Federal Register / Vol. 69, No. 250 / Thursday, December 30, 2004 / Proposed Rules 78825

2,080 hours (although for this purpose 

not more than 40 hours per week may 

be used); and 

(iv) Adding the quotient determined 

under paragraph (e)(3)(iii) of this section 

to the number determined under 

paragraph (e)(3)(i). 

(4) Rounding. For purposes of 

paragraph (e)(3)(iv) of this section, all 

fractions are disregarded. For instance, 

a figure of 50.9 is deemed to be 50. 

(5) Employers not in existence in the 

preceding year. In the case of an 

employer that was in existence for less 

than the entire preceding calendar year 

(including an employer that was not in 

existence at all), a determination of the 

average number of employees that the 

employer employs is based on the 

average number of employees that it is 

reasonably expected the employer will 

employ on business days in the current 

calendar year. 

(6) Scope of the term ‘‘employer’’. For 

purposes of this paragraph (e), employer 

includes any predecessor of the 

employer. In addition, all persons 

treated as a single employer under 

section 414(b), (c), (m), or (o) of the 

Internal Revenue Code are treated as 

one employer. 

(7) Special rule for multiemployer 

plans. (i) With respect to the application 

of a rule in this part to a multiemployer 

plan (as defined in section 3(37) of 

ERISA), each employer with at least one 

employee participating in the plan is 

considered to employ the same average 

number of employees. That number is 

the highest number that results by 

applying the rules of paragraphs (e)(1) 

through (6) of this section separately to 

each of the employers. 

(ii) The rules of this paragraph (e)(7) 

are illustrated by the following example:

Example. (i) Facts. Twenty five employers 

have at least one employee who participates 

in Multiemployer Plan M. Among these 25 

employers, Employer K has 51 employees, 

determined under the rules of paragraphs 

(e)(1) through (6) of this section. Each of the 

other 24 employers has fewer than 50 

employees. 

(ii) Conclusion. With respect to the 

application of a rule in this part to M, each 

of the 25 employers is considered to employ 

51 employees.

Dated: November 24, 2004. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: December 2, 2004. 

Tommy G. Thompson, 

Secretary, Department of Health and Human 

Services.

[FR Doc. 04–28113 Filed 12–29–04; 8:45 am] 

BILLING CODE 4830–01–P; 4510–29–P; 4120–01–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service 

26 CFR Part 54 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Part 2590 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

45 CFR Part 146 

RIN 0938–AL64 

Request for Information on BenefitSpecific Waiting Periods Under HIPAA 

Titles I & IV

AGENCIES: Internal Revenue Service, 

Department of the Treasury; Employee 

Benefits Security Administration, 

Department of Labor; Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services.

ACTION: Request for information.

SUMMARY: The Departments invite 

comments about benefit-specific waiting 

periods. This solicitation is to ensure 

that the public can provide input into 

any criteria used to determine whether 

a benefit-specific waiting period utilized 

by a group health plan or issuer is a 

preexisting condition exclusion under 

HIPAA. The Departments are requesting 

this information to help decide whether 

to issue any guidance on this question, 

and the content of any such guidance.

DATES: The Departments request that 

comments be submitted on or before 

March 30, 2005.

ADDRESSES: Written comments should 

be submitted with a signed original and 

three copies (except for electronic 

submissions) to any of the addresses 

specified below. Any comment that is 

submitted to any Department will be 

shared with the other Departments. 

Comments to the IRS can be 

addressed to: CC:PA:LPD:PR (REG–

130370–04), Room 5203, Internal 

Revenue Service, POB 7604, Ben 

Franklin Station, Washington, DC 

20044.

In the alternative, comments may be 

hand-delivered between the hours of 8 

a.m. and 5 p.m. to: CC:PA:LPD:PR 

(REG–130370–04), Courier’s Desk, 

Internal Revenue Service, 1111 

Constitution Avenue, NW., Washington 

DC 20224. 

Alternatively, comments may be 

transmitted electronically via the IRS 

Internet site at: www.irs.gov/regs.

Comments to the Department of Labor 

can be addressed to: U.S. Department of 

Labor, Employee Benefits Security 

Administration, 200 Constitution 

Avenue NW., Room C–5331, 

Washington, DC 20210, Attention:

Benefit-Specific Waiting Period 

Comments. 

Alternatively, comments may be 

hand-delivered between the hours of 9 

a.m. and 5 p.m. to the same address. 

Comments may also be transmitted to 

the Department of Labor by e-mail to: E–

OHPSCA.EBSA@dol.gov.

Comments to HHS can be submitted 

as described below: 

In commenting, please refer to file 

code CMS 2150–NC. Because of staff 

and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

three ways (no duplicates, please): 

Electronically. You may submit 

electronic comments to http://

www.cms.hhs.gov/regulations/

ecomments (attachments should be in 

Microsoft Word, WordPerfect, or Excel; 

however, we prefer Microsoft Word). 

By mail. You may mail written 

comments (one original and two copies) 

to the following address ONLY: Centers 

for Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–2150–NC, 

P.O. Box 8017, Baltimore, MD 21244–

8010. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments (one original 

and two copies) before the close of the 

comment period to one of the following 

addresses. If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786–

7195 in advance to schedule your 

arrival with one of our staff members. 

Room 445–G, Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201; or 7500 

Security Boulevard, Baltimore, MD 

21244–1850. 

(Because access to the interior of the 

HHH Building is not readily available to 

persons without Federal Government 

identification, commenters are 

encouraged to leave their comments in 

the CMS drop slots located in the main 

lobby of the building. A stamp-in clock 

is available for persons wishing to retain 

a proof of filing by stamping in and 

78826 Federal Register / Vol. 69, No. 250 / Thursday, December 30, 2004 / Proposed Rules 

retaining an extra copy of the comments 

being filed.)

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

All submissions to the IRS will be 

open to public inspection and copying 

in room 1621, 1111 Constitution 

Avenue, NW., Washington, DC from 9 

a.m. to 4 p.m. 

All submissions to the Department of 

Labor will be open to public inspection 

and copying in the Public Disclosure 

Room, Employee Benefits Security 

Administration, U.S. Department of 

Labor, Room N–1513, 200 Constitution 

Avenue, NW., Washington, DC from 

8:30 a.m. to 4:30 p.m. 

All submissions timely submitted to 

HHS will be available for public 

inspection as they are received, 

generally beginning approximately three 

weeks after publication of a document, 

at the headquarters for the Centers for 

Medicare & Medicaid Services, 7500 

Security Boulevard, Baltimore, MD 

21244, Monday through Friday of each 

week from 8:30 a.m. to 4 p.m. To 

schedule an appointment to view public 

comments, phone (410) 786–7195.

FOR FURTHER INFORMATION CONTACT:

Dave Mlawsky, Centers for Medicare & 

Medicaid Services (CMS), Department 

of Health and Human Services, at 1–

877–267–2323 ext. 61565; Amy Turner, 

Employee Benefits Security 

Administration, Department of Labor, at 

(202) 693–8335; or Russ Weinheimer, 

Internal Revenue Service, Department of 

the Treasury, at (202) 622–6080.

SUPPLEMENTARY INFORMATION:

Customer Service Information 

To assist consumers and the regulated 

community, the Departments have 

issued questions and answers 

concerning HIPAA. Individuals 

interested in obtaining copies of 

Department of Labor publications 

concerning changes in health care law 

may call a toll free number, 1–866–444–

EBSA (3272), or access the publications 

on-line at www.dol.gov/ebsa, the 

Department of Labor’s Web site. These 

regulations as well as other information 

on the new health care laws are also 

available on the Department of Labor’s 

interactive Web pages, Health Elaws. In 

addition, CMS’s publication entitled 

‘‘Protecting Your Health Insurance 

Coverage’’ is available by calling 1–800–

633–4227 or on the Department of 

Health and Human Services’ Web site 

(www.cms.hhs.gov/hipaa1), which 

includes the interactive Web pages, 

HIPAA Online. Copies of the HIPAA 

regulations, as well as notices and press 

releases related to HIPAA and other 

health care laws, are also available at 

the above-referenced Web sites. 

Background 

The Health Insurance Portability and 

Accountability Act of 1996 (HIPAA) was 

enacted on August 21, 1996 (Pub. L. 

104–191). HIPAA amended the Internal 

Revenue Code of 1986 (Code), the 

Employee Retirement Income Security 

Act of 1974 (ERISA), and the Public 

Health Service Act (PHS Act) to provide 

for, among other things, improved 

portability and continuity of health 

coverage in the group and the 

individual insurance markets, including 

group health plan coverage provided in 

connection with employment. Health 

coverage is regulated in part by the 

federal government, through the Code, 

ERISA, the PHS Act and other federal 

provisions, and in part by the states. 

The portability, access, and 

renewability provisions of HIPAA are 

set forth in Subtitle K of the Code, Part 

7 of Subtitle B of Title I of ERISA, and 

Title XXVII of the PHS Act (referred to 

below as the HIPAA portability 

provisions). The HIPAA portability 

provisions are designed to improve the 

availability and portability of health 

insurance coverage by limiting 

exclusions for preexisting conditions 

and providing credit for prior coverage, 

guaranteeing availability of health 

coverage for small employers, 

prohibiting discrimination against 

employees and dependents based on 

health status, and guaranteeing 

renewability of health insurance 

coverage for employers and individuals. 

The HIPAA portability provisions also 

include rules that guarantee access to 

individual health coverage for certain 

people who lose their group coverage. 

These provisions also set forth other 

requirements imposed on health 

insurance issuers. 

The Departments issued interim 

regulations published in the Federal 

Register on April 8, 1997 to carry out 

these provisions. Today, elsewhere in 

this issue of the Federal Register, the 

Departments are publishing final 

regulations governing the HIPAA 

portability requirements. Also being 

published is a set of proposed 

regulations addressing additional and 

discrete issues with an invitation for 

comments.

Included in today’s final regulations 

is an example illustrating that a plan 

providing first-day coverage for other 

medical/surgical benefits but imposing a 

waiting period on benefits for pregnancy 

is imposing a preexisting condition 

exclusion. Because HIPAA prohibits 

imposing a preexisting condition 

exclusion on pregnancy benefits, the 

final regulations clarify that this plan 

provision is impermissible. Several 

comments (including those of several 

state insurance commissioners’ offices) 

have asked the Departments to clarify 

that a preexisting condition exclusion 

would also include any benefit-specific 

waiting period or other temporary 

exclusion of specific benefits. 

Essentially, these comments argue that 

some plans and issuers use benefitspecific waiting periods that are, in 

effect, preexisting condition exclusions 

that do not comply with HIPAA’s 

statutory limits. The rationale for this 

argument is that these exclusion periods 

are likely to affect principally 

individuals who had a condition before 

the first day of any coverage under the 

plan or health insurance coverage. In 

addition, other comments suggest that 

these exclusions violate HIPAA’s 

nondiscrimination provisions. 

Nonetheless, the comments do not 

suggest that it would be impermissible 

to impose a waiting period for all 

benefits available under the plan or to 

impose permanent exclusions on 

specific benefits (that is, these types of 

exclusions would not be considered a 

preexisting condition exclusion nor 

would they be considered 

discrimination based on health status). 

Comments 

The Departments welcome further 

comments on this issue of benefitspecific waiting periods. In particular, 

the Departments are interested in 

comments reflecting the experience of 

group health plans, health insurance 

issuers, states, individuals, and other 

interested parties with waiting periods 

on specific benefits such as 

tonsillectomies, hernia repairs, and 

organ transplants. Rules under 

consideration might also affect plans 

that cover only emergency services for 

an initial period; comments on these 

types of provisions are also welcome. 

One possible standard for determining 

whether a benefit-specific waiting 

period is operating as a preexisting 

condition exclusion is whether the 

waiting period is likely to affect 

principally individuals who had a 

condition before the first day of any 

coverage under the plan or health 

insurance coverage. Several factors 

affect the application of such a standard 

to a particular plan’s waiting period, 

including the relevant population 

considered to determine whether the 

impact is likely to affect principally 

individuals who had a condition before 

the first day of coverage, the condition 

to which a plan’s waiting period is 

applied, and the length of a plan’s 

Federal Register / Vol. 69, No. 250 / Thursday, December 30, 2004 / Proposed Rules 78827

waiting period (because, generally, as 

the waiting period becomes longer, a 

greater number of individuals affected 

will not have had the condition before 

enrolling). The Departments welcome 

comments on this standard and these 

factors, and also invite suggestions for 

alternative standards. 

In order to quantify the costs and 

benefits associated with an 

interpretation that certain benefitspecific waiting periods function as 

preexisting condition exclusions, the 

Departments are interested also in 

comments, studies, surveys, or reports 

on the prevalence of such exclusions in 

group health coverage and individual 

health insurance coverage, what types of 

conditions or treatments are subject to 

benefit-specific waiting periods, the 

duration of such periods, and 

alternative cost-control mechanisms that 

may be available.

Signed at Washington, DC, this 8th day of 

December, 2004. 

Nancy J. Marks, 

Associate Chief Counsel/Division Counsel, 

Tax Exempt and Government Entities, 

Internal Revenue Service, Department of the 

Treasury.

Signed at Washington, DC, this 9th day of 

December, 2004. 

William F. Sweetnam, Jr., 

Benefits Tax Counsel, Department of the 

Treasury.

Signed at Washington, DC, this 1st day of 

December, 2004. 

Ann L. Combs, 

Assistant Secretary, Employee Benefits 

Security Administration, U.S. Department of 

Labor.

Dated: November 24, 2004. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services.

Dated: December 2, 2004. 

Tommy G. Thompson, 

Secretary, Department of Health and Human 

Services.

[FR Doc. 04–28114 Filed 12–29–04; 8:45 am] 

BILLING CODE 4830–01–P; 4510–29–P; 4120–01–P