EBSA Press Release: Federal Rules Give Americans Greater Rights and Protections for Health Benefits [04/01/1997]

Archived News Release — Caution: Information may be out of date.

For more information call: 202-219-8921

Millions of Americans will have important new health benefit protections when they change jobs or lose health coverage under interim regulations announced today by the U. S. Departments of Labor, Health and Human Services and the Treasury.

The regulations provide guidance to help employees and their families understand these new rights and to assist employers, plans and insurance companies in complying with the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The law was signed by President Clinton on Aug. 21, 1996.

The interim rules are effective for all plans with respect to the certification requirements of HIPAA beginning June 1, 1997; however, the other HIPAA provisions are generally effective for plan years beginning after June 30, 1997.

"Health coverage is important to the physical and financial well-being of millions of Americans," said Acting Labor Secretary Cynthia A. Metzler. "The Administration has worked tirelessly to ensure that workers and their families have greater access to health care. These regulations are the first step in providing greater access and portability of health coverage."

The Labor Department also is making available today through its publication hotline (1-800-998-7542) a handy reference booklet for employees and employers. The booklet, titled "Questions and Answers: Recent Changes in Health Care Law," gives an overview of the new law and answers the most commonly asked questions.

The regulations are designed to provide greater access, portability and renewability of health coverage. Among other things, the regulations:

• limit exclusions for preexisting medical conditions;
• give employees and their families credit for prior health coverage with their new group health plan or issuer;
• provide new enrollment rights for individuals who lose coverage or have a new dependent;
• prohibit discrimination against employees and dependents in enrollment and premiums due to health status; and
• guarantee availability of health insurance for small employers and renewability of health insurance coverage in both the small and large group markets.

Also today, the Labor Department issued interim guidance for private sector group health plans to comply with HIPAA's requirements on disclosure of information to employees. Those rules require that group health plans:

• notify covered workers within 60 days of any material reduction in covered services or benefits under their plan;
• give workers information in the plan brochure if an insurance company is used by the plan, including an explanation of whether their benefits are guaranteed under an insurance contract or policy; and
• list in the plan brochure the office within the Labor Department where individuals can get help or information about their rights under federal law or HIPAA.

The Labor Department's regulation also requires group health plans to tell covered workers that under federal law hospital stays for childbirth usually cannot be less than 48 hours for normal deliveries and 96 hours for cesarean sections. Finally, the rules provide guidance on the use of electronic communication systems, such as e-mail, to furnish information to workers.

Public comments are requested on both interim rules to assist in developing the final rules. Comments or requests for a hearing should be submitted in writing to the Office of Regulations and Interpretations, Pension and Welfare Benefits Administrations, U. S. Department of Labor, Room N-5669, 200 Constitution Ave., N.W., Washington, D. C. 20210, Attention: "Interim Portability and Renewability Rules" or "Interim Disclosure Rules," as appropriate.

HIPAA Interim Rules
 

U.S. Department of Labor

April 1, 1997

• The Health Insurance Portability and Accountability Act (HIPAA), signed into law by President Clinton on August 21, 1996, offers new protections for an estimated 25 million American workers.
• HIPAA amended the Employee Retirement Income Security Act (ERISA), the Public Health Service Act, and the Internal Revenue Code to provide improved portability and continuity of health insurance coverage.
• The new law:
• -- limits exclusions for preexisting medical conditions; -- provides credit for prior health coverage and a process for providing certificates concerning prior coverage to a new group health plan or issuer;

  -- provides new rights that allow individuals to enroll for health coverage when they lose other health coverage or add a new dependent;

  -- prohibits discrimination in enrollment and in premiums charged to employees and their dependents based on health status-related factors;

  -- guarantees availability of health insurance coverage for small employers and renewability of health insurance coverage in both the small and large group markets; and,

  -- preserves the states' role in regulating health insurance, including the states' authority to provide greater protections.

• Interim rules published today by the Departments of Labor, Health and Human Services, and the Treasury provide guidance to both employees and employers with respect to these HIPAA provisions in the following areas:

Preexisting Condition Exclusions

-- must relate to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during the 6 month period prior to an individual's enrollment date.

-- may not last for more than 12 months (18 months for late enrollees) after an individual's enrollment date.

-- must be reduced by the number of days of the individual's prior creditable coverage that occurred without a break in coverage of 63 days or more.

Creditable Coverage

-- includes prior coverage under another group health plan, an individual health insurance policy, COBRA, Medicaid, Medicare, or a public health plan.

Certificates of Creditable Coverage

-- must be provided automatically by the plan when an individual loses coverage under the plan or exhausts COBRA continuation coverage.

-- must be provided, if requested, before losing coverage or within 24 months of losing coverage.

-- may be provided through the use of a model certificate which is contained in the preamble to the regulations.

Special Enrollment Rights

-- are provided for individuals who lose their coverage in certain situations.

-- are provided for individuals who become a new dependent through marriage, birth, adoption or placement for adoption.

Discrimination Prohibitions

-- ensure that individuals are not excluded from coverage, or charged more for benefits offered by a plan or issuer, based on health status-related factors.

• The Department of Labor simultaneously issued interim rules today regarding new disclosure requirements under ERISA for group health plans. Under these new rules, plans are now required to:

-- furnish a summary of a "material reduction in covered services or benefits" to covered workers within 60 days after the change has been adopted by the plan.

-- provide information to workers if an insurance company is used by the plan -- including an explanation of whether their benefits are guaranteed under an insurance contract or policy.

-- list in their plan brochure the office of the Labor Department where individuals can get assistance or information about their rights under federal law in general or HIPAA in particular.

• The disclosure rules also provide guidance on the use of electronic media (e.g., E-mail) to furnish covered workers with required group health plan disclosures.
• The interim rules are effective for all plans with respect to the certification requirements of HIPAA beginning June 1, 1997. However, the other HIPAA provisions are generally effective for plan years beginning after June 30, 1997.
• The three Departments sought to minimize the burden on employers and insurers in implementing the new rules. For example, a model certificate of coverage and a model notice relating to the categories of benefits provided under a plan were included with the preamble to the regulations.
• In addition, a handy reference guide, titled "Questions and Answers: Recent Changes in Health Care Law," was published by the Labor Department in December 1996 to help employees and employers understand their rights and obligations under HIPAA.
• Today the Labor Department released an addendum to the booklet that contains additional questions and answers covered by the new regulations. The Department expects to publish a revised booklet that incorporates this addendum and other changes in the near future.
• The booklet and addendum give an overview of the new law and provide answers to the most commonly asked questions. Since last fall, the Pension and Welfare Benefits Administration (PWBA) has received thousands of calls from plan participants and plan administrators asking about the effect of the new law.
• The booklet and addendum are available on the Department's Website at http://www.dol.gov/dol/pwba and through the Department's Publication Hotline, telephone number 1-800-998-7542.
• Individuals needing additional assistance or clarification should call the PWBA technical assistance staff at 202-219-8776.

Archived News Release — Caution: Information may be out of date.