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A nonfederal government employer that provides self-funded group health plan coverage to its employees (coverage that is not provided through an insurer) may elect to exempt its plan from (opt out of) the requirements of Title XXVII of the Public Health Service (PHS) Act, with the exception of requirements pertaining to the certification and disclosure of an individual's creditable coverage under the plan. Title XXVII was added to the PHS Act by Title I of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and has been amended by the Newborns' and Mothers' Health Protection Act of 1996, the Mental Health Parity Act of 1996, and the Women's Health and Cancer Rights Act of 1998. Sponsors of nonfederal governmental plans are permitted to exempt their self-funded plans from requirements of Title XXVII by Section 2721(b)(2) of the PHS Act (42 U.S.C. 300gg-21(b)(2). (See the link in the Downloads Section below.) This section is intended to provide information about Section 2721(b)(2). The information in this section will be of interest to state and local government employers that provide self-funded group health plan coverage to their employees, administrators of those group health plans and employees and dependents who are enrolled, or may enroll, in those plans. We wish to emphasize that the applicability of Section 2721(b)(2) is very limited; it applies only to self-funded nonfederal governmental plans. It does not apply to either insured or self-funded plans of employers that are not government employers, or to insured plans of government employers. Also, Section 2721(b)(2) provides no authority for sponsors of self-funded, nonfederal governmental plans to exempt their plans from any applicable standards or requirements, related to the transmission, privacy, and security of certain health information, that may be established under 42 U.S.C. §1320d, et seq. (the Administrative Simplification provisions added by Title II of HIPAA). However, depending on the size of the nonfederal governmental plan, and how it is administered, it might not meet the definition of a group health plan under 42 U.S.C. §1320d(5)(A), and therefore might not be subject to the Administrative Simplification provisions.
Page Last Modified: 02/07/2008 4:29:31 PM
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