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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 most of the requirements of Title XXVII of the Public Health Service (PHS) Act. 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, the Women's Health and Cancer Rights Act of 1998, the Genetic Information Nondiscrimination Act of 2008 (GINA), the Mental Health Parity and Addiction Equity Act of 2008, Michelle's Law (2008) and the Children's Health Insurance Program Reauthorization Act of 2009. The requirements of those statutes (other than GINA) are summarized in the "Model Notice to Enrollees in a Self-Funded Nonfederal Governmental Group Health Plan". (See the link in the Downloads Section at the bottom of the Procedures & Requirements page.) With the exception of requirements pertaining to the certification and disclosure of an individual's creditable coverage under the plan, and GINA requirements (which amend section 2702 to prohibit discrimination based on genetic information and apply to group health plans for plan years beginning after May 21, 2009), sponsors of self-funded nonfederal governmental plans are permitted to exempt those plans from requirements of Title XXVII by Section 2721(b)(2) of the PHS Act (42 USC 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. 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 fully insured or self-funded plans of employers that are not government employers, or to fully insured plans of government employers. Note that group health plan coverage provided to employees and their dependents by a particular nonfederal government employer may be through a self-funded umbrella plan, such as a municipal league plan, that has filed a title XXVII exemption election with CMS. Individuals who are considering employment with a nonfederal government employer may wish to inquire of the employer whether its group health plan is self-funded and, if so, whether the employer has elected to exempt its plan from any requirements of title XXVII of the PHS Act. 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 USC §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 USC §1320d(5)(A), and therefore might not be subject to the Administrative Simplification provisions.
Page Last Modified: 07/14/2009 10:15:13 AM
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