59130 Federal Register / Vol. 79, No. 190 / Wednesday, October 1, 2014 / Rules and Regulations 

1Public Law 104–204, 110 Stat. 2944 (September 

26, 1996). 

2Public Law 110–343, 122 Stat. 3881 (October 3, 

2008). 

3Public Law 104–204, 110 Stat. 2935 (September 

26, 1996). 

4Public Law 105–277, 112 Stat. 2681–436 

(October 21, 1998). 

5Public Law 110–233, 122 Stat. 881 (May 21, 

2008). 

6Public Law 111–3, 123 Stat. 65 (February 4, 

2009). 

7Public Law 110–381, 122 Stat. 4081 (October 9, 

2008). 

8The Patient Protection and Affordable Care Act, 

Public Law 111–148, was enacted on March 23, 

2010, and the Health Care and Education 

Reconciliation Act, Public Law 111–152, was 

enacted on March 30, 2010. (These statutes are 

collectively known as the ‘‘Affordable Care Act’’.) 

9The term ‘‘group health plan’’ is used in title 

XXVII of the PHS Act, part 7 of ERISA, and chapter 

100 of the Code, and is distinct from the term 

‘‘health plan,’’ as used in other provisions of title 

I of the Affordable Care Act. The term ‘‘health plan’’ 

does not include self-insured group health plans. 

10See 62 FR 16894, 16903 (Apr. 8, 1997), which 

states that these benefits are generally not health 

insurance coverage. 

Dated: September 9, 2014. 

David L. Miller, 

Associate Administrator, Federal Insurance 

and Mitigation Administration, Department 

of Homeland Security, Federal Emergency 

Management Agency. 

[FR Doc. 2014–23370 Filed 9–30–14; 8:45 am] 

BILLING CODE 9110–12–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 54 

[T.D. 9697] 

RIN 1545–BL90 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Part 2590 

RIN 1210–AB60 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

[CMS–9946–F] 

45 CFR Part 146 

RIN 0938–AS16 

Amendments to Excepted Benefits 

AGENCY: 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: Final rules. 

SUMMARY: This document contains final 

regulations that amend the regulations 

regarding excepted benefits under the 

Employee Retirement Income Security 

Act of 1974, the Internal Revenue Code 

(the Code), and the Public Health 

Service Act. Excepted benefits are 

generally exempt from the health reform 

requirements that were added to those 

laws by the Health Insurance Portability 

and Accountability Act and the Patient 

Protection and Affordable Care Act. In 

addition, eligibility for excepted 

benefits does not preclude an individual 

from eligibility for a premium tax credit 

under section 36B of the Code if an 

individual chooses to enroll in coverage 

under a Qualified Health Plan through 

an Affordable Insurance Exchange. 

These regulations finalize some but not 

all of the proposed rules with minor 

modifications; additional guidance on 

limited wraparound coverage is 

forthcoming. 

DATES: Effective date. These final 

regulations are effective on December 1, 

2014. 

Applicability date. These final 

regulations apply to group health plans 

and group health insurance issuers for 

plan years beginning on or after January 

1, 2015. 

FOR FURTHER INFORMATION CONTACT: 

Amy Turner or Beth Baum, Employee 

Benefits Security Administration, 

Department of Labor, at (202) 693–8335; 

Karen Levin, Internal Revenue Service, 

Department of the Treasury, at (202) 

317–5500; Jacob Ackerman, Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, at (301) 492–4179. 

Customer Service Information: 

Individuals interested in obtaining 

information from the Department of 

Labor concerning employment-based 

health coverage laws, may call the EBSA 

Toll-Free Hotline at 1–866–444–EBSA 

(3272) or visit the Department of Labor’s 

Web site (http://www.dol.gov/ebsa). In 

addition, information from HHS on 

private health insurance for consumers 

can be found on the Centers for 

Medicare & Medicaid Services (CMS) 

Web site (www.cms.gov/cciio) and 

information on health reform can be 

found at www.HealthCare.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Health Insurance Portability and 

Accountability Act of 1996 (HIPAA), 

Public Law 104–191, 110 Stat. 1936, 

added title XXVII of the Public Health 

Service Act (PHS Act), part 7 of the 

Employee Retirement Income Security 

Act of 1974 (ERISA), and chapter 100 of 

the Internal Revenue Code (the Code), 

providing portability and 

nondiscrimination provisions with 

respect to health coverage. These 

provisions of the PHS Act, ERISA, and 

the Code were later augmented by other 

consumer protection laws, including the 

Mental Health Parity Act of 1996,1 the 

Mental Health Parity and Addiction 

Equity Act of 2008,2 the Newborns’ and 

Mothers’ Health Protection Act,3 the 

Women’s Health and Cancer Rights 

Act,4 the Genetic Information 

Nondiscrimination Act of 2008,5 the 

Children’s Health Insurance Program 

Reauthorization Act of 2009,6 Michelle’s 

Law,7 and the Affordable Care Act.8

The Affordable Care Act reorganizes, 

amends, and adds to the provisions of 

part A of title XXVII of the PHS Act 

relating to group health plans and 

health insurance issuers in the group 

and individual markets. The term 

‘‘group health plan’’ includes both 

insured and self-insured group health 

plans.9 Section 715(a)(1) of ERISA and 

section 9815(a)(1) of the Code, as added 

by the Affordable Care Act, incorporate 

the provisions of part A of title XXVII 

of the PHS Act into ERISA and the Code 

to make them applicable to group health 

plans and health insurance issuers 

providing health insurance coverage in 

connection with group health plans. 

The PHS Act sections incorporated by 

these references are sections 2701 

through 2728. 

Sections 2722 and 2763 of the PHS 

Act, section 732 of ERISA, and section 

9831 of the Code provide that the 

requirements of title XXVII of the PHS 

Act, part 7 of ERISA, and chapter 100 

of the Code, respectively, generally do 

not apply to excepted benefits. Excepted 

benefits are described in section 2791 of 

the PHS Act, section 733 of ERISA, and 

section 9832 of the Code. 

The parallel statutory provisions 

establish four categories of excepted 

benefits. The first category includes 

benefits that are generally not health 

coverage10 (such as automobile 

insurance, liability insurance, workers 

compensation, and accidental death and 

dismemberment coverage). The benefits 

in this category are excepted in all 

circumstances. In contrast, the benefits 

in the second, third, and fourth 

categories are types of health coverage 

but are excepted only if certain 

conditions are met. 

The second category of excepted 

benefits is limited excepted benefits, 

which may include limited-scope vision 

or dental benefits, and benefits for longterm care, nursing home care, home 

health care, or community-based care. 


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Federal Register / Vol. 79, No. 190 / Wednesday, October 1, 2014 / Rules and Regulations 59131 

11 26 CFR 54.9831–1(c)(3)(v); 29 CFR 

2590.732(c)(3)(v); 45 CFR 146.145(b)(3)(v). 

12 26 CFR 54.9831–1(c)(4); 29 CFR 2590.732(c)(4); 

45 CFR 146.145(b)(4). See also Q7 in FAQs about 

Affordable Care Act Implementation Part XI, 

available at http://www.dol.gov/ebsa/faqs/faqaca11.html. 

13 26 CFR 54.9831–1(c)(5); 29 CFR 2590.732(c)(5); 

45 CFR 146.145(b)(5). The Departments issued 

additional guidance regarding supplemental health 

insurance coverage as excepted benefits. See EBSA 

Field Assistance Bulletin No. 2007–04 (available at 

http://www.dol.gov/ebsa/pdf/fab2007-4.pdf); CMS 

Insurance Standards Bulletin 08–01 (available at 

http://www.cms.gov/CCIIO/Resources/Files/

Downloads/hipaa_08_01_508.pdf); and IRS Notice 

2008–23 (available at http://www.irs.gov/irb/2008- 

07_IRB/ar09.html). 

14 69 FR 78720 (Dec. 30, 2004). 

15 78 FR 77632. 

16Under the HIPAA regulations, benefits 

provided under a health FSA are only excepted for 

a class of participants if other group health 

coverage, not limited to excepted benefits, is made 

available for the year to the class of participants; 

and the arrangement is structured so that the 

maximum benefit payable to any participant in the 

class for a year does not exceed an amount specified 

in the regulations. 

Section 2791(c)(2)(C) of the PHS Act, 

section 733(c)(2)(C) of ERISA, and 

section 9832(c)(2)(C) of the Code 

authorize the Secretaries of Health and 

Human Services (HHS), Labor, and the 

Treasury (collectively, the Secretaries) 

to issue regulations establishing other 

similar limited benefits as excepted 

benefits. The Secretaries exercised this 

authority previously with respect to 

certain health flexible spending 

arrangements (health FSAs).11 To be 

excepted under this second category, 

the statute (specifically, ERISA section 

732(c)(1), PHS Act section 2722(c)(1), 

and section 9831(c)(1) of the Code) 

provides that limited benefits must 

either: (1) Be provided under a separate 

policy, certificate, or contract of 

insurance; or (2) otherwise not be an 

integral part of a group health plan, 

whether insured or self-insured. 

The third category of excepted 

benefits, referred to as ‘‘noncoordinated 

excepted benefits,’’ includes both 

coverage for only a specified disease or 

illness (such as cancer-only policies), 

and hospital indemnity or other fixed 

indemnity insurance. In the group 

market, these benefits are excepted only 

if all of the following conditions are 

met: (1) The benefits are provided under 

a separate policy, certificate, or contract 

of insurance; (2) there is no 

coordination between the provision of 

such benefits and any exclusion of 

benefits under any group health plan 

maintained by the same plan sponsor; 

and (3) the benefits are paid with 

respect to any event without regard to 

whether benefits are provided under 

any group health plan maintained by 

the same plan sponsor.12

The fourth category of excepted 

benefits is supplemental excepted 

benefits. Such benefits must be: (1) 

Coverage supplemental to Medicare, 

coverage supplemental to the Civilian 

Health and Medical Program of the 

Department of Veterans Affairs 

(CHAMPVA) or to Tricare, or similar 

coverage that is supplemental to 

coverage provided under a group health 

plan; and (2) provided under a separate 

policy, certificate, or contract of 

insurance.13

In 2004, the Departments of the 

Treasury, Labor, and HHS published 

final regulations with respect to 

excepted benefits (the HIPAA 

regulations).14 (Subsequent references to 

the ‘‘Departments’’ include all three 

Departments, unless the headings or 

context indicate otherwise.) On 

December 24, 2013, the Departments 

issued proposed regulations with 

respect to the second category of 

excepted benefits, limited excepted 

benefits (2013 proposed regulations).15

The 2013 proposed regulations 

proposed to: (1) Eliminate the 

requirement that participants pay an 

additional premium or contribution for 

limited-scope vision or dental benefits 

to qualify as benefits that are not an 

integral part of the plan; (2) set forth the 

criteria under which employee 

assistance programs (EAPs) constitute 

excepted benefits; and (3) allow plan 

sponsors in limited circumstances to 

offer, as excepted benefits, coverage that 

wraps around certain individual health 

insurance coverage. The Departments 

stated that, until rulemaking is 

finalized, through at least 2014, for 

purposes of enforcing the provisions of 

title XXVII of the PHS Act, part 7 of 

ERISA, and chapter 100 of the Code, the 

Departments will consider dental and 

vision benefits and EAP benefits 

meeting the conditions of the 2013 

proposed regulations to qualify as 

excepted benefits. 

After consideration of comments on 

the 2013 proposed regulations, the 

Departments are publishing final 

regulations regarding dental and vision 

benefits and EAP benefits. The 

Departments also intend to publish 

regulations that address limited 

wraparound coverage in the future, 

taking into account the extensive 

comments received on this issue. 

II. Overview of the Final Regulations 

A. Dental and Vision Benefits 

Under the HIPAA regulations, vision 

and dental benefits are excepted if they 

are limited in scope (described as 

benefits, substantially all of which are 

for treatment of the eyes or mouth, 

respectively) and are either: (1) 

Provided under a separate policy, 

certificate, or contract of insurance; or 

(2) are otherwise not an integral part of 

a group health plan. While only insured 

coverage may qualify under the first 

test, both insured and self-insured 

coverage may qualify under the second 

test. The HIPAA regulations provided 

that benefits are not an integral part of 

a plan if participants have the right to 

elect not to receive coverage for the 

benefits, and, if participants elect to 

receive coverage for such benefits, they 

pay an additional premium or 

contribution for the coverage. By 

contrast, health FSA benefits could 

qualify as excepted benefits without any 

participant contribution under the 

HIPAA regulations.16

As stated in the preamble to the 2013 

proposed regulations, following 

enactment of the Affordable Care Act, 

various stakeholders asked the 

Departments to amend the HIPAA 

regulations in order to remove 

conditions for limited-scope vision and 

dental benefits to be treated as excepted 

benefits. Specifically, some employers 

represented that, although their vision 

and dental benefits complied with the 

pre-Affordable Care Act requirements in 

title XXVII of the PHS Act, part 7 of 

ERISA, and chapter 100 of the Code 

(such as the nondiscrimination and 

preexisting condition exclusion 

provisions), compliance with certain 

Affordable Care Act provisions 

presented additional challenges. These 

employers argued that, where employers 

are providing such benefits on a selfinsured basis and without a 

contribution from employees, employers 

should not be required to charge a 

nominal contribution from participants 

simply for the benefits to qualify as 

excepted benefits. In some cases, the 

cost of collecting the nominal 

contribution would be greater than the 

contribution itself. Moreover, they 

pointed out that employers providing 

dental and vision benefits through a 

separate insurance policy are not 

required to charge a participant any 

premium or contribution in order for the 

dental or vision benefits to be 

considered excepted benefits. Similarly, 

consumer groups argued that, if an 

employer offers primary group health 

coverage that is treated as unaffordable 

under the Code, but offers limited-scope 

vision or dental coverage, such limitedscope vision or dental coverage should 

qualify as excepted benefits so as not to 

make such individuals ineligible to 

receive a premium tax credit under 

section 36B of the Code if they enroll in 


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59132 Federal Register / Vol. 79, No. 190 / Wednesday, October 1, 2014 / Rules and Regulations 

17See CMS, Frequently Asked Questions on 

Essential Health Benefits Bulletin, Q10 (February 

17, 2012) http://www.cms.gov/CCIIO/Resources/

Files/Downloads/ehb-faq-508.pdf. 

18The mental health parity provisions are 

included in PHS Act section 2726, ERISA section 

712, and Code section 9812. See also final 

regulations on mental health parity, published at 78 

FR 68239 (November 13, 2013). 

19See IRS Notice 2013–54 (available at 

http://www.irs.gov/pub/irs-drop/n-13–54.pdf) and 

DOL Technical Release 2013–03 (available at http:// 

www.dol.gov/ebsa/newsroom/tr13–03.html), Q&A 9. 

See also CMS Insurance Standards Bulletin— 

Application of Affordable Care Act Provisions to 

Certain Healthcare Arrangements (available at 

http://www.cms.gov/CCIIO/Resources/Regulationsand-Guidance/Downloads/cms-hra-notice-9-16- 

2013.pdf). 

coverage under a Qualified Health Plan 

(QHP) through an Affordable Insurance 

Exchange, or ‘‘Exchange’’ (also called a 

Health Insurance Marketplace or 

Marketplace). 

In response to these concerns, and to 

achieve greater consistency between 

insured and self-insured coverage, the 

2013 proposed regulations proposed 

eliminating the requirement under the 

HIPAA regulations that participants pay 

an additional premium or contribution 

for limited-scope vision or dental 

benefits to qualify as benefits that are 

not an integral part of a plan (and 

therefore to qualify as excepted 

benefits). 

The Departments invited comments 

on this approach. Many comments 

supported the concept of achieving 

greater consistency regarding the 

excepted benefits requirements for 

dental and vision benefits between 

insured and self-insured plans. One 

comment argued that the proposal 

undermined the inclusion of pediatric 

vision and dental coverage as an 

essential health benefit. Other 

comments requested clarification as to 

whether separately-administered and 

stand-alone dental and vision benefits 

offered separate from, or without a 

connection to, a primary plan could 

qualify as excepted benefits. 

Consistent with the 2013 proposed 

regulations, these final regulations 

eliminate the requirement under the 

HIPAA regulations that participants pay 

an additional premium or contribution 

for limited-scope vision or dental 

benefits to qualify as excepted benefits. 

As explained in the preamble to the 

2013 proposed regulations, without this 

change, an employer that establishes or 

maintains a self-insured plan could be 

required to charge a nominal 

contribution from participants simply 

for limited-scope vision and dental 

benefits to qualify as excepted benefits 

and, in some cases, the cost of collecting 

the nominal contribution would be 

greater than the contribution itself. In 

addition, if an employer offers primary 

group health coverage that is 

unaffordable to individuals, but limitedscope vision or dental coverage, without 

this modification, accepting the vision 

or dental coverage could make such 

individuals ineligible to receive a 

premium tax credit under section 36B of 

the Code if they enroll in coverage 

under a QHP through the Exchange. 

In addition, it is the Departments’ 

view that the final regulations do not 

undermine the inclusion of pediatric 

vision or dental coverage as essential 

health benefits. The requirement that 

issuers in the small group market offer 

coverage of essential health benefits is 

not changed, and that rule does not 

apply to large or self-insured plans. 

Moreover, PHS Act section 2711 (as 

incorporated into ERISA by section 715 

and the Code by section 9815) allows 

self-insured plans to choose any 

definition of essential health benefits 

that is authorized by the Secretary of 

HHS for purposes of the prohibition on 

lifetime or annual dollar limits on 

essential health benefits.17

These final regulations clarify that 

limited-scope vision or dental benefits 

do not have to be offered in connection 

with a separate offer of major medical or 

‘‘primary’’ group health coverage under 

the plan, in order to meet the statutory 

criterion that such benefits are 

‘‘otherwise not an integral part of the 

plan.’’ To meet this criterion, limitedscope vision or dental benefits can be 

provided without connection to a 

primary plan, or the limited-scope 

vision or dental benefits can be offered 

separately from the major medical or 

‘‘primary’’ coverage under the plan (as 

described in these final regulations). 

Under the 2013 proposed regulations, in 

order to satisfy the statutory excepted 

benefits criterion that such benefits 

cannot otherwise be ‘‘an integral part of 

the plan,’’ participants must be able to 

decline coverage. These final 

regulations provide that this criterion is 

satisfied if participants may decline 

coverage or the claims for the benefits 

are administered under a contract 

separate from claims administration for 

any other benefits under the plan. 

While coverage for long-term care 

benefits is not the focus of this rule, 

such benefits are also subject to the ‘‘not 

an integral part of a group health plan’’ 

standard in order to be classified as 

excepted benefits. Accordingly, the 

revisions discussed in this section of the 

preamble also apply to coverage of longterm care benefits. 

B. Employee Assistance Programs 

EAPs are typically programs offered 

by employers that can provide a wideranging set of benefits to address 

circumstances that might otherwise 

adversely affect employees’ work and 

health. Benefits may include referral 

services and short-term substance use 

disorder or mental health counseling, as 

well as financial counseling and legal 

services. They are typically available 

free of charge to employees and are 

often provided through third-party 

vendors. Benefits for medical care 

provided through an EAP would 

generally be considered group health 

plan coverage (and, therefore, minimum 

essential coverage), which would 

generally be subject to the HIPAA and 

Affordable Care Act market reform 

requirements (and could make 

individuals receiving benefits under an 

EAP ineligible to receive a premium tax 

credit under section 36B of the Code if 

they enroll in coverage under a QHP 

through the Exchange), unless the EAP 

meets the criteria for being excepted 

benefits. 

Since enactment of the Affordable 

Care Act, various stakeholders have 

asked the Departments to treat EAPs as 

excepted benefits for reasons analogous 

to the arguments described above with 

respect to vision and dental benefits. 

Specifically, some employers 

represented that compliance with the 

prohibition on annual dollar limits 

could be problematic as such benefits 

are typically very limited, and that EAPs 

generally are intended to provide 

benefits in addition to those provided 

under other group health plans 

sponsored by employers. Moreover, 

consumer groups have represented that 

EAPs with very limited benefits, which 

may be the only coverage offered to 

employees, could make such employees 

ineligible to receive a premium tax 

credit under section 36B of the Code if 

they enroll in coverage under a QHP 

through the Exchange. At the same time, 

the Departments recognize that no 

universal definition exists for EAPs, and 

are concerned that employers not act to 

shift primary coverage to a separate 

‘‘EAP plan,’’ exempt from the consumer 

protection provisions of title XXVII of 

the PHS Act, part 7 of ERISA, and 

chapter 100 of the Code, including the 

mental health parity provisions.18

In guidance issued on September 13, 

2013, the Departments stated their 

intent to amend the excepted benefits 

regulations with respect to EAPs.19 The 

guidance also provided transition relief, 

stating, ‘‘[u]ntil rulemaking is finalized, 

through at least 2014, the Departments 

will consider an employee assistance 

program or EAP to constitute excepted 

benefits only if the employee assistance 


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Federal Register / Vol. 79, No. 190 / Wednesday, October 1, 2014 / Rules and Regulations 59133 

20Other examples of EAPs that do not provide 

significant benefits in the nature of medical care, 

discussed in IRS Notice 2004–50 Q&A–10 include 

(1) an EAP with benefits that consist primarily of 

free or low-cost confidential short-term counseling 

(which could address substance abuse, alcoholism, 

mental health or emotional disorders, financial or 

legal difficulties, and dependent care needs) to 

identify an employee’s problem that may affect job 

performance and, when appropriate, referrals to an 

outside organization, facility or program to assist 

the employee in resolving the problem; and (2) a 

wellness program that provides a wide-range of 

education and fitness services (also including sports 

and recreation activities, stress management, and 

health screenings) designed to improve the overall 

health of the employees and prevent illness, where 

any costs charged to the individual for participating 

in the services are separate from the individual’s 

coverage under the health plan. 

21 In the 2013 proposed regulations, the 

requirements regarding EAPs were proposed in 

paragraph (c)(3)(vii) of 26 CFR 54.9831–1, 29 CFR 

2590.732, and 45 CFR 146.145. However, HHS 

regulations published on October 30, 2013 and 

effective December 30, 2013 redesignated 45 CFR 

146.145(c) as paragraph (b) (78 FR at 65092). 

Additionally, because these regulations are 

finalizing only the requirements related to dental 

and vision benefits and EAP benefits, these final 

regulations have been renumbered so that the 

requirements regarding EAPs are now contained in 

paragraph (c)(3)(vi) of 26 CFR 54.9831–1 and 29 

CFR 2590.732, and in paragraph (b)(3)(vi) of 45 CFR 

146.145. As stated earlier in this preamble, the 

Departments also intend to publish regulations that 

address limited wraparound coverage in the future, 

taking into account the extensive comments 

received on this issue. Those provisions are 

intended to be codified in paragraph (c)(3)(vii) of 

26 CFR 54.9831–1 and 29 CFR 2590.732, and in 

paragraph (b)(3)(vii) of 45 CFR 146.145. 

program or EAP does not provide 

significant benefits in the nature of 

medical care or treatment. For this 

purpose, employers may use a 

reasonable, good faith interpretation of 

whether an employee assistance 

program or EAP provides significant 

benefits in the nature of medical care or 

treatment.’’ 

The 2013 proposed regulations set 

forth criteria for an EAP to qualify as 

excepted benefits beginning in 2015. 

Under the 2013 proposed regulations, 

benefits provided under EAPs are 

excepted if four criteria are met. First, 

the program cannot provide significant 

benefits in the nature of medical care. 

The Departments invited comments on 

how to define ‘‘significant.’’ For 

example, the Departments requested 

comments as to whether a program that 

provides no more than 10 outpatient 

visits for mental health or substance use 

disorder counseling, an annual wellness 

checkup, immunizations, and diabetes 

counseling, with no inpatient care 

benefits, should be considered to 

provide significant benefits in the 

nature of medical care.20

The second proposed criterion for an 

EAP to constitute excepted benefits 

under the 2013 proposed regulations is 

that its benefits cannot be coordinated 

with benefits under another group 

health plan. The Departments outlined 

three conditions to meet this proposed 

criterion: (i) participants in the separate 

group health plan must not be required 

to exhaust benefits under the EAP 

(making the EAP a ‘‘gatekeeper’’) before 

an individual is eligible for benefits 

under the other group health plan; (ii) 

participant eligibility for benefits under 

the EAP must not be dependent on 

participation in another group health 

plan; and (iii) benefits under the EAP 

must not be financed by another group 

health plan. 

The third proposed criterion for an 

EAP to constitute excepted benefits 

under the 2013 proposed regulations is 

that no employee premiums or 

contributions be required to participate 

in the EAP. The fourth proposed 

criterion is that there is no cost sharing 

under the EAP. 

The criteria in the 2013 proposed 

regulations were intended to ensure that 

employers are able to continue offering 

EAPs as supplemental benefits to other 

coverage, and to ensure that in 

circumstances in which an EAP with 

limited benefits is the only coverage, or 

the only affordable coverage provided to 

an employee, that the coverage does not 

unreasonably disqualify an employee 

from potential eligibility to receive a 

premium tax credit under section 36B of 

the Code if the employee enrolls in 

coverage under a QHP through the 

Exchange. The Departments requested 

comments on whether the criteria 

proposed are sufficient to prevent the 

potential for abuse, including the 

evasion of compliance with the mental 

health parity provisions, and whether 

different or additional standards should 

be included. 

The Departments received a number 

of comments relating to the treatment of 

EAPs as excepted benefits. While the 

comments generally supported treating 

EAPs as excepted benefits, there were 

many suggestions for clarifying or 

modifying the specific requirements in 

the 2013 proposed regulations for EAPs 

to constitute excepted benefits. In 

particular, many comments included 

suggestions for clarifying what is meant 

by significant benefits in the nature of 

medical care. Most of these comments 

raised concerns about the suggestion in 

the preamble to propose using 

numerical limits on the number of 

visits. 

Some comments requested that EAPs 

be allowed to provide wellness and 

disease management programs, 

provided such programs do not provide 

significant benefits in the nature of 

medical care. However, treating 

wellness programs as excepted benefits 

by including them in an EAP would 

circumvent consumer protections 

contained in the statutory standards for 

wellness programs under section 2705(j) 

of the PHS Act as enacted by the 

Affordable Care Act. This suggestion is 

not adopted in these final regulations. 

Several comments opposed the 

prohibition in the 2013 proposed 

regulations on an EAP being financed by 

the other group health plan to qualify as 

excepted benefits. In particular, the 

comments noted that often the EAP and 

the group health plan are financed by a 

single payment or otherwise combined, 

and the requirement would result in 

disruptions of existing commercial 

arrangements. Moreover, these 

comments noted, the other requirements 

sufficiently protected against 

inappropriate coordination of the EAP 

benefits with the benefits of the other 

group health plan. In addition, there 

were a number of comments concerning 

EAPs that were beyond the scope of the 

2013 proposed regulations. 

After consideration of the comments, 

the Departments are finalizing the 

proposal, with one modification related 

to financing, described below.21 As with 

the 2013 proposed regulations, these 

final regulations provide that, for an 

EAP to constitute excepted benefits, the 

EAP must satisfy four requirements. 

The first requirement of the 2013 

proposed regulations and these final 

regulations is that the EAP does not 

provide significant benefits in the 

nature of medical care. For this purpose, 

the amount, scope, and duration of 

covered services are taken into account. 

For example, an EAP that provides only 

limited, short-term outpatient 

counseling for substance use disorder 

services (without covering inpatient, 

residential, partial residential or 

intensive outpatient care) without 

requiring prior authorization or review 

for medical necessity does not provide 

significant benefits in the nature of 

medical care. At the same time, a 

program that provides disease 

management services (such as 

laboratory testing, counseling, and 

prescription drugs) for individuals with 

chronic conditions, such as diabetes, 

does provide significant benefits in the 

nature of medical care. The Departments 

may, through guidance, provide 

additional clarification in the future 

regarding when a program provides 

significant benefits in the nature of 

medical care. 

The second requirement of these final 

regulations is that for an EAP to 

constitute excepted benefits, its benefits 

cannot be coordinated with the benefits 

under another group health plan. This 

requirement has two elements: (1) 


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Participants in the other group health 

plan must not be required to use and 

exhaust benefits under the EAP (making 

the EAP a ‘‘gatekeeper’’) before an 

individual is eligible for benefits under 

the other group health plan; and (2) 

participant eligibility for benefits under 

the EAP must not be dependent on 

participation in another group health 

plan. In response to comments, these 

final regulations do not include the 

requirement set forth in the 2013 

proposed regulations that EAP benefits 

cannot be financed by another group 

health plan in order to qualify as 

excepted benefits. 

The third requirement of the 2013 

proposed regulations and these final 

regulations for EAPs to constitute 

excepted benefits is that no employee 

premiums or contributions may be 

required as a condition of participation 

in the EAP. Finally, as with the 2013 

proposed regulations, the final 

regulations provide that an EAP that 

constitutes excepted benefits may not 

impose any cost-sharing requirements. 

C. Applicability Date and Reliance 

In the preamble to the 2013 proposed 

regulations, the Departments stated that, 

until rulemaking is finalized, through at 

least 2014, for purposes of enforcing the 

provisions of title XXVII of the PHS Act, 

part 7 of ERISA, and chapter 100 of the 

Code, the Departments will consider 

dental and vision benefits, and EAP 

benefits, meeting the conditions of the 

2013 proposed regulations to qualify as 

excepted benefits and that, to the extent 

final regulations or other guidance with 

respect to vision or dental benefits or 

EAPs is more restrictive on plans and 

issuers than the 2013 proposed 

regulations, the final regulations or 

other guidance will not be effective 

prior to January 1, 2015. These final 

regulations apply to group health plans 

and group health insurance issuers for 

plan years beginning on or after January 

1, 2015. They do not apply to health 

insurance issuers offering individual 

health insurance coverage. Until the 

applicability date of these final 

regulations, the Departments will 

consider dental and vision benefits and 

EAP benefits meeting the conditions of 

the 2013 proposed regulations or these 

final regulations to qualify as excepted 

benefits. 

III. Economic Impact and Paperwork 

Burden 

A. Summary—Department of Labor and 

Department of Health and Human 

Services 

As stated above, these final 

regulations eliminate the requirement 

under the HIPAA regulations that 

participants pay an additional premium 

or contribution for limited-scope vision 

or dental benefits to qualify as excepted 

benefits, and set forth four requirements 

for an EAP to constitute excepted 

benefits. 

B. Executive Order 12866—Department 

of Labor and Department of Health and 

Human Services 

OMB has determined that this 

regulatory action is significant within 

the meaning of section 3(f)(4) of the 

Executive Order, and the Departments 

accordingly provide the following 

assessment of its potential benefits and 

costs. The Departments expect the 

impact of these final regulations to be 

limited. 

Specifically, with respect to vision 

and dental benefits, the final regulations 

allow group health plans to offer dental 

and vision benefits to employees 

without charging a premium or 

contribution. As stated earlier in the 

preamble, this eliminates a difference 

that would otherwise exist between 

insured and self-insured coverage. With 

respect to EAPs, the final regulations 

clarify the conditions that be must be 

satisfied for such benefits to constitute 

excepted benefits, which are not subject 

to the group market requirements under 

the PHS Act, ERISA, and the Code. 

Some employers represented to the 

Departments that compliance with the 

Affordable Care Act presented 

challenges for their limited-scope vision 

and dental benefits and EAPs. The 

clarifications provided in these final 

regulations will benefit employees by 

ensuring continued access to these 

benefits. The Departments expect these 

final regulations to have some costs, but 

these costs will be limited because the 

Departments expect the primary result 

of the final regulations will be that 

employers providing limited-scope 

dental and vision and EAP benefits will 

continue to provide such benefits and 

that the number of employers who will 

begin providing such benefits for the 

first time will be small. 

C. Regulatory Flexibility Act— 

Department of Labor and Department of 

Health and Human Services 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) (RFA) imposes 

certain requirements with respect to 

Federal rules that are subject to the 

notice and comment requirements of 

section 553(b) of the Administrative 

Procedure Act (5 U.S.C. 551 et seq.) and 

that are likely to have a significant 

economic impact on a substantial 

number of small entities. Unless an 

agency certifies that a proposed rule is 

not likely to have a significant economic 

impact on a substantial number of small 

entities, section 603 of RFA requires 

that the agency present an initial 

regulatory flexibility analysis at the time 

of the publication of the notice of 

proposed rulemaking describing the 

impact of the rule on small entities and 

seeking public comment on such 

impact. Small entities include small 

businesses, organizations and 

governmental jurisdictions. 

For purposes of the RFA, the 

Departments continue to consider a 

small entity to be an employee benefit 

plan with fewer than 100 participants. 

The basis for this definition is found in 

section 104(a)(2) of the act, which 

permits the Secretary of Labor to 

prescribe simplified annual reports for 

pension plans that cover fewer than 100 

participants. Pursuant to the authority 

of section 104(a)(3), the Department of 

Labor has previously issued at 29 CFR 

2520.104–20, 2520.104–21, 2520.104– 

41, 2520.104–46 and 2520.104b–10 

certain simplified reporting provisions 

and limited exemptions from reporting 

and disclosure requirements for small 

plans, including unfunded or insured 

welfare plans covering fewer than 100 

participants and satisfying certain other 

requirements. 

Further, while some large employers 

may have small plans, in general small 

employers maintain most small plans. 

Thus, the Departments believe that 

assessing the impact of these final 

regulations on small plans is an 

appropriate substitute for evaluating the 

effect on small entities. The definition 

of small entity considered appropriate 

for this purpose differs, however, from 

a definition of small business that is 

based on size standards promulgated by 

the Small Business Administration (13 

CFR 121.201) pursuant to the Small 

Business Act (15 U.S.C. 631 et seq.). 

As noted above, the Departments 

expect the costs imposed by these 

regulations to be limited for those 

employers that provide dental, vision 

and EAP benefits, and that they will not 

affect employers who do not provide 

such benefits. The final regulations 

allow employers to decide based on 

their own costs and benefits what action 

to take. This is true for large and small 

plans alike. Accordingly, the 

Departments believe that these final 

regulations do not have a significant 

economic impact on a substantial 

number of small entities. Accordingly, 

pursuant to section 605(b) of the RFA, 

the Departments hereby certify that 

these final regulations will not have a 

significant economic impact on a 

substantial number of small entities. 


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Federal Register / Vol. 79, No. 190 / Wednesday, October 1, 2014 / Rules and Regulations 59135 

D. Special Analyses—Department of the 

Treasury 

For purposes of the Department of the 

Treasury it has been determined that 

these final regulations are not a 

significant regulatory action as defined 

in Executive Order 12866, as 

supplemented by Executive Order 

13563. Therefore, a regulatory 

assessment is not required. It has also 

been determined that section 553(b) of 

the Administrative Procedure Act (5 

U.S.C. chapter 5) does not apply to these 

final regulations, and, because these 

final regulations do not impose a 

collection of information on small 

entities, a Regulatory Flexibility 

Analysis under the Regulatory 

Flexibility Act (5 U.S.C. chapter 6) is 

not required. Pursuant to section 7805(f) 

of the Code, these final regulations have 

been submitted to the Small Business 

Administration for comment on its 

impact on small business. 

E. Unfunded Mandates Reform Act 

For purposes of the Unfunded 

Mandates Reform Act of 1995 (2 U.S.C. 

1501 et seq.), as well as Executive Order 

12875, these final regulations do not 

include any Federal mandate that may 

result in expenditures by State, local, or 

tribal governments, or the private sector, 

which may impose an annual burden of 

$100 million adjusted for inflation since 

1995. 

F. Federalism—Department of Labor 

and Department of Health and Human 

Services 

Executive Order 13132 outlines 

fundamental principles of federalism. It 

requires adherence to specific criteria by 

Federal agencies in formulating and 

implementing policies that have 

‘‘substantial direct effects’’ on the 

States, the relationship between the 

national government and States, or on 

the distribution of power and 

responsibilities among the various 

levels of government. Federal agencies 

promulgating regulations that have 

these federalism implications must 

consult with State and local officials, 

and describe the extent of their 

consultation and the nature of the 

concerns of State and local officials in 

the preamble to the final regulation. 

In the Departments’ view, the final 

regulations, by clarifying policy 

regarding certain excepted benefits 

options that can be designed by 

employers to support their employees, 

would provide more certainty to 

employers and others in the regulated 

community as well as States and 

political subdivisions regarding the 

treatment of such arrangements under 

the PHS Act, ERISA and the Code. 

Through the regular course of outreach 

the Departments normally engage in 

with officials of States (and political 

subdivisions), the Departments are 

aware of no special federalism 

implications presented by these final 

regulations. The Departments will 

continue to conduct regular outreach 

activities with States. 

G. Congressional Review Act 

These final regulations are subject to 

the Congressional Review Act 

provisions of the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (5 U.S.C. 801 et seq.), and will be 

transmitted to the Congress and to the 

Comptroller General for review in 

accordance with such provisions. 

IV. Statutory Authority 

The Department of the Treasury 

regulations are adopted pursuant to the 

authority contained in sections 7805 

and 9833 of the Code. 

The Department of Labor regulations 

are adopted pursuant to the authority 

contained in 29 U.S.C. 1027, 1059, 1135, 

1161–1168, 1169, 1181–1183, 1181 note, 

1185, 1185a, 1185b, 1191, 1191a, 1191b, 

and 1191c; sec. 101(g), Public Law 104– 

191, 110 Stat. 1936; sec. 401(b), Public 

Law 105–200, 112 Stat. 645 (42 U.S.C. 

651 note); sec. 512(d), Public Law 110– 

343, 122 Stat. 3765; Public Law 110– 

460, 122 Stat. 5123; Secretary of Labor’s 

Order 1–2011, 77 FR 1088 (January 9, 

2012). 

The Department of Health and Human 

Services regulations are adopted 

pursuant to the authority contained in 

sections 2701 through 2763, 2791, and 

2792 of the PHS Act (42 U.S.C. 300gg 

through 300gg–63, 300gg–91, and 

300gg–92), as amended. 

List of Subjects 

26 CFR Part 54 

Excise taxes, Health care, Health 

insurance, Pensions, Reporting and 

recordkeeping requirements. 

29 CFR Part 2590 

Continuation coverage, Disclosure, 

Employee benefit plans, Group health 

plans, Health care, Health insurance, 

Medical child support, Reporting and 

recordkeeping requirements. 

45 CFR Part 146 

Health care, Health insurance, 

Reporting and recordkeeping 

requirements, and State regulation of 

health insurance. 

John Dalrymple, 

Deputy Commissioner for Services and 

Enforcement, Internal Revenue Service. 

Approved: September 25, 2014. 

Mark J. Mazur, 

Assistant Secretary of the Treasury (Tax 

Policy). 

Signed this 25th day of September, 2014. 

Phyllis C. Borzi, 

Assistant Secretary, Employee Benefits 

Security Administration, Department of 

Labor. 

Dated: September 11, 2014. 

Marilyn Tavenner, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Dated: September 19, 2014. 

Sylvia Burwell, 

Secretary, Department of Health and Human 

Services. 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

Accordingly, 26 CFR part 54 is 

amended as follows: 

PART 54—PENSION EXCISE TAXES 

■ Paragraph 1. The authority citation 

for part 54 continues to read, in part, as 

follows: 

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

Section 54.9831–1 is also issued under 26 

U.S.C. 9833; * * * 

■ Par. 2. Section 54.9831–1 is amended 

by revising paragraphs (c)(3)(i) and 

(c)(3)(ii), and adding paragraph 

(c)(3)(vi), to read as follows: 

§ 54.9831–1 Special rules relating to group 

health plans. 

* * * * * 

(c) * * * 

(3) * * * 

(i) In general. Limited-scope dental 

benefits, limited-scope vision benefits, 

or long-term care benefits are excepted 

if they are provided under a separate 

policy, certificate, or contract of 

insurance, or are otherwise not an 

integral part of a group health plan as 

described in paragraph (c)(3)(ii) of this 

section. In addition, benefits provided 

under a health flexible spending 

arrangement are excepted benefits if 

they satisfy the requirements of 

paragraph (c)(3)(v) of this section. 

Furthermore, benefits provided under 

an employee assistance program are 

excepted benefits if they satisfy the 

requirements of paragraph (c)(3)(vi) of 

this section. 

(ii) Not an integral part of a group 

health plan. For purposes of this 


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paragraph (c)(3), benefits are not an 

integral part of a group health plan 

(whether the benefits are provided 

through the same plan, a separate plan, 

or as the only plan offered to 

participants) if either paragraph 

(c)(3)(ii)(A) or (B) are satisfied. 

(A) Participants may decline coverage. 

For example, a participant may decline 

coverage if the participant can opt out 

of the coverage upon request, whether 

or not there is a participant contribution 

required for the coverage. 

(B) Claims for the benefits are 

administered under a contract separate 

from claims administration for any other 

benefits under the plan. 

* * * * * 

(vi) Employee assistance programs. 

Benefits provided under employee 

assistance programs are excepted if they 

satisfy all of the requirements of this 

paragraph (c)(3)(vi). 

(A) The program does not provide 

significant benefits in the nature of 

medical care. For this purpose, the 

amount, scope and duration of covered 

services are taken into account. 

(B) The benefits under the employee 

assistance program are not coordinated 

with benefits under another group 

health plan, as follows: 

(1) Participants in the other group 

health plan must not be required to use 

and exhaust benefits under the 

employee assistance program (making 

the employee assistance program a 

gatekeeper) before an individual is 

eligible for benefits under the other 

group health plan; and 

(2) Participant eligibility for benefits 

under the employee assistance program 

must not be dependent on participation 

in another group health plan. 

(C) No employee premiums or 

contributions are required as a 

condition of participation in the 

employee assistance program. 

(D) There is no cost sharing under the 

employee assistance program. 

* * * * * 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

For the reasons stated in the 

preamble, the Department of Labor 

amends 29 CFR part 2590 as follows: 

PART 2590—RULES AND 

REGULATIONS FOR GROUP HEALTH 

PLANS 

■ 3. The authority citation for part 2590 

is revised to read as follows: 

Authority: 29 U.S.C. 1027, 1059, 1135, 

1161–1168, 1169, 1181–1183, 1181 note, 

1185, 1185a, 1185b, 1185d, 1191, 1191a, 

1191b, and 1191c; sec. 101(g), Pub. L. 104– 

191, 110 Stat. 1936; sec. 401(b), Pub. L. 105– 

200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 

12(d), Pub. L. 110–343, 122 Stat. 3881; sec. 

1001, 1201, and 1562(e), Pub. L. 111–148, 

124 Stat. 119, as amended by Pub. L. 111– 

52, 124 Stat. 1029; Secretary of Labor’s Order 

1–2011, 77 FR 1088 (January 9, 2012). 

■ 4. Section 2590.732 is amended by 

revising paragraphs (c)(3)(i) and 

(c)(3)(ii), and adding paragraph 

(c)(3)(vi), to read as follows: 

§ 2590.732 Special rules relating to group 

health plans. 

* * * * * 

(c) * * * 

(3) * * * 

(i) In general. Limited-scope dental 

benefits, limited-scope vision benefits, 

or long-term care benefits are excepted 

if they are provided under a separate 

policy, certificate, or contract of 

insurance, or are otherwise not an 

integral part of a group health plan as 

described in paragraph (c)(3)(ii) of this 

section. In addition, benefits provided 

under a health flexible spending 

arrangement are excepted benefits if 

they satisfy the requirements of 

paragraph (c)(3)(v) of this section. 

Furthermore, benefits provided under 

an employee assistance program are 

excepted benefits if they satisfy the 

requirements of paragraph (c)(3)(vi) of 

this section. 

(ii) Not an integral part of a group 

health plan. For purposes of this 

paragraph (c)(3), benefits are not an 

integral part of a group health plan 

(whether the benefits are provided 

through the same plan, a separate plan, 

or as the only plan offered to 

participants) if either paragraph 

(c)(3)(ii)(A) or (B) are satisfied. 

(A) Participants may decline coverage. 

For example, a participant may decline 

coverage if the participant can opt out 

of the coverage upon request, whether 

or not there is a participant contribution 

required for the coverage. 

(B) Claims for the benefits are 

administered under a contract separate 

from claims administration for any other 

benefits under the plan. 

* * * * * 

(vi) Employee assistance programs. 

Benefits provided under employee 

assistance programs are excepted if they 

satisfy all of the requirements of this 

paragraph (c)(3)(vi). 

(A) The program does not provide 

significant benefits in the nature of 

medical care. For this purpose, the 

amount, scope and duration of covered 

services are taken into account. 

(B) The benefits under the employee 

assistance program are not coordinated 

with benefits under another group 

health plan, as follows: 

(1) Participants in the other group 

health plan must not be required to use 

and exhaust benefits under the 

employee assistance program (making 

the employee assistance program a 

gatekeeper) before an individual is 

eligible for benefits under the other 

group health plan; and 

(2) Participant eligibility for benefits 

under the employee assistance program 

must not be dependent on participation 

in another group health plan. 

(C) No employee premiums or 

contributions are required as a 

condition of participation in the 

employee assistance program. 

(D) There is no cost sharing under the 

employee assistance program. 

* * * * * 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Subtitle A 

For the reasons stated in the 

preamble, the Department of Health and 

Human Services amends 45 CFR part 

146 as set forth below: 

PART 146—REQUIREMENTS FOR THE 

GROUP HEALTH INSURANCE 

MARKET 

■ 5. The authority citation for part 146 

continues to read as follows: 

Authority: Secs. 2702 through 2705, 2711 

through 2723, 2791, and 2792 of the PHS Act 

(42 U.S.C. 300gg–1 through 300gg–5, 300gg– 

11 through 300gg–23, 300gg–91, and 300gg– 

92). 

■ 6. Section 146.145 is amended by 

revising paragraphs (b)(3)(i) and 

(b)(3)(ii), and adding paragraph 

(b)(3)(vi), to read as follows: 

§ 146.145 Special rules relating to group 

health plans. 

* * * * * 

(b) * * * 

(3) * * * 

(i) In general. Limited-scope dental 

benefits, limited-scope vision benefits, 

or long-term care benefits are excepted 

if they are provided under a separate 

policy, certificate, or contract of 

insurance, or are otherwise not an 

integral part of a group health plan as 

described in paragraph (b)(3)(ii) of this 

section. In addition, benefits provided 

under a health flexible spending 

arrangement are excepted benefits if 

they satisfy the requirements of 

paragraph (b)(3)(v) of this section. 

Furthermore, benefits provided under 

an employee assistance program are 

excepted benefits if they satisfy the 

requirements of paragraph (b)(3)(vi) of 

this section. 

(ii) Not an integral part of a group 

health plan. For purposes of this 


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paragraph (b)(3), benefits are not an 

integral part of a group health plan 

(whether the benefits are provided 

through the same plan, a separate plan, 

or as the only plan offered to 

participants) if either paragraph 

(b)(3)(ii)(A) or (B) are satisfied. 

(A) Participants may decline coverage. 

For example, a participant may decline 

coverage if the participant can opt out 

of the coverage upon request, whether 

or not there is a participant contribution 

required for the coverage. 

(B) Claims for the benefits are 

administered under a contract separate 

from claims administration for any other 

benefits under the plan. 

* * * * * 

(vi) Employee assistance programs. 

Benefits provided under employee 

assistance programs are excepted if they 

satisfy all of the requirements of this 

paragraph (b)(3)(vi). 

(A) The program does not provide 

significant benefits in the nature of 

medical care. For this purpose, the 

amount, scope and duration of covered 

services are taken into account. 

(B) The benefits under the employee 

assistance program are not coordinated 

with benefits under another group 

health plan, as follows: 

(1) Participants in the other group 

health plan must not be required to use 

and exhaust benefits under the 

employee assistance program (making 

the employee assistance program a 

gatekeeper) before an individual is 

eligible for benefits under the other 

group health plan; and 

(2) Participant eligibility for benefits 

under the employee assistance program 

must not be dependent on participation 

in another group health plan. 

(C) No employee premiums or 

contributions are required as a 

condition of participation in the 

employee assistance program. 

(D) There is no cost sharing under the 

employee assistance program. 

* * * * * 

[FR Doc. 2014–23323 Filed 9–26–14; 4:15 pm] 

BILLING CODE 4150–28–P; 4830–01–P; 4510–29–P] 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Parts 147 and 155 

[CMS–9949–F2] 

RIN 0938–AS02 

Patient Protection and Affordable Care 

Act; Exchange and Insurance Market 

Standards for 2015 and Beyond; 

Correcting Amendment 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule; correcting 

amendment. 

SUMMARY: In the May 27, 2014 issue of 

the Federal Register (79 FR 30240), we 

published a final rule which addressed 

various requirements applicable to 

health insurance issuers, Affordable 

Insurance Exchanges (‘‘Exchanges’’), 

Navigators, non-Navigator assistance 

personnel, and other entities under the 

Patient Protection and Affordable Care 

Act and the Health Care and Education 

Reconciliation Act of 2010 (collectively 

referred to as the Affordable Care Act). 

The effective date of the rule was July 

28, 2014, except for amendments to 45 

CFR 155.705, which were effective May 

27, 2014. This correcting amendment 

corrects a limited number of technical 

and typographical errors identified in 

the ‘‘Patient Protection and Affordable 

Care Act; Exchange and Insurance 

Market Standards for 2015 and Beyond’’ 

final rule. 

DATES: Effective Date: This correcting 

amendment is effective on October 1, 

2014. 

FOR FURTHER INFORMATION CONTACT: 

Jacob Ackerman, (301) 492–4179. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Patient Protection and Affordable 

Care Act; Exchange and Insurance 

Market Standards for 2015 and Beyond 

final rule (the ‘‘Final Rule’’), which 

appeared in the May 27, 2014 Federal 

Register (79 FR 30240), contained a 

number of technical and typographical 

errors. Therefore, on July 24, 2014, we 

published a correction notice in the 

Federal Register (79 FR 42984), to 

correct some of those errors. The 

provisions of the correction notice were 

effective as if they had been included in 

the May 27, 2014 final rule. 

Accordingly, those corrections were 

effective July 28, 2014. 

We have identified additional 

technical and typographical errors that 

appeared in the May 27, 2014 Federal 

Register. Therefore, we are publishing 

an additional correcting document to 

correct these errors. The provisions of 

this correcting document are effective 

October 1, 2014. 

II. Summary of Errors in the 

Regulations Text 

On page 30339, we amended the 

structure of § 147.104(b)(1)(i), removed 

duplicate regulatory text regarding the 

Small Business Health Options Program 

(SHOP), and made other minor 

revisions. However, when amending 

paragraph (b)(1)(i)(B) to remove 

duplicate regulatory text, we 

inadvertently cross referenced the 

incorrect regulatory section. The 

regulation should have referenced the 

SHOP group participation rules at 

§ 156.285(e), not § 156.1250(c). We are 

correcting this error in this correcting 

document. 

On page 30348, at § 155.420, we 

added a new paragraph (b)(2)(iv) to 

establish coverage effective dates for 

plan selections made during a special 

enrollment period, clarifying a 

consumer’s ability to select a plan 60 

days before and after a loss of coverage. 

However, we inadvertently omitted the 

amendatory instruction in the 

regulations text for adding this 

paragraph. As a result, this paragraph 

was published in the May 27, 2014 

Federal Register but was not codified in 

the Code of Federal Regulations. We 

also published a subsequent correction 

notice amending language to this 

paragraph on July 24, 2014 (79 FR 

42984). However, because the original 

text had not been codified, the change 

to this paragraph could not be codified. 

We are correcting this oversight. 

Specifically, we are adding a new 

(b)(2)(iv), which reflects the original 

language we intended to codify in the 

Federal Register as would have been 

modified by the July 24, 2014 correction 

notice. 

On page 30350, at § 155.705(b)(3), we 

describe options with respect to 

employee choice requirements in the 

Small Business Health Options Program 

(SHOP). We are removing the comma 

after the word ‘‘may’’ in 

§ 155.705(b)(3)(vi) to read, ‘‘For plan 

years beginning in 2015 only, the SHOP 

may elect. . . .’’ This was a 

typographical error that should be made 

for grammatical correctness. 

III. Waiver of Proposed Rulemaking 

and Delay in Effective Date 

We ordinarily publish a notice of 

proposed rulemaking in the Federal 

Register to provide a period for public 

comment before the provisions of a rule 

take effect, in accordance with section 

553(b) of the Administrative Procedure 

Act (APA) (5 U.S.C. 553(b)), and section 


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