) stay is treated in a manner less favorable to the mother or newborn than any earlier portion of the stay.
In addition, a plan or issuer may not, under federal law, require that a physician or other health care provider obtain authorization for prescribing a length of stay of up to 48 hours (or 96 hours). However, to use certain providers or facilities, or to reduce your out-of-pocket costs, you may be required to obtain precertification. For information on precertification, contact your plan administrator.
(3)
(4)
(i)
(ii)
(e)
(i) The State law requires the coverage to provide for at least a 48-hour hospital length of stay following a vaginal delivery and at least a 96-hour hospital length of stay following a delivery by cesarean section.
(ii) The State law requires the coverage to provide for maternity and pediatric care in accordance with guidelines established by the American College of Obstetricians and Gynecologists, the American Academy of Pediatrics, or any other established professional medical association.
(iii) The State law requires, in connection with the coverage for maternity care, that the hospital length of stay for such care is left to the decision of (or is required to be made by) the attending provider in consultation with the mother. State laws that require the decision to be made by the attending provider with the consent of the mother satisfy the criterion of this paragraph (e)(1)(iii).
(2)
(ii)
(iii)
(3)
(4)
(ii) In this
(ii) In this
(f)
(a)
(b)
(ii)
(2)
(3)
(i) Apply the aggregate lifetime or annual limit both to the medical/surgical benefits to which the limit would otherwise apply and to mental health benefits in a manner that does not distinguish between the medical/surgical and mental health benefits; or
(ii) Not include an aggregate lifetime or annual limit on mental health benefits that is less than the aggregate lifetime or annual limit, respectively, on the medical/surgical benefits.
(4)
(i) Prior to the effective date of the mental health parity provisions, a group health plan had no annual limit on medical/surgical benefits and had a $10,000 annual limit on mental health benefits. To comply with the parity requirements of this paragraph (b), the plan sponsor is considering each of the following options:
(A) Eliminating the plan's annual limit on mental health benefits;
(B) Replacing the plan's previous annual limit on mental health benefits with a $500,000 annual limit on all benefits (including medical/surgical and mental health benefits); and
(C) Replacing the plan's previous annual limit on mental health benefits with a $250,000 annual limit on medical/surgical benefits and a $250,000 annual limit on mental health benefits.
(ii) In this
(i) Prior to the effective date of the mental health parity provisions, a group health plan had a $100,000 annual limit on medical/surgical inpatient benefits, a $50,000 annual limit on medical/surgical outpatient benefits, and a $100,000 annual limit on all mental health benefits. To comply with the parity requirements of this paragraph (b), the plan sponsor is considering each of the following options:
(A) Replacing the plan's previous annual limit on mental health benefits with a $150,000 annual limit on mental health benefits; and
(B) Replacing the plan's previous annual limit on mental health benefits with a $100,000 annual limit on mental health inpatient benefits and a $50,000 annual limit on mental health outpatient benefits.
(ii) In this
(i) A group health plan that is subject to the requirements of this section has no aggregate lifetime or annual limit for either medical/surgical benefits or mental health benefits. While the plan provides medical/surgical benefits with respect to both network and out-of-network providers, it does not provide mental health benefits with respect to out-of-network providers.
(ii) In this
(i) Prior to the effective date of the mental health parity provisions, a group health plan had an annual limit on medical/surgical benefits and a separate but identical annual limit on mental health benefits. The plan included benefits for treatment of substance abuse and chemical dependency in its definition of mental health benefits. Accordingly, claims paid for treatment of substance abuse and chemical dependency were counted in applying the annual limit on mental health benefits. To comply with the parity requirements of this paragraph (b), the plan sponsor is considering each of the following options:
(A) Making no change in the plan so that claims paid for treatment of substance abuse and chemical dependency continue to count in applying the annual limit on mental health benefits;
(B) Amending the plan to count claims paid for treatment of substance abuse and chemical dependency in applying the annual limit on medical/surgical benefits (rather than counting those claims in applying the annual limit on mental health benefits);
(C) Amending the plan to provide a new category of benefits for treatment of chemical dependency and substance abuse that is subject to a separate, lower limit and under which claims paid for treatment of substance abuse and chemical dependency are counted only in applying the annual limit on this separate category; and
(D) Amending the plan to eliminate distinctions between medical/surgical benefits and mental health benefits and establishing an overall limit on benefits offered under the plan under which claims paid for treatment of substance abuse and chemical dependency are counted with medical/surgical benefits and mental health benefits in applying the overall limit.
(ii) In this
(5)
(6)
(A) No aggregate lifetime or annual limit, as appropriate, on mental health benefits; or
(B) An aggregate lifetime or annual limit on mental health benefits that is no less than an average limit for medical/surgical benefits calculated in the following manner. The average limit is calculated by taking into account the weighted average of the aggregate lifetime or annual limits, as appropriate, that are applicable to the categories of medical/surgical benefits. Limits based on delivery systems, such as inpatient/outpatient treatment, or normal treatment of common, low-cost conditions (such as treatment of normal births), do not constitute categories for purposes of this paragraph (b)(6)(i)(B). In addition, for purposes of determining weighted averages, any benefits that are not within a category that is subject to a separately-designated limit under the plan are taken into account as a single separate category by using an estimate of the upper limit on the dollar amount that a plan may reasonably be expected to incur with respect to such benefits, taking into account any other applicable restrictions under the plan.
(ii)
(iii)
(i) A group health plan that is subject to the requirements of this section includes a $100,000 annual limit on medical/surgical benefits related to cardio-pulmonary diseases. The plan does not include an annual limit on any other category of medical/surgical benefits. The plan determines that 40% of the dollar amount of plan payments for medical/surgical benefits are related to cardio-pulmonary diseases. The plan determines that $1,000,000 is a reasonable estimate of the upper limit on the dollar amount that the plan may incur with respect to the other 60% of payments for medical/surgical benefits.
(ii) In this
(c)
(d)
(2)
(3)
(i) Require a group health plan (or health insurance issuer offering coverage in connection with a group health plan) to provide any mental health benefits; or
(ii) Affect the terms and conditions (including cost sharing, limits on the number of visits or days of coverage, requirements relating to medical necessity, requiring prior authorization for treatment, or requiring primary care physicians’ referrals for treatment) relating to the amount, duration, or scope of the mental health benefits under the plan (or coverage) except as specifically provided in paragraph (b) of this section.
(e)
(2)
(i) All persons treated as a single employer under subsections (b), (c), (m), and (o) of section 414 of the Internal Revenue Code of 1986 (26 U.S.C. 414) are treated as one employer;
(ii) If an employer was not in existence throughout the preceding calendar year, whether it is a small employer is determined based on the average number of employees the employer reasonably expects to employ on business days during the current calendar year; and
(iii) Any reference to an employer for purposes of the small employer exemption includes a reference to a predecessor of the employer.
(f)
(2)
(A) The incurred expenditures during the base period, divided by,
(B) The incurred expenditures during the base period, reduced by—
(
(
(ii)
(A)
(B)
(C)
(iii)
(iv)
(v)
(vi)
(i) A group health plan has a plan year that is the calendar year. The plan satisfies the requirements of paragraph (b)(1)(i) of this section as of January 1, 1998. On September 15, 1998, the plan determines that $1,000,000 in claims have been incurred during the period between January 1, 1998 and June 30, 1998 and reported by August 30, 1998. The plan also determines that $100,000 in administrative costs have been incurred for all benefits under the group health plan, including mental health benefits. Thus, the plan determines that its incurred expenditures for the base period are $1,100,000. The plan also determines that the claims incurred during the base period that would have been denied under the terms of the plan absent plan amendments required to comply with this section are $40,000 and that administrative expenses attributable to complying with the requirements of this section are $10,000. Thus, the total amount of expenditures for the base period had the plan not been amended to comply with the requirements of paragraph (b)(1)(i) of this section are $1,050,000 ($1,100,000—($40,000 + $10,000) = $1,050,000).
(ii) In this
(i) A health insurance issuer sells a group health insurance policy that is rated on a pooled-basis and is sold to 30 group health plans. One of the group health plans inquires whether it qualifies for the one percent increased cost exemption. The issuer performs the calculation for the pool as a whole and determines that the application of this section results in an increased cost of 0.500 percent (for a ratio under this paragraph (f)(2) of 1.00500) for the pool. The issuer informs the requesting plan and the other plans in the pool of the calculation.
(ii) In this
(i) A partially-insured plan is collecting the information to determine whether it qualifies for the exemption. The plan administrator determines the incurred expenses for the base period for the self-funded portion of the plan to be $2,000,000 and the administrative expenses for the base period for the self-funded portion to be $200,000. For the insured portion of the plan, the plan administrator requests data from the insurer. For the insured portion of the plan, the plan's own incurred expenses for the base period are $1,000,000 and the administrative expenses for the base period are $100,000. The plan administrator determines that under the self-funded portion of the plan, the claims incurred for the base period that would have been denied under the terms of the plan absent the amendment are $0 because the self-funded portion does not cover mental health benefits and the plan's administrative costs attributable to complying with the requirements of this section are $1,000. The issuer determines that under the insured portion of the plan, the claims incurred for the base period that would have been denied under the terms of the plan absent the amendment are $25,000 and the administrative costs attributable to complying with the requirements of this section are $1,000. Thus, the total incurred expenditures for the plan for the base period are $3,300,000 ($2,000,000 + $200,000 + $1,000,000 + $100,000 = $3,300,000) and the total amount of expenditures for the base period had the plan not been amended to comply with the requirements of paragraph (b)(1)(i) of this section are $3,273,000 ($3,300,000 − ($0 + $1,000 + $25,000 + $1,000) = $3,273,000).
(ii) In this
(3)
(
(
(
(
(
(
(
(
(B)
(C)
(D)
(i) A group health plan has a plan year that is the calendar year and has an open enrollment period every November 1 through November 30. The plan determines on September 15 that it satisfies the requirements of paragraph (f)(2) of this section. As part of its open enrollment materials, the plan mails, on October 15, to all participants and beneficiaries a notice satisfying the requirements of this paragraph (f)(3)(i).
(ii) In this
(ii)
(B)
(C)
(4)
(g)
(2)
(h)
(2)
(A) The first day of the first plan year beginning on or after April 1, 1998; or
(B) January 1, 1999.
(ii) Compliance with the requirements of this section is deemed to be good faith compliance with the requirements of section 2705 of the PHS Act.
(iii) The rules of this paragraph (h)(2) are illustrated by the following examples:
(i) A group health plan has a plan year that is the calendar year. The plan complies with section 2705 of the PHS Act in good faith using assumptions inconsistent with paragraph (b)(6) of this section relating to weighted averages for categories of benefits.
(ii) In this
(i) A group health plan has a plan year that is the calendar year. For the entire 1998 plan year, the plan applies a $1,000,000 annual limit on medical/surgical benefits and a $100,000 annual limit on mental health benefits.
(ii) In this
(3)
(ii)
(
(
(
(
(
(B) The notice must be provided at no charge to participants or their representative within 15 days after receipt of a written or oral request for such notification, but in no event before the notice has been sent to the applicable federal agency.
(i)
(a)
(b)
(c)
(2)
(i) Shortens the period of time from the “6-month period” described in section 2701(a)(1) of the PHS Act and § 146.111(a)(1)(i) (for purposes of identifying a preexisting condition);
(ii) Shortens the period of time from the “12 months” and “18 months” described in section 2701(a)(2) of the PHS Act and § 146.111(a)(1)(ii) (for purposes of applying a preexisting condition exclusion period);
(iii) Provides for a greater number of days than the “63-day period” described in sections 2701 (c)(2)(A) and (d)(4)(A) of the PHS Act and §§ 146.111(a)(1)(iii) and 146.113 (for purposes of applying the break in coverage rules);
(iv) Provides for a greater number of days than the “30-day period” described in sections 2701 (b)(2) and (d)(1) of the PHS Act and § 146.111(b) (for purposes of the enrollment period and preexisting condition exclusion periods for certain newborns and children that are adopted or placed for adoption);
(v) Prohibits the imposition of any preexisting condition exclusion in cases not described in section 2701(d) of the PHS Act or expands the exceptions described in that section;
(vi) Requires special enrollment periods in addition to those required under section 2701(f) of the PHS Act; or
(vii) Reduces the maximum period permitted in an affiliation period under section 701(g)(1)(B).
(d)
(2)
(a)
(b)
(2)
(i) Coverage only for accident (including accidental death and dismemberment).
(ii) Disability income insurance.
(iii) Liability insurance, including general liability insurance and automobile liability insurance.
(iv) Coverage issued as a supplement to liability insurance.
(v) Workers’ compensation or similar insurance.
(vi) Automobile medical payment insurance.
(vii) Credit-only insurance (for example, mortgage insurance).
(viii) Coverage for on-site medical clinics.
(3)
(ii)
(iii)
(iv)
(A) Subject to State long-term care insurance laws;
(B) For qualified long-term care insurance services, as defined in section 7702B(c)(1) of the Internal Revenue Code, or provided under a qualified long-term care insurance contract, as defined in section 7702B(b) of the Internal Revenue Code; or
(C) based on cognitive impairment or a loss of functional capacity that is expected to be chronic.
(4)
(ii)
(A) The benefits are provided under a separate policy, certificate, or contract of insurance;
(B) There is no coordination between the provision of the benefits and an exclusion of benefits under any group health plan maintained by the same plan sponsor; and
(C) The benefits are paid with respect to an event without regard to whether benefits are provided with respect to the event under any group health plan maintained by the same plan sponsor.
(5)
(i) Medicare supplemental health insurance (as defined under section 1882(g)(1) of the Social Security Act; also known as Medigap or MedSupp insurance);
(ii) Coverage supplemental to the coverage provided under Chapter 55, Title 10 of the United States Code (also known as CHAMPUS supplemental programs); and
(iii) Similar supplemental coverage provided to coverage under a group health plan.
(a)
(1) Offer, to any small employer in the State, all products that are approved for sale in the small group market and that the issuer is actively marketing, and must accept any employer that applies for any of those products; and
(2) Accept for enrollment under the coverage every eligible individual (as defined in paragraph (b) of this section) who applies for enrollment during the period in which the individual first becomes eligible to enroll under the terms of the group health plan, or during a special enrollment period, and may not impose any restriction on an eligible individual's being a participant or beneficiary, which is inconsistent with the nondiscrimination provisions of § 146.121.
(b)
(1) To enroll in group health insurance coverage offered to a group health plan maintained by a small employer, in accordance with the terms of the group health plan;
(2) For coverage under the rules of the health insurance issuer which are uniformly applicable in the State to small employers in the small group market; and
(3) For coverage in accordance with all applicable State laws governing the issuer and the small group market.
(c)
(i) Limit the employers that may apply for the coverage to those with eligible individuals who live, work, or reside in the service area for the network plan; and
(ii) Within the service area of the plan, deny coverage to employers if the issuer has demonstrated to the applicable State authority (if required by the State authority) that—
(A) It will not have the capacity to deliver services adequately to enrollees of any additional groups because of its obligations to existing group contract holders and enrollees; and
(B) It is applying this paragraph (c)(1) uniformly to all employers without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to those employees and dependents.
(2) An issuer that denies health insurance coverage to an employer in any service area, in accordance with paragraph (c)(1)(ii) of this section, may not offer coverage in the small group market within the service area to any employer for a period of 180 days after the date the coverage is denied. This
(3) Coverage offered within a service area after the 180-day period specified in paragraph (c)(2) of this section is subject to the requirements of this section.
(d)
(i) Does not have the financial reserves necessary to underwrite additional coverage; and
(ii) Is applying this paragraph (d)(1) uniformly to all employers in the small group market in the State consistent with applicable State law and without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to those employees and dependents.
(2) An issuer that denies group health insurance coverage to any small employer in a State under paragraph (d)(1) of this section may not offer coverage in connection with group health plans in the small group market in the State before the later of the following dates:
(i) The 181st day after the date the issuer denies coverage.
(ii) The date the issuer demonstrates to the applicable State authority, if required under applicable State law, that the issuer has sufficient financial reserves to underwrite additional coverage.
(3) Paragraph (d)(2) of this section does not limit the issuer's ability to renew coverage already in force or relieve the issuer of the responsibility to renew that coverage.
(4) Coverage offered after the 180-day period specified in paragraph (d)(2) of this section is subject to the requirements of this section.
(5) An applicable State authority may provide for the application of this paragraph (d) on a service-area-specific basis.
(e)
(1) Paragraph (a) of this section does not preclude a health insurance issuer from establishing employer contribution rules or group participation rules for the offering of health insurance coverage in connection with a group health plan in the small group market, as allowed under applicable State law.
(2) For purposes of paragraph (e)(1) of this section—
(i) The term “employer contribution rule” means a requirement relating to the minimum level or amount of employer contribution toward the premium for enrollment of participants and beneficiaries; and
(ii) The term “group participation rule” means a requirement relating to the minimum number of participants or beneficiaries that must be enrolled in relation to a specified percentage or number of eligible individuals or employees of an employer.
(f)
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(c)
(1) The issuer provides notice in writing to each plan sponsor provided that particular product in that market (and to all participants and beneficiaries covered under such coverage) of the discontinuation at least 90 days before the date the coverage will be discontinued;
(2) The issuer offers to each plan sponsor provided that particular product the option, on a guaranteed issue basis, to purchase all (or, in the case of the large group market, any) other health insurance coverage currently being offered by the issuer to a group health plan in that market; and
(3) In exercising the option to discontinue that product and in offering the option of coverage under paragraph (c)(2) of this section, the issuer acts uniformly without regard to the claims experience of those sponsors or any health status-related factor relating to any participants or beneficiaries covered or new participants or beneficiaries who may become eligible for such coverage.
(d)
(1) The issuer provides notice in writing to the applicable State authority and to each plan sponsor (and all participants and beneficiaries covered under the coverage) of the discontinuation at least 180 days prior to the date the coverage will be discontinued; and
(2) All health insurance policies issued or delivered for issuance in the State in the market (or markets) are discontinued and not renewed.
(e)
(f)
(1) Large group market; and
(2) Small group market if, for coverage available in this market (other than only through one or more bona fide associations), the modification is consistent with State law and is effective uniformly among group health plans with that product.
(g)
(a)
(1) Make a reasonable disclosure to the employer, as part of its solicitation and sales materials, of the availability of information described in paragraph (b) of this section; and
(2) Upon request of the employer, provide that information to the employer.
(b)
(1) Provisions of coverage relating to the following:
(i) The issuer's right to change premium rates and the factors that may affect changes in premium rates.
(ii) Renewability of coverage.
(iii) Any preexisting condition exclusion, including use of the alternative method of counting creditable coverage.
(iv) Any affiliation periods applied by HMOs.
(v) The geographic areas served by HMOs.
(2) The benefits and premiums available under all health insurance coverage for which the employer is qualified, under applicable State law. See § 146.150(b) through (f) for allowable limitations on product availability.
(c)
(1) An outline of coverage. For purposes of this section, outline of coverage means a description of benefits in summary form.
(2) The rate or rating schedule that applies to the product (with and without the preexisting condition exclusion or affiliation period).
(3) The minimum employer contribution and group participation rules that apply to any particular type of coverage.
(4) In the case of a network plan, a map or listing of counties served.
(5) Any other information required by the State.
(d)
(a)
(i) Limitations on preexisting condition exclusion periods described in § 146.111.
(ii) Special enrollment periods for individuals and dependents described in § 146.117.
(iii) Prohibitions against discriminating against individual participants and beneficiaries based on health status described in § 146.121.
(iv) Standards relating to benefits for mothers and newborns described in § 146.130.
(v) Parity in the application of certain limits to mental health benefits described in § 146.136.
(vi) Required coverage for reconstructive surgery and certain other services following a mastectomy under section 2706 of the PHS Act.
(2)
(B)
(ii) If a group health plan is co-sponsored by two or more employers, then only plan enrollees of the non-Federal governmental employer(s) with a valid election under this section are affected by the election.
(3)
(ii) Regardless of whether coverage offered by an issuer is designated as “stop-loss” coverage or “excess risk” coverage, if it is regulated as group health insurance under an applicable State law, then for purposes of this section, a non-Federal governmental plan that purchases the coverage is considered to be fully insured. In that event, a plan may not be exempted under this section from the requirements of this part.
(4)
(b)
(i) Be made in writing.
(ii) Be made in conformance with all of the plan sponsor's rules, including any public hearing requirements.
(iii) Specify the beginning and ending dates of the period to which the election is to apply. This period can be either of the following periods:
(A) A single specified plan year, as defined in § 144.103 of this subchapter.
(B) The “term of the agreement,” as specified in paragraph (b)(2) of this section, in the case of a plan governed by collective bargaining.
(iv) Specify the name of the plan and the name and address of the plan administrator, and include the name and telephone number of a person CMS may contact regarding the election.
(v) State that the plan does not include health insurance coverage, or identify which portion of the plan is not funded through health insurance coverage.
(vi) Specify each requirement described in paragraph (a) of this section from which the plan sponsor elects to exempt the plan.
(vii) Certify that the person signing the election document, including (if applicable) a third party plan administrator, is legally authorized to do so by the plan sponsor.
(viii) Include, as an attachment, a copy of the notice described in paragraph (f) of this section.
(2)
(i) In the case of a group health plan for which the last plan year governed by a prior collective bargaining agreement expires during the bargaining process for a new agreement, the term of the prior agreement includes all plan years governed by the agreement plus the period of time that precedes the latest of the following dates, as applicable, with respect to the new agreement:
(A) The date of an agreement between the governmental employer and union officials.
(B) The date of ratification of an agreement between the governmental employer and the union.
(C) The date impasse resolution, arbitration or other closure of the collective bargaining process is finalized when agreement is not reached.
(ii) In the case of a group health plan governed by a collective bargaining agreement for which closure is not reached before the last plan year under the immediately preceding agreement expires, the term of the new agreement includes all plan years governed by the agreement excluding the period that precedes the latest applicable date specified in paragraph (b)(2)(i) of this section.
(3)
(ii)
(c)
(d)
(2)
(3)
(4)
(5)
(e)
(i) The last day of the plan year.
(ii) The 45th day after the date of CMS's written notification requesting additional information.
(2)
(3)
(f)
(ii) The notice must be in writing and, except as provided in paragraph (f)(2) of this section with regard to initial notices, must be provided to each enrollee at the time of enrollment under the plan, and on an annual basis no later than the last day of each plan year (as defined in § 144.103 of this subchapter) for which there is an election.
(iii) A plan may meet the notification requirements of this paragraph (f) by prominently printing the notice in a summary plan description, or equivalent description, that it provides to each enrollee at the time of enrollment, and annually. Also, when a plan provides a notice to an enrollee at the time of enrollment, that notice may serve as the initial annual notice for that enrollee.
(2)
(ii) In the case of a collectively bargained plan (including a self-funded non-Federal governmental plan that has been exempted from requirements of this part under § 146.125(a)(2)), with regard to the initial plan year to which an election under this section applies, the plan must provide the initial annual notice of the election to all enrollees before the first day of the plan year, or within 30 days after the latest applicable date specified in paragraph (b)(2)(i) of this section if the 30th day falls on or after the first day of the plan year. Also, the plan must provide a notice at the time of enrollment to individuals who—
(A) Enroll on or after the first day of the plan year, when closure of the collective bargaining process is reached before the plan year begins; or
(B) Enroll on or after the latest applicable date specified in paragraph (b)(2)(i) of this section if that date falls on or after the first day of the plan year.
(3)
(i) The specific requirements described in paragraph (a)(1) of this section from which the plan sponsor is electing to exempt the plan, and a statement that, in general, Federal law imposes these requirements upon group health plans.
(ii) A statement that Federal law gives the plan sponsor of a self-funded non-Federal governmental plan the right to exempt the plan in whole, or in part, from the listed requirements, and that the plan sponsor has elected to do so.
(iii) A statement identifying which parts of the plan are subject to the election.
(iv) A statement identifying which of the listed requirements, if any, apply
(v) A statement informing plan enrollees that the plan provides for certification and disclosure of creditable coverage for covered employees and their dependents who lose coverage under the plan.
(g)
(2)
(3)
(4)
(ii) If a single plan applies to more than one bargaining unit, and the plan is governed by collective bargaining agreements of varying lengths, paragraph (d)(2) of this section, with respect to an election renewal, applies to the plan as governed by the agreement that results in the earliest filing date.
(h)
(i)
(ii)
(iii)
(B)
The school district learned of the oversight six weeks into the school year, and promptly (within 30 days of learning of the oversight) provided notice to the three teachers regarding the plan's exemption under this section and that the exemption does not apply to them, or their dependents, during the plan year of their enrollment because of the plan's failure to timely notify them of its exemption. The plan complies with the requirements of this part for these individuals for the plan year of their enrollment. CMS would not require the plan to come into compliance with the requirements of this part for other enrollees.
(ii)
(iii)
(iv)
(v)
(j)
(1) CMS notifies the plan sponsor (and the plan administrator if other
(2) CMS's notice informs the plan sponsor that it has 45 days after the date of CMS's notice to explain in writing why it believes its election is valid. The plan sponsor should provide applicable statutory and regulatory citations to support its position.
(3) CMS verifies that the plan sponsor's response is timely filed as provided under paragraph (d)(3) of this section. CMS will not consider a response that is not timely filed.
(4) If CMS's preliminary determination that an election is invalid remains unchanged after CMS considers the plan sponsor's timely response (or in the event that the plan sponsor fails to respond timely), CMS provides written notice to the plan sponsor (and the plan administrator if other than the plan sponsor and the administrator's address is known to CMS) of CMS's final determination that the election is invalid. Also, CMS informs the plan sponsor that, within 45 days of the date of the notice of final determination, the plan, subject to paragraph (i)(1)(iii) of this section, must comply with all requirements of this part for the specified period for which CMS has determined the election to be invalid.
(k)
(l)
(1) Establishing, and enforcing compliance with, the requirements of State law (as defined in § 146.143(d)(1)), including requirements that parallel provisions of title XXVII of the PHS Act, that apply to non-Federal governmental plans or sponsors.
(2) Prohibiting a sponsor of a non-Federal governmental plan within the State from making an election under this section.
Secs. 2741 through 2763, 2791, and 2792 of the Public Health Service Act (42 U.S.C. 300gg-41 through 300gg-63, 300gg-91, and 300gg-92).
This part implements sections 2741 through 2763 and 2791 and 2792 of the PHS Act. Its purpose is to improve access to individual health insurance coverage for certain eligible individuals
(a)
(2) The requirements of this part that pertain to guaranteed availability of individual health insurance coverage for certain eligible individuals apply to all issuers of individual health insurance coverage in a State, unless the State implements an acceptable alternative mechanism as described in § 148.128. The requirements that pertain to guaranteed renewability for all individuals, and to protections for mothers and newborns with respect to hospital stays in connection with childbirth, apply to all issuers of individual health insurance coverage in the State, regardless of whether a State implements an alternative mechanism.
(b)
Unless otherwise provided, the following definition applies:
(1) The individual has at least 18 months of creditable coverage (as determined under § 146.113 of this subchapter) as of the date on which the individual seeks coverage under this part.
(2) The individual's most recent prior creditable coverage was under a group health plan, governmental plan, or church plan (or health insurance coverage offered in connection with any of these plans).
(3) The individual is not eligible for coverage under any of the following:
(i) A group health plan.
(ii) Part A or Part B of Title XVIII (Medicare) of the Social Security Act.
(iii) A State plan under Title XIX (Medicaid) of the Social Security Act (or any successor program).
(4) The individual does not have other health insurance coverage.
(5) The individual's most recent coverage was not terminated because of nonpayment of premiums or fraud. (For more information about nonpayment of premiums or fraud, see § 146.152(b)(1) and (b)(2) of this subchapter.)
(6) If the individual has been offered the option of continuing coverage under a COBRA continuation provision or a similar State program, the individual has both elected and exhausted the continuation coverage.
(a)
(1) May not decline to offer coverage or deny enrollment under any policy
(i) Provide information about all available coverage options.
(ii) Enroll the individual in any coverage option the individual selects.
(2) May not impose any preexisting condition exclusion on the individual.
(b)
(c)
(i) Each policy form must be designed for, made generally available to, and actively marketed to, and enroll, both eligible and other individuals.
(ii) The policy forms must be either the issuer's two most popular policy forms (as described in paragraph (c)(2) of this section) or representative samples of individual health insurance offered by the issuer in the State (as described in paragraph (c)(3) of this section).
(2)
(3)
(A) An issuer in the individual market in a State during the previous calendar year, weighted by enrollment for each policy form, but not including coverage issued to eligible individuals.
(B) All issuers in the individual market in a State if the data are available for the previous calendar year, weighted by enrollment for each policy form.
(ii)
(A) Include a lower-level coverage policy form under which the actuarial value of benefits under the coverage is at least 85 percent but not greater than 100 percent of the weighted average.
(B) Include a higher-level coverage policy form under which the actuarial value of the benefits under the coverage is at least 15 percent greater than the actuarial value of the lower-level coverage policy form offered by an issuer in that State and at least 100 percent, but not greater than 120 percent, of the weighted average.
(C) Include benefits substantially similar to other individual health insurance coverage offered by the issuer in the State.
(D) Provide for risk adjustment, risk spreading, or a risk spreading mechanism, or otherwise provide some financial subsidization for eligible individuals.
(E) Meet all applicable State requirements.
(iii)
(4)
(5)
(i)
(ii)
(A) For policy forms already being marketed as of July 1, 1997—no later than September 1, 1997.
(B) For other policy forms—90 days before the beginning of the calendar year in which the issuer wants to market the policy form.
(d)
(i) Specify that an eligible individual may only enroll if he or she lives, resides, or works within the service area for the network plan.
(ii) Deny coverage to an eligible individual if the issuer has demonstrated the following to the applicable State authority (if required by the State):
(A) It does not have the capacity to deliver services adequately to additional individual enrollees because of its obligations to provide services to current group contract holders and enrollees, and to current individual enrollees.
(B) It uniformly denies coverage to individuals without regard to any health status-related factor, and without regard to whether the individuals are eligible individuals.
(iii) Not offer any coverage in the individual market, within the service area identified for purposes of paragraph (d)(1)(ii) of this section, for a period of 180 days after the coverage is denied.
(2) In those States in which CMS is enforcing the individual market provisions of this part in accordance with § 148.200, the issuer must make the demonstration described in paragraph (d)(1)(ii) of this section to CMS rather than to the State, and the issuer may not deny coverage to any eligible individual until 30 days after CMS receives and approves the information.
(e)
(i) It does not have the financial reserves necessary to underwrite additional coverage.
(ii) It uniformly denies coverage to all individuals in the individual market, consistent with applicable State law, without regard to any health status-related factor of the individuals, and without regard to whether the individuals are eligible individuals.
(2) In those States in which CMS is enforcing the individual market provisions of this part in accordance with § 148.200, the issuer must make the demonstration described in paragraph (e)(1) of this section to CMS rather than to the State, and the issuer may not deny coverage to any eligible individual until 30 days after CMS receives and approves the information.
(3) An issuer that denies coverage in any service area according to paragraph (e)(1) of this section is prohibited from offering that coverage in the individual market for a period of 180 days after the later of the date—
(i) The coverage is denied; or
(ii) The issuer demonstrates to the applicable State authority (if required under applicable State law) that the issuer has sufficient financial reserves to underwrite additional coverage.
(4) A State may apply the 180-day suspension described in paragraph (e)(3) of this section on a service-area-specific basis.
(f)
(2)
(i) The child was covered under any creditable coverage within 30 days of
(ii) The child has not had a significant break in coverage.
(3)
Individual
Individual
(g)
(2) An issuer offering health insurance coverage only in connection with group health plans, or only through one or more bona fide associations, or both, is not required to offer that type of coverage in the individual market.
(3) An issuer offering health insurance coverage in connection with a group health plan is not deemed to be a health insurance issuer offering individual health insurance coverage solely because the issuer offers a conversion policy.
(4) This section does not restrict the amount of the premium rates that an issuer may charge an individual under State law for health insurance coverage provided in the individual market.
(5) This section does not prevent an issuer offering health insurance coverage in the individual market from establishing premium discounts or rebates, or modifying otherwise applicable copayments or deductibles, in return for adherence to programs of health promotion and disease prevention.
(6) This section does not require issuers to reopen blocks of business closed under applicable State law.
(a)
(b)
(2) Medicare eligibility or entitlement is not a basis for nonrenewal or termination of an individual's health insurance coverage in the individual market.
(c)
(1)
(2)
(3)
(4)
(5)
(d)
(1) Provides notice in writing to each individual provided coverage of that type of health insurance at least 90 days before the date the coverage will be discontinued.
(2) Offers to each covered individual, on a guaranteed issue basis, the option to purchase any other individual health insurance coverage currently being offered by the issuer for individuals in that market.
(3) Acts uniformly without regard to any health status-related factor of covered individuals or dependents of covered individuals who may become eligible for coverage.
(e)
(1) Provides notice in writing to the applicable State authority and to each individual of the discontinuation at least 180 days before the date the coverage will expire.
(2) Discontinues and does not renew all health insurance policies it issues or delivers for issuance in the State in the individual market.
(3) Acts uniformly without regard to any health status-related factor of covered individuals or dependents of covered individuals who may become eligible for coverage.
(f)
(g)
(h)
(a)
(2)
(i) Health insurance coverage furnished in connection with a group health plan defined in § 144.103 of this subchapter. (These issuers are required under § 146.115 of this subchapter to provide a certificate of coverage.)
(ii) Excepted benefits described in § 148.220.
(iii) Short-term, limited duration coverage defined in § 144.103 of this subchapter.
(b)
(i)
(ii)
(2)
(B)
(
(
(
(
(ii)
(A) The date the certificate is issued.
(B) The name of the individual or dependent for whom the certificate applies, and any other information necessary for the issuer providing the coverage specified in the certificate to identify the individual, such as the individual's identification number under the policy and the name of the policyholder if the certificate is for (or includes) a dependent.
(C) The name, address, and telephone number of the issuer required to provide the certificate.
(D) The telephone number to call for further information regarding the certificate (if different from paragraph (b)(2)(ii)(C) of this section).
(E) Either one of the following:
(
(
(F) The date creditable coverage ended, unless the certificate indicates that creditable coverage is continuing as of the date of the certificate.
(iii)
(iv)
(v)
(vi)
(3)
(ii)
(iii)
(4)
(ii)
(iii)
(B)
(C)
(D)
(5)
(c)
(2)
(3)
(d)
(i) An entity has failed to provide a certificate within the required time period.
(ii) The individual has creditable coverage but an entity may not be required to provide a certificate of the coverage.
(iii) The coverage is for a period before July 1, 1996.
(iv) The individual has an urgent medical condition that necessitates a determination before the individual can deliver a certificate to the plan.
(v) The individual lost a certificate that the individual had previously received and is unable to obtain another certificate.
(2)
(ii)
(iii)
(3)
(a)
(b)
(2) The issuer must promptly determine whether an applicant is an eligible individual.
(3) If an issuer determines that an individual is an eligible individual, the issuer must promptly issue a policy to that individual.
(c)
(2)
At 62 FR 17000, Apr. 8, 1997, § 148.126 was added. This section contains information collection and recordkeeping requirements and will not become effective until approval has been given by the Office of Management and Budget.
(a)
(1) The alternative mechanism meets the following conditions:
(i) Offers health insurance coverage to all eligible individuals.
(ii) Prohibits imposing preexisting condition exclusions and affiliation periods for coverage of an eligible individual.
(iii) Offers an eligible individual a choice of coverage that includes at least one policy form of coverage that is comparable to either one of the following:
(A) Comprehensive coverage offered in the individual market in the State.
(B) A standard option of coverage available under the group or individual health insurance laws of the State.
(2) The State is implementing one of the following provisions relating to risk:
(i) One of the following model acts, as adopted by the NAIC on June 3, 1996, but only if the model has been revised in State regulations to meet all of the requirements of this part and title 27 of the PHS Act.
(A) The Small Employer and Individual Health Insurance Availability Model Act to the extent it applies to individual health insurance coverage.
(B) The Individual Health Insurance Portability Model Act.
(ii) A qualified high risk pool, which, for purposes of this section, is a high risk pool that meets the following conditions:
(A) Provides to all eligible individuals health insurance coverage (or comparable coverage) that does not impose any preexisting condition exclusion or affiliation periods for coverage of an eligible individual.
(B) Provides for premium rates and covered benefits for the coverage consistent with standards included in the NAIC Model Health Plan for Uninsurable Individuals Act (as in effect as of August 21, 1996), but only if the model has been revised in State regulations to meet all of the requirements of this part and title 27 of the PHS Act.
(iii) One of the following mechanisms:
(A) Any other mechanism that provides for risk adjustment, risk spreading, or a risk-spreading mechanism (among issuers or policies of an issuer) or otherwise provides for some financial subsidization for eligible individuals, including through assistance to participating issuers.
(B) A mechanism that provides a choice for each eligible individual of all individual health insurance coverage otherwise available.
(b)
(c)
(1) By not later than April 1, 1997, as evidenced by a postmark date, or other such date, the chief executive officer of the State takes the following actions:
(i) Notifies CMS that the State has enacted or intends to enact by not later than January 1, 1998 (unless it is a State described in paragraph (d) of this section), any legislation necessary to provide for the implementation of a mechanism reasonably designed to be an acceptable alternative mechanism as of January 1, 1998.
(ii) Provides CMS with the information necessary to review the mechanism and its implementation (or proposed implementation).
(2) CMS has not made a determination, in accordance with the procedure in paragraph (e)(4) of this section, that the State will not be implementing a mechanism reasonably designed to be an acceptable alternative mechanism as of January 1, 1998.
(d)
(1) Notifies CMS by April 1, 1997, that the State intends to submit an alternative mechanism and intends to enact any necessary legislation to provide for
(2) Notifies CMS by April 1, 1998, that the State has enacted any necessary legislation to provide for the implementation of an acceptable alternative mechanism as of July 1, 1998.
(3) Provides CMS with the information necessary to review the mechanism and its implementation (or proposed implementation).
(e)
(i) Notify CMS that it has enacted legislation necessary to provide for the implementation of a mechanism reasonably designed to be an acceptable alternative mechanism, and
(ii) Provide CMS with the information necessary for CMS to review the mechanism and its implementation (or proposed implementation).
(2)
(3)
(ii)
(4)
(A) Notifies the State, in writing, of the preliminary determination.
(B) Informs the State that if it fails to implement an acceptable alternative mechanism, the Federal guaranteed availability provisions of § 148.120 will take effect.
(C) Permits the State a reasonable opportunity to modify the mechanism (or to adopt another mechanism).
(ii)
(A) CMS's final determination.
(B) That the requirements of § 148.120 concerning guaranteed availability apply to health insurance coverage offered in the individual market in the State as of a date specified in the notice from CMS.
(iii)
(5)
(f)
(1) If the State makes a significant change to its alternative mechanism, it provides the information before making a change.
(2) Every 3 years from the later of implementing the alternative mechanism or implementing a significant change, it provides CMS with information.
(g)
(1) Is the mechanism reasonably designed to provide all eligible individuals with a choice of health insurance coverage?
(2) Does the choice offered to eligible individuals include at least one policy form that meets one of the following requirements?
(i) Is the policy form comparable to comprehensive health insurance coverage offered in the individual market in the State?
(ii) Is the policy form comparable to a standard option of coverage available under the group or individual health insurance laws of the State?
(3) Does the mechanism prohibit preexisting condition exclusions for all eligible individuals?
(4) Is the State implementing one of the following:
(i) The NAIC Small Employer and Individual Health Insurance Availability Model Act (Availability Model), adopted on June 3, 1996, revised to reflect HIPAA requirements.
(ii) The Individual Health Insurance Portability Model Act (Portability Model), adopted on June 3, 1996, revised to reflect HIPAA requirements.
(iii) A qualified high-risk pool that provides eligible individuals health insurance or comparable coverage without a preexisting condition exclusion, and with premiums and benefits consistent with the NAIC Model Health Plan for Uninsurable Individuals Act (as in effect August 21, 1996), revised to reflect HIPAA requirements.
(iv) A mechanism that provides for risk spreading or provides eligible individuals with a choice of all available individual health insurance coverage.
(5) Has the State enacted all legislation necessary for implementing the alternative mechanism?
(6) If the State has not enacted all legislation necessary for implementing the alternative mechanism, will the necessary legislation be enacted by January 1, 1998?
(h)
(a)
(i) 48 hours following a vaginal delivery; or
(ii) 96 hours following a delivery by cesarean section.
(2)
(ii)
(3)
(ii) In this
(ii) In this
(ii) In this
(4)
(ii)
(i) In the case of a delivery by cesarean section, an issuer subject to the requirements of this section automatically provides benefits for any hospital length of stay of up to 72 hours. For any longer stay, the issuer requires an attending provider to complete a certificate of medical necessity. The issuer then makes a determination, based on the certificate of medical necessity, whether a longer stay is medically necessary.
(ii) In this
(5)
(ii)
(iii)
(iv)
(i) A pregnant woman covered under a policy offered by an issuer subject to the requirements of this section goes into labor and is admitted to a hospital. She gives birth by cesarean section. On the third day after the delivery, the attending provider for the mother consults with the mother, and the attending provider for the newborn consults with the mother regarding the newborn. The attending providers authorize the early discharge of both the mother and the newborn. Both are discharged approximately 72 hours after the delivery. The issuer pays for the 72-hour hospital stays.
(ii) In this
(b)
(A) Deny a mother or her newborn child eligibility or continued eligibility to enroll in or renew coverage solely to avoid the requirements of this section; or
(B) Provide payments (including payments-in-kind) or rebates to a mother to encourage her to accept less than the minimum protections available under this section.
(ii)
(ii) In this
(ii) In this
(2)
(ii)
(i) An issuer subject to the requirements of this section provides benefits for hospital lengths of stay in connection with childbirth. In the case of a delivery by cesarean section, the issuer automatically pays for the first 48 hours. With respect to each succeeding 24-hour period, the covered individual must call the issuer to obtain precertification from a utilization reviewer, who determines if an additional 24-hour period is medically necessary. If this approval is not obtained, the issuer will not provide benefits for any succeeding 24-hour period.
(ii) In this
(3)
(i) Penalize (for example, take disciplinary action against or retaliate against), or otherwise reduce or limit the compensation of, an attending provider because the provider furnished care to a covered individual in accordance with this section; or
(ii) Provide monetary or other incentives to an attending provider to induce the provider to furnish care to a covered individual in a manner inconsistent with this section, including providing any incentive that could induce an attending provider to discharge a mother or newborn earlier than 48 hours (or 96 hours) after delivery.
(c)
(1)
(i) Give birth in a hospital; or
(ii) Stay in the hospital for a fixed period of time following the birth of her child.
(2)
(3)
(ii)
(ii) In this
(ii) In this
(4)
(5)
(d)
(1)
(2)
Under federal law, health insurance issuers generally may not restrict benefits for any hospital length of stay in connection with childbirth for the mother or newborn child to less than 48 hours following a vaginal delivery, or less than 96 hours following a delivery by cesarean section. However, the issuer may pay for a shorter stay if the attending provider (e.g., your physician, nurse midwife, or physician assistant), after consultation with the mother, discharges the mother or newborn earlier.
Also, under federal law, issuers may not set the level of benefits or out-of-pocket costs so that any later portion of the 48-hour (or 96-hour) stay is treated in a manner less favorable to the mother or newborn than any earlier portion of the stay.
In addition, an issuer may not, under federal law, require that a physician or other health care provider obtain authorization for prescribing a length of stay of up to 48 hours (or 96 hours). However, to use certain providers or facilities, or to reduce your out-of-pocket costs, you may be required to obtain precertification. For information on precertification, contact your issuer.
(3)
(4)
(e)
(i) The State law requires the coverage to provide for at least a 48-hour hospital length of stay following a vaginal delivery and at least a 96-hour hospital length of stay following a delivery by cesarean section.
(ii) The State law requires the coverage to provide for maternity and pediatric care in accordance with guidelines established by the American College of Obstetricians and Gynecologists, the American Academy of Pediatrics, or any other established professional medical association.
(iii) The State law requires, in connection with the coverage for maternity care, that the hospital length of stay for such care is left to the decision of (or is required to be made by) the attending provider in consultation with the mother. State laws that require the decision to be made by the attending provider with the consent of the mother satisfy the criterion of this paragraph (e)(1)(iii).
(2)
(f)
(a)
(2) Sections 2741 through 2763 and 2791 of the PHS Act cannot be construed to affect or modify the provisions of section 514 of ERISA.
(b)
The requirements of this part do not apply to individual health insurance coverage in relation to its provision of the benefits described in paragraphs (a) and (b) of this section (or any combination of the benefits).
(a)
(1) Coverage only for accident (including accidental death and dismemberment).
(2) Disability income insurance.
(3) Liability insurance, including general liability insurance and automobile liability insurance.
(4) Coverage issued as a supplement to liability insurance.
(5) Workers’ compensation or similar insurance.
(6) Automobile medical payment insurance.
(7) Credit-only insurance (for example, mortgage insurance).
(8) Coverage for on-site medical clinics.
(b)
(1) Limited scope dental or vision benefits. These benefits are dental or vision benefits that are limited in scope to a narrow range or type of benefits that are generally excluded from benefit packages that combine hospital, medical, and surgical benefits.
(2) Long-term care benefits. These benefits are benefits that are either—
(i) Subject to State long-term care insurance laws;
(ii) For qualified long-term care insurance services, as defined in section 7702B(c)(1) of the Code, or provided under a qualified long-term care insurance contract, as defined in section 7702B(b) of the Code; or
(iii) Based on cognitive impairment or a loss of functional capacity that is expected to be chronic.
(3) Coverage only for a specified disease or illness (for example, cancer policies), or hospital indemnity or other fixed indemnity insurance (for example, $100/day) if the policies meet the requirements of § 146.145(b)(4)(ii)(B) and (b)(4)(ii)(C) of this subchapter regarding noncoordination of benefits.
(4) Medicare supplemental health insurance (as defined under section 1882(g)(1) of the Social Security Act. 42 U.S.C. 1395ss, also known as Medigap or MedSupp insurance).
(5) Coverage supplemental to the coverage provided under Chapter 55, Title 10 of the United States Code (also known as CHAMPUS supplemental programs).
(6) Similar supplemental coverage provided to coverage under a group health plan.
Secs. 2701 through 2763, 2791, and 2792 of the PHS Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and 300gg-92).
(a)
(b)
(2)
The definitions that appear in part 144 of this subchapter apply to this part 150, unless stated otherwise. As used in this part:
(1) Issued to an association that makes coverage available to individuals other than in connection with one or more group health plans; or
(2) Administered, or placed in a trust, and is not sold in connection with a group health plan subject to the provisions of part 146 of this subchapter.
Except as provided in subpart C of this part, each State enforces HIPAA requirements with respect to health insurance issuers that issue, sell, renew, or offer health insurance coverage in the State.
CMS enforces HIPAA requirements to the extent warranted (as determined by CMS) in any of the following circumstances:
(a)
(b)
(c)
(1) Whether the State's mechanism meets the requirements for an acceptable alternative mechanism.
(2) Whether the State is implementing the acceptable alternative mechanism.
(d)
Information that may trigger an investigation of State enforcement includes, but is not limited to, any of the following:
(a) A complaint received by CMS.
(b) Information learned during informal contact between CMS and State officials.
(c) A report in the news media.
(d) Information from the governors and commissioners of insurance of the various States regarding the status of their enforcement of HIPAA requirements.
(e) Information obtained during periodic review of State health care legislation. CMS may review State health care and insurance legislation and regulations to determine whether they are:
(1) Consistent with HIPAA requirements.
(2) Not pre-empted as provided in § 146.143 (relating to group market provisions) and § 148.120 (relating to individual market requirements) on the basis that they prevent the application of a HIPAA requirement.
(f) Any other information that indicates a possible failure to substantially enforce.
Sections 150.209 through 150.219 describe the procedures CMS follows to determine whether a State is substantially enforcing HIPAA requirements.
If CMS receives a complaint or other information indicating that a State is
If CMS is satisfied that there is a reasonable question whether there has been a failure to substantially enforce HIPAA requirements, CMS sends, in writing, the notice described in § 150.213 of this part, to the following State officials:
(a) The governor or chief executive officer of the State.
(b) The insurance commissioner or chief insurance regulatory official.
(c) If the alleged failure involves HMOs, the official responsible for regulating HMOs if different from the official listed in paragraph (b) of this section.
The notice provided to the State is in writing and does the following:
(a) Identifies the HIPAA requirement or requirements that have allegedly not been substantially enforced.
(b) Describes the factual basis for the allegation of a failure or failures to enforce HIPAA requirements.
(c) Explains that the consequence of a State's failure to substantially enforce HIPAA requirements is that CMS enforces them.
(d) Advises the State that it has 30 days from the date of the notice to respond, unless the time for response is extended as described in § 150.215 of this subpart. The State's response should include any information that the State wishes CMS to consider in making the preliminary determination described in § 150.217.
CMS may extend, for good cause, the time the State has for responding to the notice described in § 150.213 of this subpart. Examples of good cause include an agreement between CMS and the State that there should be a public hearing on the State's enforcement, or evidence that the State is undertaking expedited enforcement activities.
If, at the end of the 30-day period (and any extension), the State has not established to CMS's satisfaction that it is substantially enforcing the HIPAA requirements described in the notice, CMS takes the following actions:
(a) Consults with the appropriate State officials identified in § 150.211 (or their designees).
(b) Notifies the State of CMS's preliminary determination that the State has failed to substantially enforce the requirements and that the failure is continuing.
(c) Permits the State a reasonable opportunity to show evidence of substantial enforcement.
If, after providing notice and a reasonable opportunity for the State to show that it has corrected any failure to substantially enforce, CMS finds that the failure to substantially enforce has not been corrected, it will send the State a written notice of its final determination. The notice includes the following:
(a) Identification of the HIPAA requirements that CMS is enforcing.
(b) The effective date of CMS's enforcement.
(a) If CMS determines that a State for which it has assumed enforcement authority has enacted and implemented legislation to enforce HIPAA requirements and also determines that it is appropriate to return enforcement authority to the State, CMS will enter into discussions with State officials to ensure that a transition is effected with respect to the following:
(1) Consumer complaints and inquiries.
(2) Instructions to issuers.
(3) Any other pertinent aspect of operations.
(b) CMS may also negotiate a process to ensure that, to the extent practicable, and as permitted by law, its records documenting issuer compliance and other relevant areas of CMS's enforcement operations are made available for incorporation into the records of the State regulatory authority that
If any health insurance issuer that is subject to CMS's enforcement authority under § 150.101(b)(2), or any non-Federal governmental plan (or employer that sponsors a non-Federal governmental plan) that is subject to CMS's enforcement authority under § 150.101(b)(1), fails to comply with HIPAA requirements, it may be subject to a civil money penalty as described in this subpart.
(a)
(1) Complaints.
(2) Reports from State insurance departments, the National Association of Insurance Commissioners, and other Federal and State agencies.
(3) Any other information that indicates potential noncompliance with HIPAA requirements.
(b)
(c)
If a failure to comply is established under this Part, the responsible entity, as determined under this section, is liable for any civil money penalty imposed.
(a)
(2)
(b)
(2)
(c)
(2)
(d)
If an investigation under § 150.303 indicates a potential violation, CMS provides written notice to the responsible entity or entities identified under § 150.305. The notice does the following:
(a) Describes the substance of any complaint or other information. (See Appendix A to this subpart for examples of violations.)
(b) Provides 30 days from the date of the notice for the responsible entity or entities to respond with additional information, including documentation of compliance as described in § 150.311.
(c) States that a civil money penalty may be assessed.
In circumstances in which an entity cannot prepare a response to CMS within the 30 days provided in the notice, the entity may make a written request for an extension from CMS detailing the reason for the extension request and showing good cause. If CMS grants the extension, the responsible entity must respond to the notice within the time frame specified in CMS's letter granting the extension of time. Failure to respond within 30 days, or within the extended time frame, may result in CMS's imposition of a civil money penalty based upon the complaint or other information alleging or indicating a violation of HIPAA requirements.
In determining whether to impose a civil money penalty, CMS reviews and considers documentation provided in any complaint or other information, as well as any additional information provided by the responsible entity to demonstrate that it has complied with HIPAA requirements. The following are examples of documentation that a potential responsible entity may submit for CMS's consideration in determining whether a civil money penalty should be assessed and the amount of any civil money penalty:
(a) Any individual policy, group policy, certificate of insurance, application, rider, amendment, endorsement, certificate of creditable coverage, advertising material, or any other documents if those documents form the basis of a complaint or allegation of noncompliance, or the basis for the responsible entity to refute the complaint or allegation.
(b) Any other evidence that refutes an alleged noncompliance.
(c) Evidence that the entity did not know, and exercising due diligence could not have known, of the violation.
(d) Documentation that the policies, certificates of insurance, or non-Federal governmental plan documents have been amended to comply with HIPAA requirements either by revision of the contracts or by the development of riders, amendments, or endorsements.
(e) Documentation of the entity's issuance of conforming policies, certificates of insurance, plan documents, or amendments to policyholders or certificate holders before the issuance of the notice of intent to assess a penalty described in § 150.307.
(f) Evidence documenting the development and implementation of internal policies and procedures by an issuer, or non-Federal governmental health plan or employer, to ensure compliance with HIPAA requirements. Those policies and procedures may include or consist of a voluntary compliance program. Any such program should do the following:
(1) Effectively articulate and demonstrate the fundamental mission of compliance and the issuer's, or non-
(2) Include the name of the individual in the organization responsible for compliance.
(3) Include an effective monitoring system to identify practices that do not comply with HIPAA requirements and to provide reasonable assurance that fraud, abuse, and systemic errors are detected in a timely manner.
(4) Address procedures to improve internal policies when noncompliant practices are identified.
(g) Evidence documenting the entity's record of previous compliance with HIPAA requirements.
(a)
(b)
(c)
(d)
(e)
(2)
(i) Concur with CMS's position(s) as outlined in the report, explaining the plan of correction to be implemented.
(ii) Dispute CMS's position(s), clearly outlining the basis for its dispute and submitting illustrative examples where appropriate.
(3)
(i) Concurrence with the issuer's or non-Federal governmental plan's position.
(ii) Approval of the issuer's or non-Federal governmental plan's proposed plan of correction.
(iii) Conditional approval of the issuer's or non-Federal governmental plan's proposed plan of correction, which will include any modifications CMS requires.
(iv) Notice to the issuer or non-Federal governmental plan that there exists a potential violation of HIPAA requirements.
A civil money penalty for each violation of 42 U.S.C. 300gg
In determining the amount of any penalty, CMS takes into account the following:
(a)
(1) Any history of prior violations by the responsible entity, including whether, at any time before determination of the current violation or violations, CMS or any State found the responsible entity liable for civil or administrative sanctions in connection with a violation of HIPAA requirements.
(2) Documentation that the responsible entity has submitted its policy forms to CMS for compliance review.
(3) Evidence that the responsible entity has never had a complaint for noncompliance with HIPAA requirements filed with a State or CMS.
(4) Such other factors as justice may require.
(b)
(1) The frequency of the violation, taking into consideration whether any violation is an isolated occurrence, represents a pattern, or is widespread.
(2) The level of financial and other impacts on affected individuals.
(3) Other factors as justice may require.
For every violation subject to a civil money penalty, if there are substantial or several mitigating circumstances, the aggregate amount of the penalty is set at an amount sufficiently below the maximum permitted by § 150.315 to reflect that fact. As guidelines for taking into account the factors listed in § 150.317, CMS considers the following:
(a)
(1) Before receipt of the notice issued under § 150.307, implemented and followed a compliance plan as described in § 150.311(f).
(2) Had no previous complaints against it for noncompliance.
(b)
(1) Made adjustments to its business practices to come into compliance with HIPAA requirements so that the following occur:
(i) All employers, employees, individuals and non-Federal governmental entities are identified that are or were issued any policy, certificate of insurance or plan document, or any form used in connection therewith that failed to comply.
(ii) All employers, employees, individuals, and non-Federal governmental plans are identified that were denied coverage or were denied a right provided under HIPAA requirements.
(iii) Each employer, employee, individual, or non-Federal governmental plan adversely affected by the violation has been, for example, offered coverage or provided a certificate of creditable coverage in a manner that complies with HIPAA requirements that were violated so that, to the extent practicable, that employer, employee, individual, or non-Federal governmental entity is in the same position that he, she, or it would have been in had the violation not occurred.
(iv) The adjustments are completed in a timely manner.
(2) Discovered areas of noncompliance without notice from CMS and voluntarily reported that noncompliance, provided that the responsible entity submits the following:
(i) Documentation verifying that the rights and protections of all individuals adversely affected by the noncompliance have been restored; and
(ii) A plan of correction to prevent future similar violations.
(3) Demonstrated that the violation is an isolated occurrence.
(4) Demonstrated that the financial and other impacts on affected individuals is negligible or nonexistent.
(5) Demonstrated that the noncompliance is correctable and that a high percentage of the violations were corrected.
For every violation subject to a civil money penalty, if there are substantial or several aggravating circumstances, CMS sets the aggregate amount of the
(a) The frequency of violation indicates a pattern of widespread occurrence.
(b) The violation(s) resulted in significant financial and other impacts on the average affected individual.
(c) The entity does not provide documentation showing that substantially all of the violations were corrected.
CMS may take into account other circumstances of an aggravating or mitigating nature if, in the interests of justice, they require either a reduction or an increase of the penalty in order to assure the achievement of the purposes of this part, and if those circumstances relate to the entity's previous record of compliance or the gravity of the violation.
Nothing in §§ 150.315 through 150.323 limits the authority of CMS to settle any issue or case described in the notice furnished in accordance with § 150.307 or to compromise on any penalty provided for in §§ 150.315 through 150.323.
(a)
(b)
If CMS proposes to assess a penalty in accordance with this part, it delivers to the responsible entity, or sends to that entity by certified mail, return receipt requested, written notice of its intent to assess a penalty. The notice includes the following:
(a) A description of the HIPAA requirements that CMS has determined that the responsible entity violated.
(b) A description of any complaint or other information upon which CMS based its determination, including the basis for determining the number of affected individuals and the number of days for which the violations occurred.
(c) The amount of the proposed penalty as of the date of the notice.
(d) Any circumstances described in §§ 150.317 through 150.323 that were considered when determining the amount of the proposed penalty.
(e) A specific statement of the responsible entity's right to a hearing.
(f) A statement that failure to request a hearing within 30 days permits the assessment of the proposed penalty without right of appeal in accordance with § 150.347.
Any entity against which CMS has assessed a penalty may appeal that penalty in accordance with § 150.401
If the responsible entity does not request a hearing within 30 days of the issuance of the notice described in § 150.343, CMS may assess the proposed civil money penalty, a less severe penalty, or a more severe penalty. CMS notifies the responsible entity in writing of any penalty that has been assessed and of the means by which the responsible entity may satisfy the judgment. The responsible entity has no right to appeal a penalty with respect to which it has not requested a
This appendix lists actions in the group and individual markets for which CMS may impose civil money penalties. This list is not all-inclusive.
All cross-references to sections of the Code of Federal Regulations are cross-references to sections in parts 144, 146, or 148 of this subchapter.
Except as otherwise expressly noted, all references to non-Federal governmental plans refer to non-Federal governmental plans that are
a. Failure to comply with the limitations on pre-existing condition exclusions (§ 146.111).
Violations of the limitations on preexisting condition exclusions, set forth in § 146.111, includes those circumstances in which a non-Federal governmental plan or health insurance issuer offering group health insurance coverage does the following:
(1) Imposes a preexisting condition exclusion period that exceeds 12 months or, in the case of a late enrollee, 18 months, from the enrollment date (the first day of coverage or the first day of the waiting period, if any).
(2) Fails to reduce a pre-existing condition exclusion period by creditable coverage as provided in §§ 146.111(a)(1)(iii) and 146.113.
(3) Imposes a pre-existing condition exclusion period without first giving the two written notices required in §§ 146.111(c) and 146.115(d). The first notice is a general notice to all plan participants of the existence and terms of any pre-existing condition exclusion under the plan, and the rights of individuals to demonstrate creditable coverage. The notice should explain the right of an individual to request a certificate from a previous plan or issuer, if necessary, and include a statement that the current plan or issuer will assist in obtaining a certificate from a previous plan or issuer, if necessary. The second notice is required to be sent to any individual who has presented evidence of creditable coverage, and to whom a pre-existing condition exclusion period will be applied. This second notice informs the individual of the plan's determination of any pre-existing condition exclusion period, the basis for such determination, a written explanation of any appeals procedures established by the plan or issuer, and a reasonable opportunity to submit additional evidence of creditable coverage.
(4) Treats pregnancy as a pre-existing condition, as prohibited by § 146.111(b)(4). For example, an issuer may not refuse to pay for prenatal care and delivery effective with the date maternity coverage began because the individual did not have maternity coverage at the time the pregnancy began.
(5) Imposes a pre-existing condition exclusion with regard to a child who enrolls in a group health plan within 30 days of birth, adoption, or placement for adoption.
(6) Imposes a pre-existing condition exclusion with regard to a child who was enrolled in another group health plan within 30 days of birth, adoption, or placement for adoption and who does not experience significant break in coverage.
(7) Uses a pre-existing condition look-back period that exceeds the six-month period ending on the enrollment date in violation of § 146.111(a)(1) of this chapter.
(8) Determines whether a pre-existing condition exclusion applies by using a standard other than whether medical advice, diagnosis, care, or treatment was actually recommended or received during the look-back period. A determination that a reasonably prudent person would or should have sought medical care for the condition is an unacceptable standard by which to determine whether a pre-existing condition exclusion applies.
(9) Uses genetic information as part of the definition of pre-existing condition in the absence of a diagnosis of the condition related to the genetic information.
(10) Otherwise fails to comply with § 146.111.
b. Failure to comply with the provisions relating to creditable coverage (§ 146.113).
Failure to comply with the § 146.113 rules relating to creditable coverage includes those circumstances in which a non-Federal governmental plan or issuer offering group health insurance coverage does the following:
(1) Fails to treat all forms of coverage listed in § 146.113(a) as creditable coverage.
(2) Counts creditable coverage in a manner inconsistent with the standard method described in § 146.113(b) or the alternative method described in § 146.113(c), if it elects to use the alternative method.
(3) Treats an individual with fewer than 63 consecutive days without creditable coverage as having a significant break in coverage in violation of § 146.113(b)(2)(iii).
(4) Takes either a waiting period or an affiliation period into account when calculating a significant break in coverage, as prohibited by § 146.113(b)(2)(iii).
(5) Otherwise fails to comply with § 146.113.
c. Failure to comply with the provisions regarding certification and disclosure of previous coverage (§ 146.115).
Except as provided in paragraph (c)(b), the plan sponsor of a self-funded non-Federal governmental plan may not elect to exempt its plan from the requirements of this paragraph.
Failure to comply with the requirements in § 146.115 regarding certification and disclosure of previous coverage includes those circumstances in which a non-Federal governmental plan or issuer offering group health insurance coverage does the following:
(1) Fails to ensure that individuals who request certification receive it.
(2) Fails to automatically provide certificates of creditable coverage promptly, either—
(i) When the individual ceases to be covered under the plan (whether or not COBRA continuation coverage is offered or elected); or
(ii) When the COBRA continuation coverage is exhausted or is terminated by the individual, if COBRA continuation coverage was offered and was elected.
(3) Fails to provide certificates of creditable coverage promptly upon request.
(4) Fails to provide the required information in certificates of creditable coverage.
(5) Fails to provide certificates of creditable coverage to dependents.
(6) Fails to accept other evidence of creditable coverage as provided in § 146.115(c). (The plan sponsor of a self-funded non-Federal governmental plan may elect to exempt its plan from the requirements of this paragraph (6)).
(7) Otherwise fails to comply with § 146.115.
d. Failure to comply with the provisions regarding special enrollment periods (§ 146.117).
Failure to comply with the § 146.117 requirements regarding special enrollment periods includes those circumstances in which an issuer or a non-Federal governmental plan does the following:
(1) Fails to permit employees and dependents to enroll for coverage if they satisfy the conditions of § 146.117(a) or (b).
(2) Fails to provide coverage on a timely basis to individuals protected by a special enrollment period as provided in § 146.117.
(3) Fails to provide the employee with a description of the plan's or issuer's special enrollment rules on or before the time the employee is offered the opportunity to enroll as provided in § 146.117(c).
(4) Otherwise fails to comply with § 146.117.
e. Failure to comply with the HMO affiliation period provisions (§ 146.119).
Failure to comply with the § 146.119 affiliation period requirements includes those circumstances in which an HMO that offers group health insurance coverage does the following:
(1) Imposes a pre-existing condition exclusion period.
(2) Charges a premium for months in an affiliation period.
(3) Fails to impose an affiliation period uniformly without regard to any health status-related factor.
(4) Imposes an affiliation period that is longer than 2 months (or 3 months for late enrollees), or one that begins later than the enrollment date or does not run concurrently with any waiting period.
(5) Otherwise fails to comply with § 146.119.
f. Failure to comply with the provisions regarding nondiscrimination (§ 146.121).
Failure to comply with the § 146.121 prohibitions regarding nondiscrimination includes those circumstances in which an issuer or a non-Federal governmental plan does the following:
(1) Applies rules of eligibility (including continued eligibility) to enroll under the terms of the plan based any of the health-status related factors described in § 146.121(a).
(2) Requires an individual as a condition of enrollment or re-enrollment to pay a higher premium than others similarly situated by reason of a health-status related factor of the individual or the individual's dependent.
(3) Otherwise fails to comply with § 146.121.
g. Failure to comply with the provisions relating to benefits for mothers and newborns (§ 146.130) in States where the § 146.130 standards are applicable.
Failure of an issuer or a non-Federal governmental plan to comply with the standards in § 146.130 relating to benefits for mothers and newborns includes the following:
(1) Restricts benefits for a mother or her newborn to less than 48 hours following a vaginal delivery or less than 96 hours following a delivery by cesarean section, unless the attending provider decides, in consultation with the mother, to discharge the mother or newborn earlier.
(2) Fails to calculate the length of stay from the time of delivery when delivery occurs in a hospital, or from the time of admission when delivery occurs outside the hospital.
(3) Penalizes an attending provider for complying with the law.
(4) Offers incentives to an attending provider to provide care in a manner inconsistent with the provisions of § 146.130.
(5) Denies the mother or newborn eligibility or continued eligibility to enroll under the plan to avoid complying with § 146.130.
(6) Provides payments or rebates to mothers to encourage them to accept less than the minimum stay required.
(7) Requires an attending provider to obtain authorization to prescribe a hospital length of stay of up to 48 hours (or 96 hours) after delivery.
(8) Imposes deductibles, coinsurance, or other cost-sharing measures for any portion of a 48-hour (or 96-hour) hospital stay that are less favorable than those imposed on any preceding portion of the stay.
(9) In the case of a non-Federal governmental plan, fails to provide participants and beneficiaries with a statement describing the requirements of the Newborns’ and Mothers’ Health Protection Act of 1996, using the language provided at § 146.130(d)(2), not later than 60 days after the first day of the first plan year beginning on or after January 1, 1999.
(10) Otherwise fails to comply with § 146.130.
h. Failure to comply with the provisions pertaining to parity in the application of certain limits to mental health benefits in the large group market (§ 146.136).
Failure of a non-Federal governmental plan offered by a large employer or health insurance issuer offering health insurance coverage to large employers to comply with the § 146.136 provisions pertaining to parity in the application of certain limits to mental health benefits (with respect to a plan that must comply with such provisions) includes the following:
(1) Sale of a product by a health insurance issuer that fails to comply with the mental health parity provisions of § 146.136.
(2) Failure of a non-Federal governmental plan to comply with the annual and lifetime dollar limits provisions concerning mental health parity.
i. Failure to comply with the Women's Health and Cancer Rights Act of 1998 (section 2706 of the PHS Act, 42 U.S.C. 300gg-06).
j. Failure to comply with the provisions regarding guaranteed availability of coverage in the small group market (§ 146.150).
Failure to provide guaranteed availability in the small group market as provided in § 146.150 includes those circumstances in which a health insurance issuer offering any health insurance coverage to group health plans in the small group market does the following:
(1) Fails to offer all products on a guaranteed availability basis to all small employers.
(2) Fails to define a small employer using the definition at § 144.103, unless otherwise provided under State law; that is, generally an employer with between 2 and 50 employees.
(3) Fails to count as employees all individual employees that an employer wants to include in the group by applying a more restrictive definition of “employee” than is permitted by § 144.103.
(4) Fails to accept all employee dependents who are qualified under the terms of the employer's group health plan.
(5) Sets agent commissions for sales to small employers so low as to discourage agents from marketing policies to, or enrolling, these groups so that a failure to offer coverage results.
(6) Unreasonably delays the processing of applications submitted by small employers, so that a break in coverage of more than 63 days results.
(7) Fails to offer to any small employer on a guaranteed availability basis any product that the issuer sells to small employers through one or more associations that are not bona fide associations, as defined in § 144.103. The requirement to guarantee availability of such products to all small employers applies whether or not the small employer is a member of, or could qualify for membership in, that association.
(8) Otherwise fails to comply with § 146.150.
k. Failure to comply with the requirements regarding guaranteed renewability in either the large or small group market (§ 146.152).
Failure to provide guaranteed renewability of coverage as provided in § 146.152 includes those circumstances in which a health insurance issuer offering health insurance coverage to a group health plan in the small or large group market does the following:
(1) Fails to renew or continue in force coverage at the option of the plan sponsor unless one of the specific exceptions in § 146.152(b) is met.
(2) Fails to follow the requirements as described in § 146.152(c)-(e) relating to the discontinuance of a particular product or withdrawal from the market of a particular product.
(3) Fails to renew coverage of an individual employer who has been a member of an association when the individual employer ceases to be a member of the association, unless it is a bona fide association as defined in § 144.103, and the issuer terminates coverage for all former members on a uniform basis.
(4) Fails to act uniformly if the issuer cancels coverage.
(5) Otherwise fails to comply with § 146.152.
l. Failure to comply with the requirements relating to disclosure of information (§ 146.160).
Failure to make reasonable disclosure as provided in § 146.160 includes those circumstances in which an issuer offering group health insurance coverage to a small employer, as defined in § 144.103, does the following:
(1) Fails to disclose all information concerning all products available from the issuer in the small group market as defined in § 144.103.
(2) Otherwise fails to comply with § 146.160.
a. Failure to comply with the requirements regarding guaranteed availability of coverage (§ 148.120).
In States that are not implementing an acceptable alternative mechanism described in § 148.128, failure to provide guaranteed availability with no preexisting condition exclusion period as provided in § 148.120 includes those circumstances in which an issuer does the following:
(1) Fails to provide to eligible individuals, on a guaranteed availability basis, at least one of the following:
(i) Enrollment in all individual market policies it actually markets.
(ii) The two most popular policies described in § 148.120(c)(2).
(iii) Two representative policy forms as described in § 148.120(c)(3).
(2) Imposes any preexisting condition exclusion or affiliation period on eligible individuals under any policy that it sells on a guaranteed availability basis.
(3) Sets agent commissions for sales to eligible individuals so low as to discourage agents from marketing policies to, or enrolling, these individuals so that a failure to offer coverage results.
(4) Unreasonably delays the processing of applications submitted by eligible individuals.
(5) Fails to offer to any eligible individual as defined in § 148.103 (on a guaranteed availability basis with no preexisting condition exclusions) any product the issuer sells to individuals through one or more associations that are not bona fide associations, as defined in § 144.103, unless the issuer has designated at least two other products (as its two most popular or its two representative policies) that it will sell to eligible individuals.
(6) Denies an eligible individual a policy on the basis that the individual has had a significant break in coverage even though a substantially complete application was filed on or before the 63rd day after the prior group coverage ended.
(7) Otherwise fails to comply with § 148.120.
b. Failure to comply with the requirements regarding guaranteed renewability of coverage (§ 148.122).
Failure to provide guaranteed renewability as provided in § 148.122 includes those circumstances in which an issuer does the following:
(1) Fails to renew or continue in force coverage at the option of the individual, unless one of the specific exceptions in § 148.122 is met.
(2) Fails to follow the requirements relating to the discontinuance of a particular product or withdrawal from the market of a particular product as described in § 148.122(d).
(3) Fails to continue coverage at the option of the individual after the individual becomes eligible for Medicare.
(4) Fails to renew coverage for an individual who has been a member of an association when the individual ceases to be a member of the association, unless the association is a bona fide association as defined in § 144.103 and the issuer uniformly terminates coverage for all former members.
(5) Otherwise fails to comply with § 148.122.
c. Failure to comply with the requirements regarding certification and disclosure of coverage (§ 148.124).
Failure to comply with the requirements of § 148.124 regarding certification and disclosure of previous coverage includes those circumstances in which an issuer does any of the following:
(1) Fails to provide automatic certificates of creditable coverage promptly.
(2) Fails to disclose the required information in certificates of creditable coverage as provided in § 148.124(b).
(3) Fails to provide certificates of creditable coverage to dependents who are insured in the individual market and whose coverage ceases under an individual policy.
(4) Fails to credit coverage or establish eligibility as provided in § 148.124 solely because the individual is unable to obtain a certificate. This includes failing to accept, acknowledge, consider, or otherwise use other evidence of creditable coverage described in § 146.115(c) submitted by, or on behalf of, an individual to establish that person is an eligible individual.
(5) Otherwise fails to comply with § 148.124.
d. Failure to comply with the requirements regarding determination of an eligible individual (§ 148.126).
Failure to determine, as provided in § 148.126, that an applicant for health insurance is an eligible individual includes those circumstances in which an issuer does the following:
(1) Fails to identify eligible individuals, to provide information regarding all coverage options, and to issue policies promptly.
(2) Requires eligible individuals to specify their desire to invoke the requirements of part 148 or to explicitly request their rights under the law in order to obtain information about products available to them.
(3) Otherwise fails to comply with § 148.126.
e. Failure to comply with the standards relating to benefits for mothers and newborns (§ 148.170).
In States where the § 148.170 standards are applicable (see § 148.170(e)), failure to comply with the § 148.170 standards relating to benefits for mothers and newborns includes those circumstances in which a health insurance issuer does the following:
(1) Restricts benefits for a mother or her newborn to fewer than 48 hours following a vaginal delivery or fewer than 96 hours following a delivery by cesarean section, unless the attending provider decides, in consultation with the mother, to discharge the mother or newborn earlier.
(2) Fails to calculate the length of stay from the time of delivery when delivery occurs in a hospital, or from the time of admission when delivery occurs outside the hospital.
(3) Requires an attending provider to obtain authorization to prescribe a hospital length of stay of up to 48 hours (or 96 hours, if applicable) after delivery.
(4) Imposes deductibles, coinsurance, or other cost-sharing measures for any portion of a 48-hour (or 96-hour, if applicable) hospital stay that are less favorable than those imposed on any preceding portion of the stay.
(5) [Reserved]
(6) Penalizes a provider for complying with the law.
(7) Offers incentives to a provider to provide care in a manner inconsistent with the provisions of § 148.170 to avoid complying with § 148.170.
(8) Denies the mother or newborn eligibility or continued eligibility solely to avoid the requirements of § 148.170.
(9) Provides incentives to mothers to encourage them to accept less than the minimum stay requirement.
(10) Fails to provide participants and beneficiaries with a statement describing the requirements of the Newborns’ and Mothers’ Health Protection Act of 1996, using the language provided at § 148.170 (d)(2), not later than March 1, 1999.
(11) Otherwise fails to comply with § 148.170.
f. Failure to comply with the Women's Health and Cancer Rights Act of 1998 (section 2752 of the PHS Act, 42 U.S.C. 300gg-52) and any additional implementing regulations.
In this subpart, unless the context indicates otherwise:
(a) The ALJ has the authority, including all of the authority conferred by the Administrative Procedure Act, to adopt whatever procedures may be necessary or proper to carry out in an efficient and effective manner the ALJ's duty to provide a fair and impartial hearing on the record and to issue an initial decision concerning the imposition of a civil money penalty.
(b) The ALJ's authority includes the authority to modify, consistent with the Administrative Procedure Act (5 U.S.C. 552a), any hearing procedures set out in this subpart.
(c) The ALJ does not have the authority to find invalid or refuse to follow Federal statutes or regulations.
(a) A respondent has a right to a hearing before an ALJ if it files a request for hearing that complies with § 150.407(a), within 30 days after the date of issuance of either CMS's notice of proposed assessment under § 150.343 or notice that an alternative dispute resolution process has terminated. The request for hearing should be addressed as instructed in the notice of proposed determination. “Date of issuance” is five (5) days after the filing date, unless there is a showing that the document was received earlier.
(b) The ALJ may extend the time for filing a request for hearing only if the ALJ finds that the respondent was prevented by events or circumstances beyond its control from filing its request within the time specified above. Any request for an extension of time must be made promptly by written motion.
(a) The request for hearing must do the following:
(1) Identify any factual or legal bases for the assessment with which the respondent disagrees.
(2) Describe with reasonable specificity the basis for the disagreement, including any affirmative facts or legal arguments on which the respondent is relying.
(b) The request for hearing must identify the relevant notice of assessment by date and attach a copy of the notice.
The ALJ may permit CMS to amend its notice of assessment, or permit the respondent to amend a request for hearing that complies with § 150.407(a), if the ALJ finds that no undue prejudice to either party will result.
An ALJ will order a request for hearing dismissed if the ALJ determines that:
(a) The request for hearing was not filed within 30 days as specified by § 150.405(a) or any extension of time granted by the ALJ pursuant to § 150.405(b).
(b) The request for hearing fails to meet the requirements of § 150.407.
(c) The entity that filed the request for hearing is not a respondent under § 150.401.
(d) The respondent has abandoned its request.
(e) The respondent withdraws its request for hearing.
CMS has exclusive authority to settle any issue or any case, without the consent of the administrative law judge at any time before or after the administrative law judge's decision.
(a) The ALJ may grant the request of an entity, other than the respondent, to intervene if all of the following occur:
(1) The entity has a significant interest relating to the subject matter of the case.
(2) Disposition of the case will, as a practical matter, likely impair or impede the entity's ability to protect that interest.
(3) The entity's interest is not adequately represented by the existing parties.
(4) The intervention will not unduly delay or prejudice the adjudication of the rights of the existing parties.
(b) A request for intervention must specify the grounds for intervention and the manner in which the entity seeks to participate in the proceedings. Any participation by an intervenor must be in the manner and by any deadline set by the ALJ.
(c) The Department of Labor or the IRS may intervene without regard to paragraphs (a)(1) through (a)(3) of this section.
(a) The ALJ has the authority to hear and decide the following issues:
(1) Whether a basis exists to assess a civil money penalty against the respondent.
(2) Whether the amount of the assessed civil money penalty is reasonable.
(b) In deciding whether the amount of a civil money penalty is reasonable, the ALJ—
(1) Applies the factors that are identified in § 150.317.
(2) May consider evidence of record relating to any factor that CMS did not apply in making its initial determination, so long as that factor is identified in this subpart.
(c) If the ALJ finds that a basis exists to assess a civil money penalty, the ALJ may sustain, reduce, or increase the penalty that CMS assessed.
(a) All hearings before an ALJ are on the record. The ALJ may receive argument or testimony in writing, in person, or by telephone. The ALJ may receive testimony by telephone only if the ALJ determines that doing so is in the interest of justice and economy and that no party will be unduly prejudiced. The ALJ may require submission of a witness’ direct testimony in writing only if the witness is available for cross-examination.
(b) The ALJ may decide a case based solely on the written record where there is no disputed issue of material
Any attorney who is to appear on behalf of a party must promptly file, with the ALJ, a notice of appearance.
No party or person (except employees of the ALJ's office) may communicate in any way with the ALJ on any matter at issue in a case, unless on notice and opportunity for both parties to participate. This provision does not prohibit a party or person from inquiring about the status of a case or asking routine questions concerning administrative functions or procedures.
(a) Any request to the ALJ for an order or ruling must be by motion, stating the relief sought, the authority relied upon, and the facts alleged. All motions must be in writing, with a copy served on the opposing party, except in either of the following situations:
(1) The motion is presented during an oral proceeding before an ALJ at which both parties have the opportunity to be present.
(2) An extension of time is being requested by agreement of the parties or with waiver of objections by the opposing party.
(b) Unless otherwise specified in this subpart, any response or opposition to a motion must be filed within 20 days of the party's receipt of the motion. The ALJ does not rule on a motion before the time for filing a response to the motion has expired except where the response is filed at an earlier date, where the opposing party consents to the motion being granted, or where the ALJ determines that the motion should be denied.
(a) Every submission filed with the ALJ must be filed in triplicate, including one original of any signed documents, and include:
(1) A caption on the first page, setting forth the title of the case, the docket number (if known), and a description of the submission (such as “Motion for Discovery”).
(2) The signatory's name, address, and telephone number.
(3) A signed certificate of service, specifying each address to which a copy of the submission is sent, the date on which it is sent, and the method of service.
(b) A party filing a submission with the ALJ must, at the time of filing, serve a copy of such submission on the opposing party. An intervenor filing a submission with the ALJ must, at the time of filing, serve a copy of the submission on all parties. Service must be made by mailing or hand delivering a copy of the submission to the opposing party. If a party is represented by an attorney, service must be made on the attorney.
(a) For purposes of this subpart, in computing any period of time, the time begins with the day following the act, event, or default and includes the last day of the period unless it is a Saturday, Sunday, or legal holiday observed by the Federal government, in which event it includes the next business day. When the period of time allowed is less than seven days, intermediate Saturdays, Sundays, and legal holidays observed by the Federal government are excluded from the computation.
(b) The period of time for filing any responsive pleading or papers is determined by the date of receipt (as defined in § 150.401) of the submission to which a response is being made.
(c) The ALJ may grant extensions of the filing deadlines specified in these regulations or set by the ALJ for good cause shown (except that requests for extensions of time to file a request for hearing may be granted only on the grounds specified in section § 150.405(b)).
After receipt of the request for hearing, the ALJ assigned to the case or someone acting on behalf of the ALJ will send a letter to the parties that acknowledges receipt of the request for
(a) The parties must identify any need for discovery from the opposing party as soon as possible, but no later than the time for the reply specified in § 150.437(c). Upon request of a party, the ALJ may stay proceedings for a reasonable period pending completion of discovery if the ALJ determines that a party would not be able to make the submissions required by § 150.437 without discovery. The parties should attempt to resolve any discovery issues informally before seeking an order from the ALJ.
(b) Discovery devices may include requests for production of documents, requests for admission, interrogatories, depositions, and stipulations. The ALJ orders interrogatories or depositions only if these are the only means to develop the record adequately on an issue that the ALJ must resolve to decide the case.
(c) Each discovery request must be responded to within 30 days of receipt, unless that period of time is extended for good cause by the ALJ.
(d) A party to whom a discovery request is directed may object in writing for any of the following reasons:
(1) Compliance with the request is unduly burdensome or expensive.
(2) Compliance with the request will unduly delay the proceedings.
(3) The request seeks information that is wholly outside of any matter in dispute.
(4) The request seeks privileged information. Any party asserting a claim of privilege must sufficiently describe the information or document being withheld to show that the privilege applies. If an asserted privilege applies to only part of a document, a party withholding the entire document must state why the nonprivileged part is not segregable.
(e) Any motion to compel discovery must be filed within 10 days after receipt of objections to the party's discovery request, within 10 days after the time for response to the discovery request has elapsed if no response is received, or within 10 days after receipt of an incomplete response to the discovery request. The motion must be reasonably specific as to the information or document sought and must state its relevance to the issues in the case.
(a) Within 60 days of its receipt of the acknowledgment provided for in § 150.431, the respondent must file the following with the ALJ:
(1) A statement of its arguments concerning CMS's notice of assessment (respondent's brief), including citations to the respondent's hearing exhibits provided in accordance with paragraph (a)(2) of this section. The brief may not address factual or legal bases for the assessment that the respondent did not identify as disputed in its request for hearing or in an amendment to that request permitted by the ALJ.
(2) All documents (including any affidavits) supporting its arguments, tabbed and organized chronologically and accompanied by an indexed list identifying each document (respondent's proposed hearing exhibits).
(3) A statement regarding whether there is a need for an in-person hearing and, if so, a list of proposed witnesses and a summary of their expected testimony that refers to any factual dispute to which the testimony will relate.
(4) Any stipulations or admissions.
(b) Within 30 days of its receipt of the respondent's submission required by paragraph (a) of this section, CMS will file the following with the ALJ:
(1) A statement responding to the respondent's brief, including the respondent's proposed hearing exhibits, if appropriate. The statement may include citations to CMS's proposed hearing exhibits submitted in accordance with paragraph (b)(2) of this section.
(2) Any documents supporting CMS's response not already submitted as part of the respondent's proposed hearing exhibits, organized and indexed as indicated in paragraph (a)(2) of this section (CMS's proposed hearing exhibits).
(3) A statement regarding whether there is a need for an in-person hearing
(4) Any admissions or stipulations.
(c) Within 15 days of its receipt of CMS's submission required by paragraph (b) of this section, the respondent may file with the ALJ a reply to CMS's submission.
(a) Any proposed hearing exhibit submitted by a party in accordance with § 150.437 is deemed part of the record unless the opposing party raises an objection to that exhibit and the ALJ rules to exclude it from the record. An objection must be raised either in writing prior to the prehearing conference provided for in § 150.441 or at the prehearing conference. The ALJ may require a party to submit the original hearing exhibit on his or her own motion or in response to a challenge to the authenticity of a proposed hearing exhibit.
(b) A party may introduce a proposed hearing exhibit following the times for submission specified in § 150.437 only if the party establishes to the satisfaction of the ALJ that it could not have produced the exhibit earlier and that the opposing party will not be prejudiced.
An ALJ may schedule one or more prehearing conferences (generally conducted by telephone) on the ALJ's own motion or at the request of either party for the purpose of any of the following:
(a) Hearing argument on any outstanding discovery request.
(b) Establishing a schedule for any supplements to the submissions required by § 150.437 because of information obtained through discovery.
(c) Hearing argument on a motion.
(d) Discussing whether the parties can agree to submission of the case on a stipulated record.
(e) Establishing a schedule for an in-person hearing, including setting deadlines for the submission of written direct testimony or for the written reports of experts.
(f) Discussing whether the issues for a hearing can be simplified or narrowed.
(g) Discussing potential settlement of the case.
(h) Discussing any other procedural or substantive issues.
(a) In all cases before an ALJ—
(1) CMS has the burden of coming forward with evidence sufficient to establish a prima facie case;
(2) The respondent has the burden of coming forward with evidence in response, once CMS has established a prima facie case; and
(3) CMS has the burden of persuasion regarding facts material to the assessment; and
(4) The respondent has the burden of persuasion regarding facts relating to an affirmative defense.
(b) The preponderance of the evidence standard applies to all cases before the ALJ.
(a) The ALJ will determine the admissibility of evidence.
(b) Except as provided in this part, the ALJ will not be bound by the Federal Rules of Evidence. However, the ALJ may apply the Federal Rules of Evidence where appropriate; for example, to exclude unreliable evidence.
(c) The ALJ excludes irrelevant or immaterial evidence.
(d) Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or by considerations of undue delay or needless presentation of cumulative evidence.
(e) Although relevant, evidence is excluded if it is privileged under Federal law.
(f) Evidence concerning offers of compromise or settlement made in this action will be inadmissible to the extent provided in the Federal Rules of Evidence.
(g) Evidence of acts other than those at issue in the instant case is admissible in determining the amount of any civil money penalty if those acts are used under §§ 150.317 and 150.323 of this part to consider the entity's prior
(h) The ALJ will permit the parties to introduce rebuttal witnesses and evidence.
(i) All documents and other evidence offered or taken for the record will be open to examination by all parties, unless the ALJ orders otherwise for good cause shown.
(j) The ALJ may not consider evidence regarding the willingness and ability to enter into and successfully complete a corrective action plan when that evidence pertains to matters occurring after CMS's notice under § 150.307.
(a) Any testimony that is taken in-person or by telephone is recorded and transcribed. The ALJ may order that other proceedings in a case, such as a prehearing conference or oral argument of a motion, be recorded and transcribed.
(b) The transcript of any testimony, exhibits and other evidence that is admitted, and all pleadings and other documents that are filed in the case constitute the record for purposes of an ALJ decision.
(c) For good cause, the ALJ may order appropriate redactions made to the record.
Generally, each party is responsible for 50 percent of the transcript cost. Where there is an intervenor, the ALJ determines what percentage of the transcript cost is to be paid for by the intervenor.
Each party is entitled to file proposed findings and conclusions, and supporting reasons, in a posthearing brief. The ALJ will establish the schedule by which such briefs must be filed. The ALJ may direct the parties to brief specific questions in a case and may impose page limits on posthearing briefs. Additionally, the ALJ may allow the parties to file posthearing reply briefs.
The ALJ will issue an initial agency decision based only on the record and on applicable law; the decision will contain findings of fact and conclusions of law. The ALJ's decision is final and appealable after 30 days unless it is modified or vacated under § 150.457.
(a) The ALJ may sanction a party or an attorney for failing to comply with an order or other directive or with a requirement of a regulation, for abandonment of a case, or for other actions that interfere with the speedy, orderly or fair conduct of the hearing. Any sanction that is imposed will relate reasonably to the severity and nature of the failure or action.
(b) A sanction may include any of the following actions:
(1) In the case of failure or refusal to provide or permit discovery, drawing negative fact inferences or treating such failure or refusal as an admission by deeming the matter, or certain facts, to be established.
(2) Prohibiting a party from introducing certain evidence or otherwise advocating a particular claim or defense.
(3) Striking pleadings, in whole or in part.
(4) Staying the case.
(5) Dismissing the case.
(6) Entering a decision by default.
(7) Refusing to consider any motion or other document that is not filed in a timely manner.
(8) Taking other appropriate action.
(a) The Administrator of CMS (which for purposes of this subsection may include his or her delegate), at his or her discretion, may review in whole or in part any initial agency decision issued under § 150.453.
(b) The Administrator may decide to review an initial agency decision if it appears from a preliminary review of
(1) The ALJ made an erroneous interpretation of law or regulation.
(2) The initial agency decision is not supported by substantial evidence.
(3) The ALJ has incorrectly assumed or denied jurisdiction or extended his or her authority to a degree not provided for by statute or regulation.
(4) The ALJ decision requires clarification, amplification, or an alternative legal basis for the decision.
(5) The ALJ decision otherwise requires modification, reversal, or remand.
(c) Within 30 days of the date of the initial agency decision, the Administrator will mail a notice advising the respondent of any intent to review the decision in whole or in part.
(d) Within 30 days of receipt of a notice that the Administrator intends to review an initial agency decision, the respondent may submit, in writing, to the Administrator any arguments in support of, or exceptions to, the initial agency decision.
(e) This submission of the information indicated in paragraph (d) of this section must be limited to issues the Administrator has identified in his or her notice of intent to review, if the Administrator has given notice of an intent to review the initial agency decision only in part. A copy of this submission must be sent to the other party.
(f) After receipt of any submissions made pursuant to paragraph (d) of this section and any additional submissions for which the Administrator may provide, the Administrator will affirm, reverse, modify, or remand the initial agency decision. The Administrator will mail a copy of his or her decision to the respondent.
(g) The Administrator's decision will be based on the record on which the initial agency decision was based (as forwarded by the ALJ to the Administrator) and any materials submitted pursuant to paragraphs (b), (d), and (f) of this section.
(h) The Administrator's decision may rely on decisions of any courts and other applicable law, whether or not cited in the initial agency decision.
(a)
(1) Filing a notice of appeal in that court within 30 days from the date of a final order.
(2) Simultaneously sending a copy of the notice of appeal by registered mail to CMS.
(b)
(c)
If any entity fails to pay an assessment after it becomes a final order, or after the court has entered final judgment in favor of CMS, CMS refers the matter to the Attorney General, who brings an action against the entity in the appropriate United States district court to recover the amount assessed.
In an action brought under § 150.461, the validity and appropriateness of the final order described in § 150.459 is not subject to review.
(a) Any funds collected under § 150.461 are paid to CMS.
(b) The funds are available without appropriation until expended.
(c) The funds may be used only for the purpose of enforcing the HIPAA requirements for which the penalty was assessed.