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Final Regulations on HIPAA Portability for Group Health Plans Contain Few Changes

On December 30, 2004, the Departments of Treasury, Labor, and Health and Human Services published the final regulations regarding health coverage portability requirements under the Health Insurance Portability and Accountability Act of 1996. These final regulations replace the interim final regulations issued on April 1, 1997, and later clarified on December 29, 1997. The final regulations clarify some issues relating to health coverage portability, such as applying preexisting condition exclusions and counting creditable coverage. They also provide sample and model language to satisfy certain notice requirements. However, they do not fundamentally change the regime put in place by the April 1997 interim rules.

Application Date: The final regulations apply to group health plans for plan years beginning on or after July 1, 2005. Thus, for a plan with a calendar year as its plan year, the final regulations apply as of January 1, 2006.

The final regulations include clarifications to some provisions of the interim rules, including:

• Revision, addition and restructuring of certain defined terms. For example, the final regulations add a definition for "dependent" and clarify that if an individual receiving benefits under a plan changes benefit package options, or if the plan changes group health insurance issuers, the individual's enrollment date remains the same.
• Clarification and sample/model language for certain notice requirements, including a revised model Certificate of Creditable Coverage, which will now include an "education statement" describing a participant's rights under HIPAA portability provisions.
• Clarification of the rules regarding the issuance of Certificates of Creditable Coverage and special enrollment periods with respect to loss of eligibility, lifetime benefit limits and other issues.

Along with the final regulations, the Departments also issued proposed regulations dealing with certain other HIPAA issues. For example, the proposed regulations would toll the period during which a significant break in coverage has occurred and where a Certificate of Creditable Coverage is not provided on or before the date coverage ceases. Also, the proposed regulations provide guidance regarding the interaction of the HIPAA portability rules with the federal Family and Medical Leave Act.

The Jackson Lewis Benefits Group is preparing a more detailed analysis of the rules and which will be available at www.jacksonlewis.com. In the meantime, if you have any specific questions regarding the HIPAA rules and requirements, how they may affect your group health plan, or other employee benefits issues, please contact the Jackson Lewis attorney with whom you regularly work, or Joseph Lazzarotti.