[Federal Register Volume 62, Number 245 (Monday, December 22, 1997)]
[Proposed Rules]
[Pages 66967-66968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33263]



Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / 
Proposed Rules

[[Page 66967]]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[Reg-109704-97]
RIN 1545-AV12


HIPAA Mental Health Parity Act

AGENCY: Internal Revenue Service (IRS), Treasury.

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

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SUMMARY: Elsewhere in this issue of the Federal Register, the IRS is 
issuing temporary regulations relating to mental health parity 
requirements imposed on group health plans. These requirements were 
added to the Internal Revenue Code by section 1532 of the Taxpayer 
Relief Act of 1997. The IRS is issuing the temporary regulations at the 
same time that the Pension and Welfare Benefits Administration of the 
U.S. Department of Labor and the Health Care Financing Administration 
of the U.S. Department of Health and Human Services are issuing 
substantially similar interim final regulations relating to mental 
health parity requirements added by the Mental Health Parity Act of 
1996 to the Employee Retirement Income Security Act of 1974 and the 
Public Health Service Act. The temporary regulations provide guidance 
to employers and group health plans relating to the new mental health 
parity requirements. The text of those temporary regulations also 
serves as the text of these proposed regulations.

DATES: Written comments and requests for a public hearing must be 
received by March 23, 1998.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-109704-97), room 
5226, Internal Revenue Service, POB 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered between the 
hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (REG-109704-97), Courier's 
Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, 
Washington, DC.
    Alternatively, taxpayers may submit comments electronically via the 
Internet by selecting the ``Tax Regs'' option on the IRS Home Page, or 
by submitting comments directly to the IRS Internet site at: <a href="http://
www.irs.ustreas.gov/prod/tax__regs/comments.html">http://
www.irs.ustreas.gov/prod/tax__regs/comments.html</a>

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Russ 
Weinheimer, (202) 622-4695; concerning submissions or to request a 
hearing, Mike Slaughter, 202-622-7180. These are not toll-free numbers.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information referenced in this notice of proposed 
rulemaking has been submitted to the Office of Management and Budget 
for review in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)).
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by the Office of Management and Budget.
    The collection of information is in Sec. 54.9812-1T (see the 
temporary regulations published elsewhere in this issue of the Federal 
Register). The collection of information is required if a plan wishes 
to avail itself of an exemption provided under the statute. The likely 
respondents are business or other for-profit institutions, nonprofit 
institutions, small businesses or organizations, and Taft-Hartley 
trusts. Responses to this collection of information are required in 
order to obtain the benefit of being exempt from the mental health 
parity requirement.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally tax returns and 
tax return information are confidential, as required by 26 U.S.C. 6103.
    Comments on the collection of information should be sent to the 
Office of Management and Budget, Attn: Desk Officer for the Department 
of the Treasury, Office of Information and Regulatory Affairs, 
Washington, DC 20503, with copies to the Internal Revenue Service, 
Attn: IRS Reports Clearance Officer, T:FP, Washington, DC 20224. 
Comments on the collection of information should be received by 
February 20, 1998. Comments are specifically requested concerning:

--Whether the proposed collection of information is necessary for the 
proper performance of the functions of the Internal Revenue Service, 
including whether the information will have practical utility;
--The accuracy of the estimated burden associated with the proposed 
collection of information (see the preamble to the temporary 
regulations published elsewhere in this issue of the Federal Register);
--How to enhance the quality, utility, and clarity of the information 
to be collected;
--How to minimize the burden of complying with the proposed collection 
of information, including the application of automated collection 
techniques or other forms of information technology; and
--Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.

Background

    The temporary regulations published elsewhere in this issue of the 
Federal Register add Sec. 54.9812-1T to the Miscellaneous Excise Tax 
Regulations. These regulations are being published as part of a joint 
rulemaking with the Department of Labor and the Department of Health 
and Human Services (the joint rulemaking).
    The text of those temporary regulations also serves as the text of 
these proposed regulations. The preamble to the temporary regulations 
explains the temporary regulations.

Special Analyses

    Pursuant to sections 603(a) and 605(b) of the Regulatory 
Flexibility Act, it is hereby certified that the collection of 
information referenced in this notice of proposed rulemaking (see 
Sec. 54.9812-1T of the temporary regulations published elsewhere in 
this issue of the Federal Register) will not have a significant 
economic impact on a substantial number of small entities. Employers 
with 50 or fewer employees are not subject to the law. Moreover, even 
for employers that are subject to the mental health parity 
requirements, no collection of information is required unless they 
qualify for and claim the 1% increased cost exemption. Even for 
employers subject to the law who claim the exemption, the estimated 
time for each response is 2 minutes. Thus, for example, an employer 
with 100 employees in its group health plan that claimed the 1% 
increased cost exemption, that took advantage of the three-month 
transitional period provided in the temporary regulations and that 
received 10 requests to examine the assumptions used in claiming the 
exemption would incur a total one-time burden of less than 4 hours. At 
an estimated cost of $11 per hour, this would result in a one-time cost 
of less than $44. This is not a significant economic impact.
    This regulation is not subject to the Unfunded Mandates Reform Act 
of 1995 because the regulation is an interpretive regulation. For 
further information and

[[Page 66968]]

for analyses relating to the joint rulemaking, see the preamble to the 
joint rulemaking. Pursuant to section 7805(f) of the Internal Revenue 
Code, this notice of proposed rulemaking will be submitted to the Chief 
Counsel for Advocacy of the Small Business Administration for comment 
on its impact on small business.

Comments and Requests for a Public Hearing

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

Drafting Information

    The principal author of these proposed regulations is Russ 
Weinheimer, Office of the Chief Counsel, Employee Benefits and Exempt 
Organizations. However, other personnel from the IRS and Treasury 
Department participated in their development. The proposed regulations, 
as well as the temporary regulations, have been developed in 
coordination with personnel from the U.S. Department of Labor and U.S. 
Department of Health and Human Services.

List of Subjects in 26 CFR Part 54

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

Proposed Amendments to the Regulations

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

PART 54--PENSION EXCISE TAXES

    Paragraph 1. The authority citation for part 54 is amended by 
adding an entry in numerical order to read as follows:

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

    Section 54.9812-1 is also issued under 26 U.S.C. 9833. * * *
    Par. 2. Section 54.9812-1 is added to read as follows:


Sec. 54.9812-1  Parity in the application of certain limits to mental 
health benefits.

    [The text of this proposed section is the same as the text of 
Sec. 54.9812-1T published elsewhere in this issue of the Federal 
Register].
Michael P. Dolan,
Deputy Commissioner of Internal Revenue.
[FR Doc. 97-33263 Filed 12-19-97; 8:45 am]
BILLING CODE 4830-01-U