29 CFR Part 2590 — Rules and Regulations for Group Health Plans

PART 2590—RULES AND REGULATIONS FOR GROUP HEALTH PLANS Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-1183, 1181 note, 1185, 1185a-n, 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. 512(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. 111-152, 124 Stat. 1029; Division M, Pub. L. 113-235, 128 Stat. 2130; Pub. L. 116-260, 134 Stat. 1182; Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9, 2012). Source: 62 FR 16941, Apr. 8, 1997, unless otherwise noted. Subpart A—Continuation Coverage, Qualified Medical Child Support Orders, Coverage for Adopted Children § 2590.606-1 General notice of continuation coverage. (a) General. (b) Timing of notice. (i) The date that is 90 days after the date on which such individual's coverage under the plan commences, or, if later, the date that is 90 days after the date on which the plan first becomes subject to the continuation coverage requirements; or (ii) The first date on which the administrator is required, pursuant to § 2590.606-4(b), to furnish the covered employee, spouse, or dependent child of such employee notice of a qualified beneficiary's right to elect continuation coverage. (2) A notice that is furnished in accordance with paragraph (b)(1) of this section shall, for purposes of section 606(a)(1) of the Act, be deemed to be provided at the time of commencement of coverage under the plan. (3) In any case in which an administrator is required to furnish a notice to a covered employee or spouse pursuant to paragraph (b)(1)(ii) of this section, the furnishing of a notice to such individual in accordance with § 2590.606-4(b) shall be deemed to satisfy the requirements of this section. (c) Content of notice. (1) The name of the plan under which continuation coverage is available, and the name, address and telephone number of a party or parties from whom additional information about the plan and continuation coverage can be obtained; (2) A general description of the continuation coverage under the plan, including identification of the classes of individuals who may become qualified beneficiaries, the types of qualifying events that may give rise to the right to continuation coverage, the obligation of the employer to notify the plan administrator of the occurrence of certain qualifying events, the maximum period for which continuation coverage may be available, when and under what circumstances continuation coverage may be extended beyond the applicable maximum period, and the plan's requirements applicable to the payment of premiums for continuation coverage; (3) An explanation of the plan's requirements regarding the responsibility of a qualified beneficiary to notify the administrator of a qualifying event that is a divorce, legal separation, or a child's ceasing to be a dependent under the terms of the plan, and a description of the plan's procedures for providing such notice; (4) An explanation of the plan's requirements regarding the responsibility of qualified beneficiaries who are receiving continuation coverage to provide notice to the administrator of a determination by the Social Security Administration, under title II or XVI of the Social Security Act (42 U.S.C. 401 et seq. et seq. (5) An explanation of the importance of keeping the administrator informed of the current addresses of all participants or beneficiaries under the plan who are or may become qualified beneficiaries; and (6) A statement that the notice does not fully describe continuation coverage or other rights under the plan and that more complete information regarding such rights is available from the plan administrator and in the plan's SPD. (d) Single notice rule. (e) Notice in summary plan description. (f) Delivery of notice. (g) Model notice. (h) Applicability. [69 FR 30097, May 26, 2004; 69 FR 34921, June 23, 2004] § 2590.606-2 Notice requirement for employers. (a) General. (b) Timing of notice. (1) In the case of a plan that provides, with respect to a qualifying event, pursuant to section 607(5) of the Act, that continuation coverage and the applicable period for providing notice under section 606(a)(2) of the Act shall commence on the date of loss of coverage, not later than 30 days after the date on which a qualified beneficiary loses coverage under the plan due to the qualifying event; (2) In the case of a multiemployer plan that provides, pursuant to section 606(a)(2) of the Act, for a longer period of time within which employers may provide notice of a qualifying event, not later than the end of the period provided pursuant to the plan's terms for such notice; and (3) In all other cases, not later than 30 days after the date on which the qualifying event occurred. (c) Content of notice. (d) Multiemployer plan special rules. (e) Applicability. [69 FR 30097, May 26, 2004] § 2590.606-3 Notice requirements for covered employees and qualified beneficiaries. (a) General. (1) Notice of the occurrence of a qualifying event that is a divorce or legal separation of a covered employee from his or her spouse; (2) Notice of the occurrence of a qualifying event that is a beneficiary's ceasing to be covered under a plan as a dependent child of a participant; (3) Notice of the occurrence of a second qualifying event after a qualified beneficiary has become entitled to continuation coverage with a maximum duration of 18 (or 29) months; (4) Notice that a qualified beneficiary entitled to receive continuation coverage with a maximum duration of 18 months has been determined by the Social Security Administration, under title II or XVI of the Social Security Act (42 U.S.C. 401 et seq. et seq. (5) Notice that a qualified beneficiary, with respect to whom a notice described in paragraph (a)(4) of this section has been provided, has subsequently been determined by the Social Security Administration, under title II or XVI of the SSA to no longer be disabled. (b) Reasonable procedures. (2) For purposes of this section, a plan's notice procedures shall be deemed reasonable only if such procedures: (i) Are described in the plan's summary plan description required by § 2520.102-3 of this chapter; (ii) Specify the individual or entity designated to receive such notices; (iii) Specify the means by which notice may be given; (iv) Describe the information concerning the qualifying event or determination of disability that the plan deems necessary in order to provide continuation coverage rights consistent with the requirements of the Act; and (v) Comply with the requirements of paragraphs (c), (d), and (e) of this section. (3) A plan's procedures will not fail to be reasonable, pursuant to this section, solely because the procedures require a covered employee or qualified beneficiary to utilize a specific form to provide notice to the administrator, provided that any such form is easily available, without cost, to covered employees and qualified beneficiaries. (4) If a plan has not established reasonable procedures for providing a notice required by this section, such notice shall be deemed to have been provided when a written or oral communication identifying a specific event is made in a manner reasonably calculated to bring the information to the attention of any of the following: (i) In the case of a single-employer plan, the person or organizational unit that customarily handles employee benefits matters of the employer; (ii) In the case of a plan to which more than one unaffiliated employer contributes, or which is established or maintained by an employee organization, either the joint board, association, committee, or other similar group (or any member of any such group) administering the plan, or the person or organizational unit to which claims for benefits under the plan customarily are referred; or (iii) In the case of a plan the benefits of which are provided or administered by an insurance company, insurance service, or other similar organization subject to regulation under the insurance laws of one or more States, the person or organizational unit that customarily handles claims for benefits under the plan or any officer of the insurance company, insurance service, or other similar organization. (c) Periods of time for providing notice. (1) Time limits for notices of qualifying events. (i) The date on which the relevant qualifying event occurs; (ii) The date on which the qualified beneficiary loses (or would lose) coverage under the plan as a result of the qualifying event; or (iii) The date on which the qualified beneficiary is informed, through the furnishing of the plan's summary plan description or the notice described in § 2590.606-1, of both the responsibility to provide the notice and the plan's procedures for providing such notice to the administrator. (2) Time limits for notice of disability determination. (A) The date of the disability determination by the Social Security Administration; (B) The date on which a qualifying event occurs; (C) The date on which the qualified beneficiary loses (or would lose) coverage under the plan as a result of the qualifying event; or (D) The date on which the qualified beneficiary is informed, through the furnishing of the summary plan description or the notice described in § 2590.606-1, of both the responsibility to provide the notice and the plan's procedures for providing such notice to the administrator. (ii) Notwithstanding paragraph (c)(2)(i) of this section, a plan may require the notice described in paragraph (a)(4) of this section to be furnished before the end of the first 18 months of continuation coverage. (3) Time limits for notice of change in disability status. (i) The date of the final determination by the Social Security Administration, under title II or XVI of the SSA, that the qualified beneficiary is no longer disabled; or (ii) The date on which the qualified beneficiary is informed, through the furnishing of the plan's summary plan description or the notice described in § 2590.606-1, of both the responsibility to provide the notice and the plan's procedures for providing such notice to the administrator. (d) Required contents of notice. (2) An administrator may require a notice that does not contain all of the information required by the plan to be supplemented with the additional information necessary to meet the plan's reasonable content requirements for such notice in order for the notice to be deemed to have been provided in accordance with this section. (e) Who may provide notice. (f) Plan provisions. (g) Additional rights to continuation coverage. (h) Applicability. [69 FR 30097, May 26, 2004] § 2590.606-4 Notice requirements for plan administrators. (a) General. (b) Notice of right to elect continuation coverage. (2) In the case of a plan with respect to which an employer of a covered employee is also the administrator of the plan, except as provided in paragraph (b)(3) of this section, if the employer is otherwise required to furnish a notice of a qualifying event to an administrator pursuant to § 2590.606-2, the administrator shall furnish to each qualified beneficiary a notice meeting the requirements of paragraph (b)(4) of this section not later than 44 days after: (i) In the case of a plan that provides, with respect to the qualifying event, that continuation coverage and the applicable period for providing notice under section 606(a)(2) of the Act shall commence with the date of loss of coverage, the date on which a qualified beneficiary loses coverage under the plan due to the qualifying event; or (ii) In all other cases, the date on which the qualifying event occurred. (3) In the case of a plan that is a multiemployer plan, a notice meeting the requirements of paragraph (b)(4) of this section shall be furnished not later than the later of: (i) The end of the time period provided in paragraph (b)(1) of this section; or (ii) The end of the time period provided in the terms of the plan for such purpose. (4) The notice required by this paragraph (b) shall be written in a manner calculated to be understood by the average plan participant and shall contain the following information: (i) The name of the plan under which continuation coverage is available; and the name, address and telephone number of the party responsible under the plan for the administration of continuation coverage benefits; (ii) Identification of the qualifying event; (iii) Identification, by status or name, of the qualified beneficiaries who are recognized by the plan as being entitled to elect continuation coverage with respect to the qualifying event, and the date on which coverage under the plan will terminate (or has terminated) unless continuation coverage is elected; (iv) A statement that each individual who is a qualified beneficiary with respect to the qualifying event has an independent right to elect continuation coverage, that a covered employee or a qualified beneficiary who is the spouse of the covered employee (or was the spouse of the covered employee on the day before the qualifying event occurred) may elect continuation coverage on behalf of all other qualified beneficiaries with respect to the qualifying event, and that a parent or legal guardian may elect continuation coverage on behalf of a minor child; (v) An explanation of the plan's procedures for electing continuation coverage, including an explanation of the time period during which the election must be made, and the date by which the election must be made; (vi) An explanation of the consequences of failing to elect or waiving continuation coverage, including an explanation that a qualified beneficiary's decision whether to elect continuation coverage will affect the future rights of qualified beneficiaries to portability of group health coverage, guaranteed access to individual health coverage, and special enrollment under part 7 of title I of the Act, with a reference to where a qualified beneficiary may obtain additional information about such rights; and a description of the plan's procedures for revoking a waiver of the right to continuation coverage before the date by which the election must be made; (vii) A description of the continuation coverage that will be made available under the plan, if elected, including the date on which such coverage will commence, either by providing a description of the coverage or by reference to the plan's summary plan description; (viii) An explanation of the maximum period for which continuation coverage will be available under the plan, if elected; an explanation of the continuation coverage termination date; and an explanation of any events that might cause continuation coverage to be terminated earlier than the end of the maximum period; (ix) A description of the circumstances (if any) under which the maximum period of continuation coverage may be extended due either to the occurrence of a second qualifying event or a determination by the Social Security Administration, under title II or XVI of the Social Security Act (42 U.S.C. 401 et seq. et seq. (x) In the case of a notice that offers continuation coverage with a maximum duration of less than 36 months, a description of the plan's requirements regarding the responsibility of qualified beneficiaries to provide notice of a second qualifying event and notice of a disability determination under the SSA, along with a description of the plan's procedures for providing such notices, including the times within which such notices must be provided and the consequences of failing to provide such notices. The notice shall also explain the responsibility of qualified beneficiaries to provide notice that a disabled qualified beneficiary has subsequently been determined to no longer be disabled; (xi) A description of the amount, if any, that each qualified beneficiary will be required to pay for continuation coverage; (xii) A description of the due dates for payments, the qualified beneficiaries' right to pay on a monthly basis, the grace periods for payment, the address to which payments should be sent, and the consequences of delayed payment and non-payment; (xiii) An explanation of the importance of keeping the administrator informed of the current addresses of all participants or beneficiaries under the plan who are or may become qualified beneficiaries; and (xiv) A statement that the notice does not fully describe continuation coverage or other rights under the plan, and that more complete information regarding such rights is available in the plan's summary plan description or from the plan administrator. (c) Notice of unavailability of continuation coverage. (2) The notice required by this paragraph (c) shall be written in a manner calculated to be understood by the average plan participant and shall be furnished by the administrator in accordance with the time frame set out in paragraph (b) of this section that would apply if the administrator received a notice of qualifying event and determined that the individual was entitled to continuation coverage. (d) Notice of termination of continuation coverage. (2) The notice required by this paragraph (d) shall be written in a manner calculated to be understood by the average plan participant and shall contain the following information: (i) The reason that continuation coverage has terminated earlier than the end of the maximum period of continuation coverage applicable to such qualifying event; (ii) The date of termination of continuation coverage; and (iii) Any rights the qualified beneficiary may have under the plan or under applicable law to elect an alternative group or individual coverage, such as a conversion right. (3) The notice required by this paragraph (d) shall be furnished by the administrator as soon as practicable following the administrator's determination that continuation coverage shall terminate. (e) Special notice rules. (1) An administrator may provide notice to a covered employee and the covered employee's spouse by furnishing a single notice addressed to both the covered employee and the covered employee's spouse, if, on the basis of the most recent information available to the plan, the covered employee's spouse resides at the same location as the covered employee; and (2) An administrator may provide notice to each qualified beneficiary who is the dependent child of a covered employee by furnishing a single notice to the covered employee or the covered employee's spouse, if, on the basis of the most recent information available to the plan, the dependent child resides at the same location as the individual to whom such notice is provided. (f) Delivery of notice. (g) Model notice. (h) Applicability. [69 FR 30097, May 26, 2004; 69 FR 34921, June 23, 2004] § 2590.609-1 [Reserved] § 2590.609-2 National Medical Support Notice. (a) This section promulgates the National Medical Support Notice (the Notice), as mandated by section 401(b) of the Child Support Performance and Incentive Act of 1998 (Pub. L. 105-200). If the Notice is appropriately completed and satisfies paragraphs (3) and (4) of section 609(a) of the Employee Retirement Income Security Act (ERISA), the Notice is deemed to be a qualified medical child support order (QMCSO) pursuant to ERISA section 609(a)(5)(C). Section 609(a) of ERISA delineates the rights and obligations of the alternate recipient (child), the participant, and the group health plan under a QMCSO. A copy of the Notice is available on the Internet at http://www.dol.gov/ebsa. (b) For purposes of this section, a plan administrator shall find that a Notice is appropriately completed if it contains the name of an Issuing Agency, the name and mailing address (if any) of an employee who is a participant under the plan, the name and mailing address of one or more alternate recipient(s) (child(ren) of the participant) (or the name and address of a substituted official or agency which has been substituted for the mailing address of the alternate recipient(s)), and identifies an underlying child support order. (c)(1) Under section 609(a)(3)(A) of ERISA, in order to be qualified, a medical child support order must clearly specify the name and the last known mailing address (if any) of the participant and the name and mailing address of each alternate recipient covered by the order, except that, to the extent provided in the order, the name and mailing address of an official of a State or a political subdivision thereof may be substituted for the mailing address of any such alternate recipient. Section 609(a)(3)(B) of ERISA requires a reasonable description of the type of coverage to be provided to each such alternate recipient, or the manner in which such type of coverage is to be determined. Section 609(a)(3)(C) of ERISA requires that the order specify the period to which such order applies. (2) The Notice satisfies ERISA section 609(a)(3)(A) by including the necessary identifying information described in § 2590.609-2(b). (3) The Notice satisfies ERISA section 609(a)(3)(B) by having the Issuing Agency identify either the specific type of coverage or all available group health coverage. If an employer receives a Notice that does not designate either specific type(s) of coverage or all available coverage, the employer and plan administrator should assume that all are designated. The Notice further satisfies ERISA section 609(a)(3)(B) by instructing the plan administrator that if a group health plan has multiple options and the participant is not enrolled, the Issuing Agency will make a selection after the Notice is qualified, and, if the Issuing Agency does not respond within 20 days, the child will be enrolled under the plan's default option (if any). (4) Section 609(a)(3)(C) of ERISA is satisfied because the Notice specifies that the period of coverage may only end for the alternate recipient(s) when similarly situated dependents are no longer eligible for coverage under the terms of the plan, or upon the occurrence of certain specified events. (d)(1) Under ERISA section 609(a)(4), a qualified medical child support order may not require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan, except to the extent necessary to meet the requirements of a law relating to medical child support described in section 1908 of the Social Security Act, 42 U.S.C. 1396g-1. (2) The Notice satisfies the conditions of ERISA section 609(a)(4) because it requires the plan to provide to an alternate recipient only those benefits that the plan provides to any dependent of a participant who is enrolled in the plan, and any other benefits that are necessary to meet the requirements of a State law described in such section 1908. (e) For the purposes of this section, an “Issuing Agency” is a State agency that administers the child support enforcement program under Part D of Title IV of the Social Security Act. [65 FR 82142, Dec. 27, 2000] Subpart B—Health Coverage Portability, Nondiscrimination, and Renewability Source: 62 FR 16941, Apr. 8, 1997, unless otherwise noted. Redesignated at 65 FR 82142, Dec. 27, 2000. § 2590.701-1 Basis and scope. (a) Statutory basis. (b) Scope. [69 FR 78763, Dec. 30, 2004, as amended at 74 FR 51683, Oct. 7, 2009; 79 FR 10308, Feb. 24, 2014] § 2590.701-2 Definitions. Unless otherwise provided, the definitions in this section govern in applying the provisions of §§ 2590.701 through 2590.734. Affiliation period COBRA (1) COBRA (2) COBRA continuation coverage (3) COBRA continuation provision (4) Exhaustion of COBRA continuation coverage (i) Due to the failure of the employer or other responsible entity to remit premiums on a timely basis; (ii) When the individual no longer resides, lives, or works in the service area of an HMO or similar program (whether or not within the choice of the individual) and there is no other COBRA continuation coverage available to the individual; or (iii) When the individual incurs a claim that would meet or exceed a lifetime limit on all benefits and there is no other COBRA continuation coverage available to the individual. Condition medical condition. Creditable coverage creditable coverage Dependent Enroll Enrollment date Excepted benefits First day of coverage Genetic information Group health insurance coverage Group health plan plan group health plan Group market individual market Health insurance coverage Health insurance issuer issuer Health maintenance organization HMO (1) A federally qualified health maintenance organization (as defined in section 1301(a) of the PHS Act); (2) An organization recognized under State law as a health maintenance organization; or (3) A similar organization regulated under State law for solvency in the same manner and to the same extent as such a health maintenance organization. Individual health insurance coverage Individual market Internal Revenue Code Issuer health insurance issuer. Late enrollee Late enrollment Medical care (1) The diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body; (2) Transportation primarily for and essential to medical care referred to in paragraph (1) of this definition; and (3) Insurance covering medical care referred to in paragraphs (1) and (2) of this definition. Medical condition condition Participant participant Placement, or being placed, for adoption Plan year (1) The deductible or limit year used under the plan; (2) If the plan does not impose deductibles or limits on a yearly basis, then the plan year is the policy year; (3) If the plan does not impose deductibles or limits on a yearly basis, and either the plan is not insured or the insurance policy is not renewed on an annual basis, then the plan year is the employer's taxable year; or (4) In any other case, the plan year is the calendar year. Preexisting condition exclusion Public health plan public health plan Public Health Service Act (PHS Act) et seq. Short-term, limited-duration insurance (1) Short-term, limited-duration insurance (i) Has an expiration date specified in the policy, certificate, or contract of insurance that is no more than 3 months after the original effective date of the policy, certificate, or contract of insurance, and taking into account any renewals or extensions, has a duration no longer than 4 months in total. For purposes of this paragraph (1)(i), a renewal or extension includes the term of a new short-term, limited-duration insurance policy, certificate, or contract of insurance issued by the same issuer, or if the issuer is a member of a controlled group, any other issuer that is a member of such controlled group, to the same policyholder within the 12-month period beginning on the original effective date of the initial policy, certificate, or contract of insurance; and (ii) Displays prominently on the first page (in either paper or electronic form, including on a website) of the policy, certificate, or contract of insurance, and in any marketing, application, and enrollment materials (including reenrollment materials) provided to individuals at or before the time an individual has the opportunity to enroll (or reenroll) in the coverage, in at least 14-point font, the language in the following notice: (2) For purposes of paragraph (1)(i) of this definition, the term “controlled group” means any group treated as a single employer under section 52(a), 52(b), 414(m), or 414(o) of the Internal Revenue Code of 1986, as amended. (3) If any provision of this definition is held to be invalid or unenforceable by its terms, or as applied to any entity or circumstance, or stayed pending further agency action, the provision shall be construed so as to continue to give the maximum effect to the provision permitted by law, along with other provisions not found invalid or unenforceable, including as applied to entities not similarly situated or to dissimilar circumstances, unless such holding is that the provision is invalid and unenforceable in all circumstances, in which event the provision shall be severable from the remainder of the definition and shall not affect the remainder thereof. Significant break in coverage significant break in coverage Special enrollment State State health benefits risk pool State health benefits risk pool Travel insurance Waiting period waiting period [69 FR 78763, Dec. 30, 2004, as amended at 74 FR 51683, Oct. 7, 2009; 75 FR 37229, June 28, 2010; 79 FR 10308, Feb. 24, 2014; 80 FR 72256, Nov. 18, 2015; 81 FR 75325, Oct. 31, 2016; 83 FR 38242, Aug. 3, 2018; 84 FR 29001, June 20, 2019; 89 FR 23413, Apr. 3, 2024] § 2590.701-3 Limitations on preexisting condition exclusion period. (a) Preexisting condition exclusion defined. preexisting condition exclusion preexisting condition exclusion (2) Examples. Example 1. (i) Facts. S. T. T (ii) Conclusion. Example 1, Example 2. (i) Facts. (ii) Conclusion. Example 2, Example 3. (i) Facts. (ii) Conclusion. Example 3, Example 4. (i) Facts. (ii) Conclusion. Example 4, Example 5. (i) Facts. (ii) Conclusion. Example 5, Example 6. (i) Facts. (ii) Conclusion. Example 6, Example 7. (i) Facts. (ii) Conclusion. Example 7, Example 8. (i) Facts. (ii) Conclusion. Example 8, (b) General rules. See [69 FR 78763, Dec. 30, 2004, as amended at 75 FR 37229, June 28, 2010; 79 FR 10308, Feb. 24, 2014; 80 FR 72256, Nov. 18, 2015] § 2590.701-4 Rules relating to creditable coverage. (a) General rules Creditable coverage. creditable coverage (i) A group health plan as defined in § 2590.732(a). (ii) Health insurance coverage as defined in § 2590.701-2 (whether or not the entity offering the coverage is subject to Part 7 of Subtitle B of Title I of the Act, and without regard to whether the coverage is offered in the group market, the individual market, or otherwise). (iii) Part A or B of Title XVIII of the Social Security Act (Medicare). (iv) Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under section 1928 of the Social Security Act (the program for distribution of pediatric vaccines). (v) Title 10 U.S.C. Chapter 55 (medical and dental care for members and certain former members of the uniformed services, and for their dependents; for purposes of Title 10 U.S.C. Chapter 55, uniformed services (vi) A medical care program of the Indian Health Service or of a tribal organization. (vii) A State health benefits risk pool. For purposes of this section, a State health benefits risk pool (A) An organization qualifying under section 501(c)(26) of the Internal Revenue Code; (B) A qualified high risk pool described in section 2744(c)(2) of the PHS Act; or (C) Any other arrangement sponsored by a State, the membership composition of which is specified by the State and which is established and maintained primarily to provide health coverage for individuals who are residents of such State and who, by reason of the existence or history of a medical condition— ( 1 ( 2 (viii) A health plan offered under Title 5 U.S.C. Chapter 89 (the Federal Employees Health Benefits Program). (ix) A public health plan. For purposes of this section, a public health plan (x) A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)). (xi) Title XXI of the Social Security Act (State Children's Health Insurance Program). (2) Excluded coverage. (b) Counting creditable coverage rules superseded by prohibition on preexisting condition exclusion. See [69 FR 78763, Dec. 30, 2004, as amended at 79 FR 10309, Feb. 24, 2014] § 2590.701-5 Evidence of creditable coverage. (a) In general. See (b) Applicability. [79 FR 10309, Feb. 24, 2014] § 2590.701-6 Special enrollment periods. (a) Special enrollment for certain individuals who lose coverage In general. (2) Individuals eligible for special enrollment When employee loses coverage. (A) The employee and the dependents are otherwise eligible to enroll in the benefit package; (B) When coverage under the plan was previously offered, the employee had coverage under any group health plan or health insurance coverage; and (C) The employee satisfies the conditions of paragraph (a)(3)(i), (ii), or (iii) of this section and, if applicable, paragraph (a)(3)(iv) of this section. (ii) When dependent loses coverage ( 1 ( 2 ( 3 (B) However, the plan or issuer is not required to enroll any other dependent unless that dependent satisfies the criteria of this paragraph (a)(2)(ii), or the employee satisfies the criteria of paragraph (a)(2)(i) of this section. (iii) Examples. Example 1. (i) Facts. A X. A A A X A Y X A Y A Y (ii) Conclusion. Example 1, A A A A X Example 2. (i) Facts. A A P A A A A A A Q A P A A Q. Q. (ii) Conclusion. Example 2 A A Q P A A P. Example 3. (i) Facts. B X. B B X B Y X B Y B Y (ii) Conclusion. Example 3 B B B X Example 4. (i) Facts. A X. X A A Y Y X A Y A A A (ii) Conclusion. Example 4, A A A X A A A (3) Conditions for special enrollment Loss of eligibility for coverage. (A) Loss of eligibility for coverage as a result of legal separation, divorce, cessation of dependent status (such as attaining the maximum age to be eligible as a dependent child under the plan), death of an employee, termination of employment, reduction in the number of hours of employment, and any loss of eligibility for coverage after a period that is measured by reference to any of the foregoing; (B) In the case of coverage offered through an HMO, or other arrangement, in the individual market that does not provide benefits to individuals who no longer reside, live, or work in a service area, loss of coverage because an individual no longer resides, lives, or works in the service area (whether or not within the choice of the individual); (C) In the case of coverage offered through an HMO, or other arrangement, in the group market that does not provide benefits to individuals who no longer reside, live, or work in a service area, loss of coverage because an individual no longer resides, lives, or works in the service area (whether or not within the choice of the individual), and no other benefit package is available to the individual; and (D) A situation in which a plan no longer offers any benefits to the class of similarly situated individuals (as described in § 2590.702(d)) that includes the individual. (ii) Termination of employer contributions. (iii) Exhaustion of COBRA continuation coverage. Exhaustion of COBRA continuation coverage (iv) Written statement. (v) The rules of this paragraph (a)(3) are illustrated by the following examples: Example 1. (i) Facts. D Y. D Y D Y Y (ii) Conclusion. Example 1, D D Y Example 2. (i) Facts. A (ii) Conclusion. Example 2, A A A A A A. Example 3. (i) Facts. C X. X C Z C C X X C Z C X C X Z (ii) Conclusion. Example 3, C C Z X Z C X C Z (4) Applying for special enrollment and effective date of coverage. (ii) Coverage must begin no later than the first day of the first calendar month beginning after the date the plan or issuer receives the request for special enrollment. (b) Special enrollment with respect to certain dependent beneficiaries In general. (2) Individuals eligible for special enrollment. (i) Current employee only. (ii) Spouse of a participant only. (A) The individual becomes the spouse of a participant; or (B) The individual is a spouse of a participant and a child becomes a dependent of the participant through birth, adoption, or placement for adoption. (iii) Current employee and spouse. (A) The employee and the spouse become married; or (B) The employee and spouse are married and a child becomes a dependent of the employee through birth, adoption, or placement for adoption. (iv) Dependent of a participant only. (v) Current employee and a new dependent. (vi) Current employee, spouse, and a new dependent. (3) Applying for special enrollment and effective date of coverage Request. (ii) Reasonable procedures for special enrollment. (iii) Date coverage must begin Marriage. (B) Birth, adoption, or placement for adoption. (4) Examples. Example 1. (i) Facts. A A B C A B. A B (ii) Conclusion. Example 1, A A A B A, B, C C Example 2. (i) Facts. D X D D. E D D E (ii) Conclusion. Example 2, D E D E (c) Notice of special enrollment. (1) Description of special enrollment rights. If you are declining enrollment for yourself or your dependents (including your spouse) because of other health insurance or group health plan coverage, you may be able to enroll yourself and your dependents in this plan if you or your dependents lose eligibility for that other coverage (or if the employer stops contributing towards your or your dependents' other coverage). However, you must request enrollment within [insert “30 days” or any longer period that applies under the plan] after your or your dependents' other coverage ends (or after the employer stops contributing toward the other coverage). In addition, if you have a new dependent as a result of marriage, birth, adoption, or placement for adoption, you may be able to enroll yourself and your dependents. However, you must request enrollment within [insert “30 days” or any longer period that applies under the plan] after the marriage, birth, adoption, or placement for adoption. To request special enrollment or obtain more information, contact [insert the name, title, telephone number, and any additional contact information of the appropriate plan representative]. (2) Additional information that may be required. (d) Treatment of special enrollees. (2) Special enrollees must be offered all the benefit packages available to similarly situated individuals who enroll when first eligible. For this purpose, any difference in benefits or cost-sharing requirements for different individuals constitutes a different benefit package. In addition, a special enrollee cannot be required to pay more for coverage than a similarly situated individual who enrolls in the same coverage when first eligible. (3) The rules of this section are illustrated by the following example: Example. (i) Facts. Y B B (ii) Conclusion. Example, B B B [69 FR 78763, Dec. 30, 2004, as amended at 79 FR 10309, Feb. 24, 2014] § 2590.701-7 HMO affiliation period as an alternative to a preexisting condition exclusion. The rules for HMO affiliation periods have been superseded by the prohibition on preexisting condition exclusions. See [79 FR 10309, Feb. 24, 2014] § 2590.701-8 Interaction With the Family and Medical Leave Act. [Reserved] § 2590.702 Prohibiting discrimination against participants and beneficiaries based on a health factor. (a) Health factors. health factor (i) Health status; (ii) Medical condition (including both physical and mental illnesses), as defined in § 2590.701-2; (iii) Claims experience; (iv) Receipt of health care; (v) Medical history; (vi) Genetic information, as defined in § 2590.702-1(a)(3) of this Part. (vii) Evidence of insurability; or (viii) Disability. (2) Evidence of insurability includes— (i) Conditions arising out of acts of domestic violence; and (ii) Participation in activities such as motorcycling, snowmobiling, all-terrain vehicle riding, horseback riding, skiing, and other similar activities. (3) The decision whether health coverage is elected for an individual (including the time chosen to enroll, such as under special enrollment or late enrollment) is not, itself, within the scope of any health factor. (However, under § 2590.701-6, a plan or issuer must treat special enrollees the same as similarly situated individuals who are enrolled when first eligible.) (b) Prohibited discrimination in rules for eligibility In general. (ii) For purposes of this section, rules for eligibility include, but are not limited to, rules relating to— (A) Enrollment; (B) The effective date of coverage; (C) Waiting (or affiliation) periods; (D) Late and special enrollment; (E) Eligibility for benefit packages (including rules for individuals to change their selection among benefit packages); (F) Benefits (including rules relating to covered benefits, benefit restrictions, and cost-sharing mechanisms such as coinsurance, copayments, and deductibles), as described in paragraphs (b)(2) and (3) of this section; (G) Continued eligibility; and (H) Terminating coverage (including disenrollment) of any individual under the plan. (iii) The rules of this paragraph (b)(1) are illustrated by the following examples: Example 1. (i) Facts. (ii) Conclusion. Example 1 Example 2. (i) Facts. (ii) Conclusion. Example 2 Example 3. (i) Facts. (ii) Conclusion. Example 3 Example 4. (i) Facts. A A A A A A A (ii) Conclusion. Example 4 A A A A (2) Application to benefits General rule (B) However, benefits provided under a plan must be uniformly available to all similarly situated individuals (as described in paragraph (d) of this section). Likewise, any restriction on a benefit or benefits must apply uniformly to all similarly situated individuals and must not be directed at individual participants or beneficiaries based on any health factor of the participants or beneficiaries (determined based on all the relevant facts and circumstances). Thus, for example, a plan may limit or exclude benefits in relation to a specific disease or condition, limit or exclude benefits for certain types of treatments or drugs, or limit or exclude benefits based on a determination of whether the benefits are experimental or not medically necessary, but only if the benefit limitation or exclusion applies uniformly to all similarly situated individuals and is not directed at individual participants or beneficiaries based on any health factor of the participants or beneficiaries. In addition, a plan or issuer may require the satisfaction of a deductible, copayment, coinsurance, or other cost-sharing requirement in order to obtain a benefit if the limit or cost-sharing requirement applies uniformly to all similarly situated individuals and is not directed at individual participants or beneficiaries based on any health factor of the participants or beneficiaries. In the case of a cost-sharing requirement, see also paragraph (b)(2)(ii) of this section, which permits variances in the application of a cost-sharing mechanism made available under a wellness program. (Whether any plan provision or practice with respect to benefits complies with this paragraph (b)(2)(i) does not affect whether the provision or practice is permitted under ERISA, the Affordable Care Act (including the requirements related to essential health benefits), the Americans with Disabilities Act, or any other law, whether State or Federal.) (C) For purposes of this paragraph (b)(2)(i), a plan amendment applicable to all individuals in one or more groups of similarly situated individuals under the plan and made effective no earlier than the first day of the first plan year after the amendment is adopted is not considered to be directed at any individual participants or beneficiaries. (D) The rules of this paragraph (b)(2)(i) are illustrated by the following examples: Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. B (ii) Conclusion. Example 2 B B Example 3. (i) Facts. C C C C (ii) Conclusion. Example 3 C C C. Example 4. (i) Facts. (ii) Conclusion. Example 4, Example 5. (i) Facts. (ii) Conclusion. Example 5, Example 6. (i) Facts. (ii) Conclusion. Example 6 Example 7. (i) Facts. (ii) Conclusion. Example 7 (ii) Exception for wellness programs. (iii) Specific rule relating to source-of-injury exclusions. (B) The rules of this paragraph (b)(2)(iii) are illustrated by the following examples: Example 1. (i) Facts. D D D (ii) Conclusion. Example 1 D Example 2. (i) Facts. E E (ii) Conclusion. Example 2, E E E (c) Prohibited discrimination in premiums or contributions In general. (ii) Discounts, rebates, payments in kind, and any other premium differential mechanisms are taken into account in determining an individual's premium or contribution rate. (For rules relating to cost-sharing mechanisms, see paragraph (b)(2) of this section (addressing benefits).) (2) Rules relating to premium rates Group rating based on health factors not restricted under this section. see (ii) List billing based on a health factor prohibited. (iii) Examples. Example 1. (i) Facts. F F' (ii) Conclusion. Example 1, F F' (3) Exception for wellness programs. (d) Similarly situated individuals. (1) Participants. (2) Beneficiaries. (A) A bona fide employment-based classification of the participant through whom the beneficiary is receiving coverage; (B) Relationship to the participant (for example, as a spouse or as a dependent child); (C) Marital status; (D) With respect to children of a participant, age or student status; or (E) Any other factor if the factor is not a health factor. (ii) Paragraph (d)(2)(i) of this section does not prevent more favorable treatment of individuals with adverse health factors in accordance with paragraph (g) of this section. (3) Discrimination directed at individuals. (4) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. (ii) Conclusion. Example 3. (i) Facts. (ii) Conclusion. Example 3, Example 4. (i) Facts. (ii) Conclusion. Example 4, Example 5. (i) Facts. G G G' (ii) Conclusion. Example 5, G G G G (e) Nonconfinement and actively-at-work provisions Nonconfinement provisions General rule. (ii) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. M. N. N (ii) Conclusion. Example 2, N N M N M (2) Actively-at-work and continuous service provisions General rule. (B) The rules of this paragraph (e)(2)(i) are illustrated by the following examples: Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. (ii) Conclusion. (ii) Exception for the first day of work. (B) The rules of this paragraph (e)(2)(ii) are illustrated by the following examples: Example 1. (i) Facts. H H H H (ii) Conclusion. Example 1, Example 2. (i) Facts. J J J J (ii) Conclusion. Example 2, Example 1, (3) Relationship to plan provisions defining similarly situated individuals. (ii) The rules of this paragraph (e)(3) are illustrated by the following examples: Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. (ii) Conclusion. Example 2, Example 3. (i) Facts. B B B B B (ii) Conclusion. Example 3, B B Example 4. (i) Facts. C C (ii) Conclusion. Example 4, C C (f) Nondiscriminatory wellness programs—in general. (1) Definitions. (i) Reward. (ii) Participatory wellness programs. (A) A program that reimburses employees for all or part of the cost for membership in a fitness center. (B) A diagnostic testing program that provides a reward for participation in that program and does not base any part of the reward on outcomes. (C) A program that encourages preventive care through the waiver of the copayment or deductible requirement under a group health plan for the costs of, for example, prenatal care or well-baby visits. (Note that, with respect to non-grandfathered plans, § 2590.715-2713 of this part requires benefits for certain preventive health services without the imposition of cost sharing.) (D) A program that reimburses employees for the costs of participating, or that otherwise provides a reward for participating, in a smoking cessation program without regard to whether the employee quits smoking. (E) A program that provides a reward to employees for attending a monthly, no-cost health education seminar. (F) A program that provides a reward to employees who complete a health risk assessment regarding current health status, without any further action (educational or otherwise) required by the employee with regard to the health issues identified as part of the assessment. ( See also (iii) Health-contingent wellness programs. (iv) Activity-only wellness programs. See (v) Outcome-based wellness programs. See (2) Requirement for participatory wellness programs. (3) Requirements for activity-only wellness programs. (i) Frequency of opportunity to qualify. (ii) Size of reward. (iii) Reasonable design. (iv) Uniform availability and reasonable alternative standards. (A) Under this paragraph (f)(3)(iv), a reward under an activity-only wellness program is not available to all similarly situated individuals for a period unless the program meets both of the following requirements: ( 1 ( 2 (B) While plans and issuers are not required to determine a particular reasonable alternative standard in advance of an individual's request for one, if an individual is described in either paragraph (f)(3)(iv)(A)( 1 2 (C) All the facts and circumstances are taken into account in determining whether a plan or issuer has furnished a reasonable alternative standard, including but not limited to the following: ( 1 ( 2 ( 3 ( 4 (D) To the extent that a reasonable alternative standard under an activity-only wellness program is, itself, an activity-only wellness program, it must comply with the requirements of this paragraph (f)(3) in the same manner as if it were an initial program standard. (Thus, for example, if a plan or issuer provides a walking program as a reasonable alternative standard to a running program, individuals for whom it is unreasonably difficult due to a medical condition to complete the walking program (or for whom it is medically inadvisable to attempt to complete the walking program) must be provided a reasonable alternative standard to the walking program.) To the extent that a reasonable alternative standard under an activity-only wellness program is, itself, an outcome-based wellness program, it must comply with the requirements of paragraph (f)(4) of this section, including paragraph (f)(4)(iv)(D). (E) If reasonable under the circumstances, a plan or issuer may seek verification, such as a statement from an individual's personal physician, that a health factor makes it unreasonably difficult for the individual to satisfy, or medically inadvisable for the individual to attempt to satisfy, the otherwise applicable standard of an activity-only wellness program. Plans and issuers may seek verification with respect to requests for a reasonable alternative standard for which it is reasonable to determine that medical judgment is required to evaluate the validity of the request. (v) Notice of availability of reasonable alternative standard. (vi) Example. Example. (i) Facts. (ii) Conclusion. Example, (4) Requirements for outcome-based wellness programs. (i) Frequency of opportunity to qualify. (ii) Size of reward. (iii) Reasonable design. (iv) Uniform availability and reasonable alternative standards. (A) Under this paragraph (f)(4)(iv), a reward under an outcome-based wellness program is not available to all similarly situated individuals for a period unless the program allows a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual who does not meet the initial standard based on the measurement, test, or screening, as described in this paragraph (f)(4)(iv). (B) While plans and issuers are not required to determine a particular reasonable alternative standard in advance of an individual's request for one, if an individual is described in paragraph (f)(4)(iv)(A) of this section, a reasonable alternative standard must be furnished by the plan or issuer upon the individual's request or the condition for obtaining the reward must be waived. (C) All the facts and circumstances are taken into account in determining whether a plan or issuer has furnished a reasonable alternative standard, including but not limited to the following: ( 1 ( 2 ( 3 ( 4 (D) To the extent that a reasonable alternative standard under an outcome-based wellness program is, itself, an activity-only wellness program, it must comply with the requirements of paragraph (f)(3) of this section in the same manner as if it were an initial program standard. To the extent that a reasonable alternative standard under an outcome-based wellness program is, itself, another outcome-based wellness program, it must comply with the requirements of this paragraph (f)(4), subject to the following special provisions: ( 1 ( 2 (E) It is not reasonable to seek verification, such as a statement from an individual's personal physician, under an outcome-based wellness program that a health factor makes it unreasonably difficult for the individual to satisfy, or medically inadvisable for the individual to attempt to satisfy, the otherwise applicable standard as a condition of providing a reasonable alternative to the initial standard. However, if a plan or issuer provides an alternative standard to the otherwise applicable measurement, test, or screening that involves an activity that is related to a health factor, then the rules of paragraph (f)(3) of this section for activity-only wellness programs apply to that component of the wellness program and the plan or issuer may, if reasonable under the circumstances, seek verification that it is unreasonably difficult due to a medical condition for an individual to perform or complete the activity (or it is medically inadvisable to attempt to perform or complete the activity). (For example, if an outcome-based wellness program requires participants to maintain a certain healthy weight and provides a diet and exercise program for individuals who do not meet the targeted weight, a plan or issuer may seek verification, as described in paragraph (f)(3)(iv)(D) of this section, if reasonable under the circumstances, that a second reasonable alternative standard is needed for certain individuals because, for those individuals, it would be unreasonably difficult due to a medical condition to comply, or medically inadvisable to attempt to comply, with the diet and exercise program, due to a medical condition.) (v) Notice of availability of reasonable alternative standard. (vi) Examples. Example 1—Cholesterol screening with reasonable alternative standard to work with personal physician. (i) Facts. (ii) Conclusion. Example 1, Example 2—Cholesterol screening with plan alternative and no opportunity for personal physician involvement. (i) Facts. Example 1, (ii) Conclusion. Example 2, 3 Example 3—Cholesterol screening with plan alternative that can be modified by personal physician. (i) Facts. Example 2, (ii) Conclusion. Example 3, 3 Example 4—BMI screening with walking program alternative. (i) Facts. E E E E' E E (ii) Conclusion. Example 4, Example 5—BMI screening with alternatives available to either lower BMI or meet personal physician's recommendations. (i) Facts. Example 4 (ii) Conclusion. Example 5, 4 Example 6—Tobacco use surcharge with smoking cessation program alternative. (i) Facts. (ii) Conclusion. Example 6, Example 7—Tobacco use surcharge with alternative program requiring actual cessation. (i) Facts. Example 6, F F (ii) Conclusion. Example 7, F' Example 8—Tobacco use surcharge with smoking cessation program alternative that is not reasonable. (i) Facts. Example 6, F' F (ii) Conclusion. Example 8, F F' (5) Applicable percentage. (ii) The rules of this paragraph (f)(5) are illustrated by the following examples: Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. Example 1, (ii) Conclusion. Example 2, Example 3. (i) Facts. Example 1, (ii) Conclusion. Example 3, Example 4. (i) Facts. (ii) Conclusion. Example 4, (6) Sample language. (g) More favorable treatment of individuals with adverse health factors permitted In rules for eligibility. (ii) The rules of this paragraph (g)(1) are illustrated by the following examples: Example 1. (i) Facts. (ii) Conclusion. Example 2. (i) Facts. (ii) Conclusion. Example 2, Example 3. (i) Facts. (ii) Conclusion. Example 3, (2) In premiums or contributions. (ii) The rules of this paragraph (g)(2) are illustrated by the following example: Example. (i) Facts. (ii) Conclusion. Example, (h) No effect on other laws. (i) Applicability dates. [71 FR 75038, Dec. 13, 2006, as amended at 74 FR 51683, Oct. 7, 2009; 78 FR 33181, June 3, 2013; 79 FR 10309, Feb. 24, 2014] § 2590.702-1 Additional requirements prohibiting discrimination based on genetic information. (a) Definitions. (1) Collect (2) Family member (i) A dependent (as defined for purposes of § 2590.701-2 of this Part) of the individual; or (ii) Any other person who is a first-degree, second-degree, third-degree, or fourth-degree relative of the individual or of a dependent of the individual. Relatives by affinity (such as by marriage or adoption) are treated the same as relatives by consanguinity (that is, relatives who share a common biological ancestor). In determining the degree of the relationship, relatives by less than full consanguinity (such as half-siblings, who share only one parent) are treated the same as relatives by full consanguinity (such as siblings who share both parents). (A) First-degree relatives include parents, spouses, siblings, and children. (B) Second-degree relatives include grandparents, grandchildren, aunts, uncles, nephews, and nieces. (C) Third-degree relatives include great-grandparents, great-grandchildren, great aunts, great uncles, and first cousins. (D) Fourth-degree relatives include great-great grandparents, great-great grandchildren, and children of first cousins. (3) Genetic information (i) Subject to paragraphs (a)(3)(ii) and (a)(3)(iii) of this section, with respect to an individual, information about— (A) The individual's genetic tests (as defined in paragraph (a)(5) of this section); (B) The genetic tests of family members of the individual; (C) The manifestation (as defined in paragraph (a)(6) of this section) of a disease or disorder in family members of the individual; or (D) Any request for, or receipt of, genetic services (as defined in paragraph (a)(4) of this section), or participation in clinical research which includes genetic services, by the individual or any family member of the individual. (ii) The term genetic information (iii) The term genetic information (A) With respect to a pregnant woman (or a family member of the pregnant woman), genetic information of any fetus carried by the pregnant woman; and (B) With respect to an individual (or a family member of the individual) who is utilizing an assisted reproductive technology, genetic information of any embryo legally held by the individual or family member. (4) Genetic services (i) A genetic test, as defined in paragraph (a)(5) of this section; (ii) Genetic counseling (including obtaining, interpreting, or assessing genetic information); or (iii) Genetic education. (5)(i) Genetic test (ii) The rules of this paragraph (a)(5) are illustrated by the following example: Example. (i) Facts. A A A' (ii) Conclusion. Example, A (6)(i) Manifestation manifested (ii) The rules of this paragraph (a)(6) are illustrated by the following examples: Example 1. (i) Facts. A A A' A A' A' A (ii) Conclusion. Example 1, A A. Example 2. (i) Facts. B B' B B' B B B B B (ii) Conclusion. Example 2, B B B. Example 3. (i) Facts. Example 2, B' B' (ii) Conclusion. Example 3, B Example 4. (i) Facts. C C C C (ii) Conclusion. Example 4, C C. Example 5. (i) Facts. Example 4, C C. (ii) Conclusion. Example 5, C C. (7) Underwriting purposes (b) No group-based discrimination based on genetic information In general. (2) Rule of construction. (3) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. A A A' A' A (ii) Conclusion. Example 2, A' A' A' (c) Limitation on requesting or requiring genetic testing General rule. (2) Health care professional may recommend a genetic test. (3) Examples. Example 1. (i) Facts. A A' A A' A A (ii) Conclusion. Example 1, A. A Example 2. (i) Facts. B B B' B' B (ii) Conclusion. Example 2, B. B (4) Determination regarding payment In general. (ii) Limitation. (iii) Examples. See (5) Research exception. (i) Research in accordance with Federal regulations and applicable State or local law or regulations. (ii) Written request for participation in research. (A) Compliance with the request is voluntary; and (B) Noncompliance will have no effect on eligibility for benefits (as described in § 2590.702(b)(1) of this Part) or premium or contribution amounts. (iii) Prohibition on underwriting. (iv) Notice to Federal agencies. (d) Prohibitions on collection of genetic information For underwriting purposes General rule. See (ii) Underwriting purposes defined. underwriting purposes (A) Rules for, or determination of, eligibility (including enrollment and continued eligibility) for benefits under the plan or coverage as described in § 2590.702(b)(1)(ii) of this Part (including changes in deductibles or other cost-sharing mechanisms in return for activities such as completing a health risk assessment or participating in a wellness program); (B) The computation of premium or contribution amounts under the plan or coverage (including discounts, rebates, payments in kind, or other premium differential mechanisms in return for activities such as completing a health risk assessment or participating in a wellness program); (C) The application of any preexisting condition exclusion under the plan or coverage; and (D) Other activities related to the creation, renewal, or replacement of a contract of health insurance or health benefits. (iii) Medical appropriateness. See (2) Prior to or in connection with enrollment In general. (ii) Incidental collection exception In general. (B) Limitation. (3) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. Example 1, (ii) Conclusion. Example 2, Example 3. (i) Facts. (ii) Conclusion. Example 3, Example 4. (i) Facts. Example 1, (ii) Conclusion. Example 4, Example 5. (i) Facts. (ii) Conclusion. Example 5, Example 6. (i) Facts. (ii) Conclusion. Example 6, Example 7. (i) Facts. Example 6, (ii) Conclusion. Example 7, Example 8. (i) Facts. M N. M N' N N M N M N' (ii) Conclusion. Example 8, M' M (e) Examples regarding determinations of medical appropriateness. Example 1. (i) Facts. A' A' A A' A (ii) Conclusion. Example 1, A' Example 2. (i) Facts. B' B B B' B (ii) Conclusion. Example 2, Example 3. (i) Facts. C C' C C' 2 (ii) Conclusion. Example 3, C' C 2 C. Example 4. (i) Facts. (ii) Conclusion. Example 4, Example 5. (i) Facts. Example 4, (ii) Conclusion. Example 5, Example 6. (i) Facts. Example 4, (ii) Conclusion. Example 6, (f) Applicability date. [74 FR 51683, Oct. 7, 2009] § 2590.702-2 Special rule allowing integration of Health Reimbursement Arrangements (HRAs) and other account-based group health plans with individual health insurance coverage and Medicare and prohibiting discrimination in HRAs and other account-based group health plans. (a) Scope. (b) Purpose. (c) General rule. (1) Enrollment in individual health insurance coverage In general. (ii) Forfeiture. (iii) Grace periods and retroactive termination of individual health insurance coverage. (2) No traditional group health plan may be offered to same participants. (3) Same terms requirement In general. (ii) Carryover amounts, salary reduction arrangements, and transfer amounts. (iii) Permitted variation. (A) Variation due to number of dependents. (B) Variation due to age. 1 2 ( 1 ( 2 (iv) Former employees. (v) New employees or new dependents. (vi) HSA-compatible HRAs. (vii) Examples. Example 5 (A) Example 1: Carryover amounts permitted 1 Facts. ( 2 Conclusion. Example 1 (B) Example 2: Employees hired after the first day of the plan year 1 Facts. ( 2 Conclusion. Example 2 (C) Example 3: HRA amounts offered vary based on number of dependents 1 Facts. ( 2 Conclusion. Example 3 (D) Example 4: HRA amounts offered vary based on increases in employees' ages 1 Facts. ( 2 Conclusion. Example 4 2 (E) Example 5: Application of same terms requirement to premium only HRA 1 Facts. ( 2 Conclusion. Example 5 (4) Opt out. (5) Reasonable procedures for coverage substantiation Substantiation of individual health insurance coverage for the plan year. (A) A document from a third party (for example, the issuer or an Exchange) showing that the participant and any dependents covered by the HRA are, or will be, enrolled in individual health insurance coverage (for example, an insurance card or an explanation of benefits document pertaining to the relevant time period or documentation from the Exchange showing that the individual has completed the application and plan selection); or (B) An attestation by the participant stating that the participant and dependent(s) covered by the HRA are, or will be, enrolled in individual health insurance coverage, the date coverage began or will begin, and the name of the provider of the coverage. (ii) Coverage substantiation with each request for reimbursement of medical care expenses. (iii) Reliance on substantiation. (6) Notice requirement Timing. (A) At least 90 calendar days before the beginning of each plan year for any participant who is not described in either paragraph (c)(6)(i)(B) or (C) of this section; (B) No later than the date on which the HRA may first take effect for the participant, for any participant who is not eligible to participate at the beginning of the plan year (or is not eligible to participate at the time the notice is provided at least 90 calendar days before the beginning of the plan year pursuant to paragraph (c)(6)(i)(A) of this section); or (C) No later than the date on which the HRA may first take effect for the participant, for any participant who is employed by an employer that is first established less than 120 days before the beginning of the first plan year of the HRA; this paragraph (c)(6)(i)(C) applies only with respect to the first plan year of the HRA. (ii) Content. (A) A description of the terms of the HRA, including the maximum dollar amount available for each participant (including the self-only HRA amount available for the plan year (or the maximum dollar amount available for the plan year if the HRA provides for reimbursements up to a single dollar amount regardless of whether a participant has self-only or other than self-only coverage)), any rules regarding the proration of the maximum dollar amount applicable to any participant (or dependent, if applicable) who is not eligible to participate in the HRA for the entire plan year, whether (and which of) the participant's dependents are eligible for the HRA, a statement that there are different kinds of HRAs (including a qualified small employer health reimbursement arrangement) and the HRA being offered is an individual coverage HRA, a statement that the HRA requires the participant and any covered dependents to be enrolled in individual health insurance coverage (or Medicare Part A and B or Medicare Part C, if applicable), a statement that the coverage in which the participant and any covered dependents must be enrolled cannot be short-term, limited-duration insurance or consist solely of excepted benefits, a statement that individual health insurance coverage in which the participant and any covered dependents are enrolled is not subject to the Employee Retirement Income Security Act if the conditions under § 2510.3-1(l) of this chapter are satisfied, the date as of which coverage under the HRA may first become effective (both for participants whose coverage will become effective on the first day of the plan year and for participants whose HRA coverage may become effective at a later date), the dates on which the HRA plan year begins and ends, and the dates on which the amounts newly made available under the HRA will be made available. (B) A statement of the right of the participant to opt out of and waive future reimbursements from the HRA, as set forth under paragraph (c)(4) of this section. (C) A description of the potential availability of the premium tax credit if the participant opts out of and waives future reimbursements from the HRA and the HRA is not affordable for one or more months under 26 CFR 1.36B-2(c)(5), a statement that even if the participant opts out of and waives future reimbursements from an HRA, the offer will prohibit the participant (and, potentially, the participant's dependents) from receiving a premium tax credit for the participant's coverage (or the dependent's coverage, if applicable) on an Exchange for any month that the HRA is affordable under 26 CFR 1.36B-2(c)(5), a statement describing how the participant may find assistance with determining affordability, a statement that, if the participant is a former employee, the offer of the HRA does not render the participant (or the participant's dependents, if applicable) ineligible for the premium tax credit regardless of whether it is affordable under 26 CFR 1.36B-2(c)(5), and a statement that if the participant or dependent is enrolled in Medicare, he or she is ineligible for the premium tax credit without regard to the offer or acceptance of the HRA; (D) A statement that if the participant accepts the HRA, the participant may not claim a premium tax credit for the participant's Exchange coverage for any month the HRA may be used to reimburse medical care expenses of the participant, and a premium tax credit may not be claimed for the Exchange coverage of the participant's dependents for any month the HRA may be used to reimburse medical care expenses of the dependents. (E) A statement that the participant must inform any Exchange to which the participant applies for advance payments of the premium tax credit of the availability of the HRA; the self-only HRA amount available for the HRA plan year (or the maximum dollar amount available for the plan year if the HRA provides for reimbursements up to a single dollar amount regardless of whether a participant has self-only or other than self-only coverage) as set forth in the written notice in accordance with paragraph (c)(6)(ii)(A) of this section; whether the HRA is also available to the participant's dependents and if so, which ones; the date as of which coverage under the HRA may first become effective; the date on which the plan year begins and the date on which it ends; and whether the participant is a current employee or former employee. (F) A statement that the participant should retain the written notice because it may be needed to determine whether the participant is allowed a premium tax credit on the participant's individual income tax return. (G) A statement that the HRA may not reimburse any medical care expense unless the substantiation requirement set forth in paragraph (c)(5)(ii) of this section is satisfied and a statement that the participant must also provide the substantiation required by paragraph (c)(5)(i) of this section. (H) A statement that if the individual health insurance coverage (or coverage under Medicare Part A and B or Medicare Part C) of a participant or dependent ceases, the HRA will not reimburse any medical care expenses that are incurred by the participant or dependent, as applicable, after the coverage ceases, and a statement that the participant must inform the HRA if the participant's or dependent's individual health insurance coverage (or coverage under Medicare Part A and B or Medicare Part C) is cancelled or terminated retroactively and the date on which the cancellation or termination is effective. (I) The contact information (including a phone number) for an individual or a group of individuals who participants may contact in order to receive additional information regarding the HRA. The plan sponsor may determine which individual or group of individuals is best suited to be the specified contact. (J) A statement of availability of a special enrollment period to enroll in or change individual health insurance coverage, through or outside of an Exchange, for the participant and any dependents who newly gain access to the HRA and are not already covered by the HRA. (d) Classes of employees In general. (2) List of classes. (i) Full-time employees, defined at the election of the plan sponsor to mean either full-time employees under section 4980H of the Code (and 26 CFR 54.4980H-1(a)(21)) or employees who are not part-time employees (as described in 26 CFR 1.105-11(c)(2)(iii)(C)); (ii) Part-time employees, defined at the election of the plan sponsor to mean either employees who are not full-time employees under section 4980H of the Code (and under 26 CFR 54.4980H-1(a)(21) (which defines full-time employee)) or employees who are part-time employees as described in 26 CFR 1.105-11(c)(2)(iii)(C); (iii) Employees who are paid on a salary basis; (iv) Non-salaried employees (such as, for example, hourly employees); (v) Employees whose primary site of employment is in the same rating area as defined in 45 CFR 147.102(b); (vi) Seasonal employees, defined at the election of the plan sponsor to mean seasonal employees as described in either 26 CFR 54.4980H-1(a)(38) or 26 CFR 1.105-11(c)(2)(iii)(C); (vii) Employees included in a unit of employees covered by a particular collective bargaining agreement (or an appropriate related participation agreement) in which the plan sponsor participates (as described in 26 CFR 1.105-11(c)(2)(iii)(D)); (viii) Employees who have not satisfied a waiting period for coverage (if the waiting period complies with § 2590.715-2708 of this part); (ix) Non-resident aliens with no U.S.-based income (as described in 26 CFR 1.105-11(c)(2)(iii)(E)); (x) Employees who, under all the facts and circumstances, are employees of an entity that hired the employees for temporary placement at an entity that is not the common law employer of the employees and that is not treated as a single employer with the entity that hired the employees for temporary placement under section 414(b), (c), (m), or (o) of the Code; or (xi) A group of participants described as a combination of two or more of the classes of employees set forth in paragraphs (d)(2)(i) through (x) of this section. (3) Minimum class size requirement In general. (ii) Circumstances in which minimum class size requirement applies. (B) The minimum class size requirement does not apply to a class of employees offered a traditional group health plan or a class of employees offered no coverage. (C) The minimum class size requirement applies to a class of employees offered an individual coverage HRA if the class is full-time employees, part-time employees, salaried employees, non-salaried employees, or employees whose primary site of employment is in the same rating area (described in paragraph (d)(2)(i), (ii), (iii), (iv), or (v) of this section, respectively, and referred to collectively as the applicable classes or individually as an applicable class), except that: ( 1 ( 2 (D) A class of employees offered an individual coverage HRA is also subject to the minimum class size requirement if the class is a class of employees created by combining at least one of the applicable classes (as defined in paragraph (d)(3)(ii)(C) of this section) with any other class, except that the minimum class size requirement shall not apply to a class that is the result of a combination of one of the applicable classes and a class of employees who have not satisfied a waiting period (as described in paragraph (d)(2)(viii) of this section). (iii) Determination of the applicable class size minimum In general. ( 1 ( 2 ( 3 (B) Determining employer size. (iv) Determining if a class satisfies the applicable class size minimum. (4) Consistency requirement. (i) To the extent applicable under the HRA for the plan year, each of the three classes of employees are defined in accordance with section 105(h) of the Code or each of the three classes of employees are defined in accordance with section 4980H of the Code for the plan year; and (ii) The HRA plan document sets forth the applicable definitions prior to the beginning of the plan year to which the definitions will apply. (5) Special rule for new hires In general. (ii) New hire date. (iii) Discontinuation of use of special rule for new hires and multiple applications of the special rule for new hires. (iv) Application of the minimum class size requirement under the special rule for new hires. (6) Student employees offered student premium reduction arrangements. (e) Integration of Individual Coverage HRAs with Medicare General rule. (2) Application of conditions in paragraph (c) of this section In general. (ii) Exceptions. (f) Examples Examples regarding classes and the minimum class size requirement. (i) Example 1: Collectively bargained employees offered traditional group health plan; non-collectively bargained employees offered HRA Facts. (B) Conclusion. Example 1 Example 1 (ii) Example 2: Collectively bargained employees in one unit offered traditional group health plan and in another unit offered HRA Facts. (B) Conclusion. Example 2 Example 2 (iii) Example 3: Employees in a waiting period offered no coverage; other employees offered an HRA Facts. (B) Conclusion. Example 3 Example 3 (iv) Example 4: Employees in a waiting period offered an HRA; other employees offered a traditional group health plan Facts. (B) Conclusion. Example 4 Example 4 (v) Example 5: Staffing firm employees temporarily placed with customers offered an HRA; other employees offered a traditional group health plan Facts. (B) Conclusion. Example 5 Example 5 (vi) Example 6: Staffing firm employees temporarily placed with customers in rating area 1 offered an HRA; other employees offered a traditional group health plan Facts. Example 5 (B) Conclusion. Example 6 (vii) Example 7: Employees in State 1 offered traditional group health plan; employees in State 2 offered HRA Facts. (B) Conclusion. Example 7 Example 7 (viii) Example 8: Full-time seasonal employees offered HRA; all other full-time employees offered traditional group health plan; part-time employees offered no coverage Facts. (B) Conclusion. Example 8 Example 8 (ix) Example 9: Full-time employees in rating area 1 offered traditional group health plan; full-time employees in rating area 2 offered HRA; part-time employees offered no coverage Facts. (B) Conclusion. Example 9 Example 9 (x) Example 10: Employees in rating area 1 offered HRA; employees in rating area 2 offered traditional group health plan Facts. Example 9 (B) Conclusion. Example 10 Example 10 (xi) Example 11: Employees in State 1 and rating area 1 of State 2 offered HRA; employees in all other rating areas of State 2 offered traditional group health plan Facts. (B) Conclusion. Example 11 (xii) Example 12: Salaried employees offered a traditional group health plan; hourly employees offered an HRA Facts. (B) Conclusion. Example 12 Example 12) (xiii) Example 13: Part-time employees and full-time employees offered different HRAs; no traditional group health plan offered Facts. (B) Conclusion. Example 13 (xiv) Example 14: No employees offered an HRA Facts. Example 13 (B) Conclusion. (xv) Example 15: Full-time employees offered traditional group health plan; part-time employees offered HRA Facts. Example 13 (B) Conclusion. Example 15 Example 15 (xvi) Example 16: Satisfying minimum class size requirement based on employees offered HRA Facts. (B) Conclusion. Example 16 (xvii) Example 17: Student employees offered student premium reduction arrangements and same terms requirement Facts. (B) Conclusion. Example 17 (xiii) Example 18: Student employees offered student premium reduction arrangements and minimum class size requirement Facts. (B) Conclusion. Example 18 (2) Examples regarding special rule for new hires. (i) Example 1: Application of special rule for new hires to all employees Facts. (B) Conclusion. Example 1 (ii) Example 2: Application of special rule for new hires to full-time employees Facts. (B) Conclusion. Example 2 (iii) Example 3: Special rule for new hires impermissibly applied retroactively Facts. (B) Conclusion. Example 3 (iv) Example 4: Permissible second application of the special rule for new hires to the same class of employees Facts. (B) Conclusion. (v) Example 5: Impermissible second application of the special rule for new hires to the same class of employees Facts. Example 4 (B) Conclusion. (vi) Example 6: New full-time employees offered different HRAs in different rating areas Facts. (B) Conclusion. Example 6 (vii) Example 7: New full-time employee class subdivided based on rating area Facts. (B) Conclusion. Example 7 (viii) Example 8: New full-time employee class subdivided based on state Facts. Example 7 (B) Conclusion. Example 8 (ix) Example 9: New full-time employees and part-time employees offered HRA Facts. (B) Conclusion. (g) Applicability date. [84 FR 29001, June 20, 2019] § 2590.703 Guaranteed renewability in multiemployer plans and multiple employer welfare arrangements. [Reserved] Subpart C—Other Requirements Source: 62 FR 16941, Apr. 8, 1997, unless otherwise noted. Redesignated at 65 FR 62142, Dec. 27, 2000. § 2590.711 Standards relating to benefits for mothers and newborns. (a) Hospital length of stay General rule. (i) 48 hours following a vaginal delivery; or (ii) 96 hours following a delivery by cesarean section. (2) When stay begins Delivery in a hospital. (ii) Delivery outside a hospital. (3) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 1 Example 2. (i) Facts. (ii) Conclusion. Example 2 Example 3. (i) Facts. (ii) Conclusion. Example 3 (4) Authorization not required In general. (ii) Example. Example. (i) Facts. (ii) Conclusion. Example (5) Exceptions Discharge of mother. (ii) Discharge of newborn. (iii) Attending provider defined. (iv) Example. Example. (i) Facts. (ii) Conclusion. Example (b) Prohibitions With respect to mothers In general. (A) Deny a mother or her newborn child eligibility or continued eligibility to enroll or renew coverage under the terms of the plan solely to avoid the requirements of this section; or (B) Provide payments (including payments-in-kind) or rebates to a mother to encourage her to accept less than the minimum protections available under this section. (ii) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 1 Example 2. (i) Facts. (ii) Conclusion. Example 2 (2) With respect to benefit restrictions In general. (ii) Example. Example. (i) Facts. (ii) Conclusion. Example (3) With respect to attending providers. (i) Penalize (for example, take disciplinary action against or retaliate against), or otherwise reduce or limit the compensation of, an attending provider because the provider furnished care to a participant or beneficiary in accordance with this section; or (ii) Provide monetary or other incentives to an attending provider to induce the provider to furnish care to a participant or beneficiary in a manner inconsistent with this section, including providing any incentive that could induce an attending provider to discharge a mother or newborn earlier than 48 hours (or 96 hours) after delivery. (c) Construction. (1) Hospital stays not mandatory. (i) Give birth in a hospital; or (ii) Stay in the hospital for a fixed period of time following the birth of her child. (2) Hospital stay benefits not mandated. (3) Cost-sharing rules In general. (ii) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 1 Example 2. (i) Facts. (ii) Conclusion. Example 2 (4) Compensation of attending provider. (d) Notice requirement. (e) Applicability in certain states Health insurance coverage. (i) The state law requires the coverage to provide for at least a 48-hour hospital length of stay following a vaginal delivery and at least a 96-hour hospital length of stay following a delivery by cesarean section. (ii) The state law requires the coverage to provide for maternity and pediatric care in accordance with guidelines that relate to care following childbirth established by the American College of Obstetricians and Gynecologists, the American Academy of Pediatrics, or any other established professional medical association. (iii) The state law requires, in connection with the coverage for maternity care, that the hospital length of stay for such care is left to the decision of (or is required to be made by) the attending provider in consultation with the mother. State laws that require the decision to be made by the attending provider with the consent of the mother satisfy the criterion of this paragraph (e)(1)(iii). (2) Group health plans Fully-insured plans. (ii) Self-insured plans. (iii) Partially-insured plans. (3) Relation to section 731(a) of the Act. (4) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. (ii) Conclusion. Example 2, (f) Applicability date. [73 FR 62422, Oct. 20, 2008] § 2590.712 Parity in mental health and substance use disorder benefits. (a) Purpose and meaning of terms Purpose. (2) Meaning of terms. Aggregate lifetime dollar limit Annual dollar limit Coverage unit Cumulative financial requirements Cumulative quantitative treatment limitations DSM Evidentiary standards Factors Financial requirements ICD Medical/surgical benefits Mental health benefits Processes Strategies Substance use disorder benefits Treatment limitations (b) Parity requirements with respect to aggregate lifetime and annual dollar limits. (1) General General parity requirement. (ii) Exception. (2) Plan with no limit or limits on less than one-third of all medical/surgical benefits. (3) Plan with a limit on at least two-thirds of all medical/surgical benefits. (i) Apply the aggregate lifetime or annual dollar limit both to the medical/surgical benefits to which the limit would otherwise apply and to mental health or substance use disorder benefits in a manner that does not distinguish between the medical/surgical benefits and mental health or substance use disorder benefits; or (ii) Not include an aggregate lifetime or annual dollar limit on mental health or substance use disorder benefits that is less than the aggregate lifetime or annual dollar limit, respectively, on medical/surgical benefits. (For cumulative limits other than aggregate lifetime or annual dollar limits, see paragraph (c)(3)(v) of this section prohibiting separately accumulating cumulative financial requirements or cumulative quantitative treatment limitations.) (4) Determining one-third and two-thirds of all medical/surgical benefits. (5) Plan not described in paragraph (b)(2) or (b)(3) of this section In general. (A) Impose no aggregate lifetime or annual dollar limit, as appropriate, on mental health or substance use disorder benefits; or (B) Impose an aggregate lifetime or annual dollar limit on mental health or substance use disorder benefits that is no less than an average limit calculated for medical/surgical benefits in the following manner. The average limit is calculated by taking into account the weighted average of the aggregate lifetime or annual dollar limits, as appropriate, that are applicable to the categories of medical/surgical benefits. Limits based on delivery systems, such as inpatient/outpatient treatment or normal treatment of common, low-cost conditions (such as treatment of normal births), do not constitute categories for purposes of this paragraph (b)(5)(i)(B). In addition, for purposes of determining weighted averages, any benefits that are not within a category that is subject to a separately-designated dollar limit under the plan are taken into account as a single separate category by using an estimate of the upper limit on the dollar amount that a plan may reasonably be expected to incur with respect to such benefits, taking into account any other applicable restrictions under the plan. (ii) Weighting. (c) Parity requirements with respect to financial requirements and treatment limitations Clarification of terms Classification of benefits. (ii) Type of financial requirement or treatment limitation. (iii) Level of a type of financial requirement or treatment limitation. (iv) Coverage unit. (2) General parity requirement General rule. (ii) Classifications of benefits used for applying rules In general. ( 1 Inpatient, in-network. ( 2 Inpatient, out-of-network. ( 3 Outpatient, in-network. ( 4 Outpatient, out-of-network. ( 5 Emergency care. ( 6 Prescription drugs. (B) Application to out-of-network providers. (C) Examples. ( 1 Example 1 i Facts. ( ii Conclusion. 1 Example 1 ( 2 Example 2 i Facts. ( ii Conclusion. 2 Example 2 ( 3 Example 3 i Facts. 2 i Example 2 ( ii Conclusion. 3 Example 3 ( 4 Example 4 i Facts. 2 i Example 2 ( ii Conclusion. 4 Example 4 ( 5 Example 5 i Facts. ( ii Conclusion. 5 Example 5 ( 6 Example 6 i Facts. 5 Example 5 ( ii Conclusion. 6 Example 6 ( 7 Example 7 i Facts. ( ii Conclusion. 7 Example 7 ( 8 Example 8 i Facts. ( ii Conclusion. 8 Example 8 (3) Financial requirements and quantitative treatment limitations Determining “substantially all” and “predominant” Substantially all. (B) Predominant. 1 ( 2 (C) Portion based on plan payments. (D) Clarifications for certain threshold requirements. (E) Determining the dollar amount of plan payments. (ii) Application to different coverage units. (iii) Special rules. (A) Multi-tiered prescription drug benefits. (B) Multiple network tiers. (C) Sub-classifications permitted for office visits, separate from other outpatient services. ( 1 ( 2 (iv) Examples. (A) Example 1 1 Facts. i Table 1 to Paragraph ( c iv 1 i Coinsurance rate 0% 10% 15% 20% 30% Total. Projected payments $200x $100x $450x $100x $150x $1,000x. Percent of total plan costs 20% 10% 45% 10% 15% Percent subject to coinsurance level N/A 12.5% (100x/800x) 56.25% (450x/800x) 12.5% (100x/800x) 18.75% (150x/800x) ( ii ( 2 Conclusion. Example 1 (B) Example 2 1 Facts. i Table 2 to Paragraph ( c iv 1 i Copayment amount $0 $10 $15 $20 $50 Total. Projected payments $200x $200x $200x $300x $100x $1,000x. Percent of total plan costs 20% 20% 20% 30% 10% Percent subject to copayments N/A 25% (200x/800x) 25% (200x/800x) 37.5% (300x/800x) 12.5% (100x/800x) ( ii ( 2 Conclusion. Example 2 (C) Example 3 1 Facts. ( 2 Conclusion. Example 3 (D) Example 4 1 Facts. Table 3 to Paragraph ( c iv D 1 Tier 1 Tier 2 Tier 3 Tier 4 Tier description Generic drugs Preferred brand name drugs Non-preferred brand name drugs (which may have Tier 1 or Tier 2 alternatives) Specialty drugs. Percent paid by plan 90% 80% 60% 50%. ( 2 Conclusion. Example 4 (E) Example 5 1 Facts. ( 2 Conclusion. Example 5 (F) Example 6 1 Facts. ( 2 Conclusion. Example 6 (G) Example 7 1 Facts. 1 Example 6 ( 2 Conclusion. Example 7 (v) No separate cumulative financial requirements or cumulative quantitative treatment limitations. (B) The rules of this paragraph (c)(3)(v) are illustrated by the following examples: Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. (ii) Conclusion. Example 2, Example 3. (i) Facts. (ii) Conclusion. Example 3, Example 4. (i) Facts. Classification Benefits Total benefits Percent Inpatient, in-network $1,800x $2,000x 90 Inpatient, out-of-network 1,000x 1,000x 100 Outpatient, in-network 1,400x 2,000x 70 Outpatient, out-of-network 1,880x 2,000x 94 Emergency care 300x 500x 60 (ii) Conclusion. Example 4, (4) Nonquantitative treatment limitations. (i) Requirements related to design and application of a nonquantitative treatment limitation In general. (B) Prohibition on discriminatory factors and evidentiary standards. ( 1 1 ( 2 ( 3 (ii) Illustrative, non-exhaustive list of nonquantitative treatment limitations. (A) Medical management standards (such as prior authorization) limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative; (B) Formulary design for prescription drugs; (C) For plans with multiple network tiers (such as preferred providers and participating providers), network tier design; (D) Standards related to network composition, including but not limited to, standards for provider and facility admission to participate in a network or for continued network participation, including methods for determining reimbursement rates, credentialing standards, and procedures for ensuring the network includes an adequate number of each category of provider and facility to provide services under the plan or coverage; (E) Plan or issuer methods for determining out-of-network rates, such as allowed amounts; usual, customary, and reasonable charges; or application of other external benchmarks for out-of-network rates; (F) Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective (also known as fail-first policies or step therapy protocols); (G) Exclusions based on failure to complete a course of treatment; and (H) Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided under the plan or coverage. (iii) Required use of outcomes data In general. ( 1 Relevant data generally. ( 2 Relevant data for nonquantitative treatment limitations related to network composition. 1 ( 3 Unavailability of data. i ( ii ( iii 3 i ii (B) Material differences. ( 1 ( 2 2 ( i 2 ( ii (C) Nonquantitative treatment limitations related to network composition. 1 ( 1 ( 2 ( 3 ( 4 (iv) Prohibition on separate nonquantitative treatment limitations applicable only to mental health or substance use disorder benefits. (v) Effect of final determination of noncompliance under § 2590.712-1. (B) A determination by the Secretary of whether to require cessation of a nonquantitative treatment limitation under this paragraph (c)(4)(v) will be based on an evaluation of the relevant facts and circumstances involved in the specific final determination and the nature of the underlying nonquantitative treatment limitation and will take into account the interest of plan participants and beneficiaries and feedback from the plan or issuer. (vi) Examples. (A) Example 1 (not comparable and more stringent factors for reimbursement rate methodology, in operation) 1 Facts. ( 2 Conclusion. Example 1 (B) Example 2 (strategy for exclusion for experimental or investigative treatment more stringently applied to ABA therapy in operation) 1 Facts. ( 2 Conclusion. Example 2 (C) Example 3 (step therapy protocol with exception for severe or irreversible consequences, discriminatory factor) 1 Facts. and ( 2 Conclusion. Example 3 (D) Example 4 (use of historical plan data and plan steps to correct, cure, or supplement) 1 Facts. ( 2 Conclusion. Example 4 2 (E) Example 5 (generally recognized independent professional medical or clinical standards and more stringent prior authorization requirement in operation) 1 Facts. ( 2 Conclusion. Example 5 3 (F) Example 6 (plan claims no data exist to reasonably assess impact of nonquantitative treatment limitation on access; medical necessity criteria) 1 Facts. ( 2 Conclusion. Example 6 3 ii (G) Example 7 (concurrent review data collection; no material difference in access)—(1) Facts. ( 2 Conclusion. Example 7 (H) Example 8 (material difference in access for prior authorization requirement with reasonable action) 1 Facts. ( 2 Conclusion. Example 8 1 (I) Example 9 (differences attributable to generally recognized independent professional medical or clinical standards) 1 Facts. ( 2 Conclusion. Example 9 (J) Example 10 (material differences in access for standards for provider admission to a network with reasonable action) 1 Facts. ( 2 Conclusion. Example 10 (K) Example 11 (separate EAP exhaustion treatment limitation applicable only to mental health or substance use disorder benefits) 1 Facts. ( 2 Conclusion. Example 11 1 (L) Example 12 (separate exclusion for treatment in a residential facility applicable only to mental health and substance use disorder benefits) 1 Facts. ( 2 Conclusion. Example 12 (M) Example 13 (impermissible nonquantitative treatment limitation imposed following a final determination of noncompliance and direction by the Secretary) 1 Facts. ( 2 Conclusion. Example 13 (5) Exemptions. (d) Availability of plan information Criteria for medical necessity determinations. (2) Reason for any denial. (3) Provisions of other law. (e) Applicability Group health plans. (2) Health insurance issuers. (3) Scope. (i) Require a group health plan (or health insurance issuer offering coverage in connection with a group health plan) to provide any mental health benefits or substance use disorder benefits, and the provision of benefits by a plan (or health insurance coverage) for one or more mental health conditions or substance use disorders does not require the plan or health insurance coverage under this section to provide benefits for any other mental health condition or substance use disorder; (ii) Require a group health plan (or health insurance issuer offering coverage in connection with a group health plan) that provides coverage for mental health or substance use disorder benefits only to the extent required under PHS Act section 2713 to provide additional mental health or substance use disorder benefits in any classification in accordance with this section; or (iii) Affect the terms and conditions relating to the amount, duration, or scope of mental health or substance use disorder benefits under the plan (or health insurance coverage) except as specifically provided in paragraphs (b) and (c) of this section. (4) Coordination with EHB requirements. (f) Small employer exemption In general. small employer (2) Rules in determining employer size. (i) All persons treated as a single employer under subsections (b), (c), (m), and (o) of section 414 of the Code are treated as one employer; (ii) If an employer was not in existence throughout the preceding calendar year, whether it is a small employer is determined based on the average number of employees the employer reasonably expects to employ on business days during the current calendar year; and (iii) Any reference to an employer for purposes of the small employer exemption includes a reference to a predecessor of the employer. (g) Increased cost exemption In general. (2) Applicable percentage. (i) 2 percent in the case of the first plan year in which this section is applied to the plan or coverage; and (ii) 1 percent in the case of each subsequent plan year. (3) Determinations by actuaries (ii) The written report described in paragraph (g)(3)(i) of this section shall be maintained by the group health plan or health insurance issuer, along with all supporting documentation relied upon by the actuary, for a period of six years following the notification made under paragraph (g)(6) of this section. (4) Formula. [(E 1 0 0 k (i) E 1 (ii) E 0 (iii) T 0 (iv) k is the applicable percentage of increased cost specified in paragraph (g)(2) of this section that will be expressed as a fraction for purposes of this formula. (v) D is the average change in spending that is calculated by applying the formula ( E 1 E 0 T 0 (5) Six month determination. (6) Notification. (i) Participants and beneficiaries Content of notice. ( 1 ( 2 ( 3 ( 4 ( 5 3 ( 6 ( 7 ( 8 (B) Use of summary of material reductions in covered services or benefits. (C) Delivery. (D) Availability of documentation. (ii) Federal agencies Content of notice. ( 1 ( 2 ( 3 (B) Reporting. (iii) Confidentiality. (A) A breakdown of States by the size and type of employers submitting such notification; and (B) A summary of the data received under paragraph (g)(6)(ii) of this section. (iv) Audits. (h) Sale of nonparity health insurance coverage. (i) Applicability dates In general. (i) This section applies to group health plans and health insurance issuers offering group health insurance coverage on the first day of the first plan year beginning on or after January 1, 2025, except that the requirements of paragraphs (c)(2)(ii)(A), (c)(4)(i)(B), and (c)(4)(iii) of this section apply on the first day of the first plan year beginning on or after January 1, 2026. (ii) Until the applicability date in paragraph (i)(1)(i) of this section, plans and issuers are required to continue to comply with 29 CFR 2590.712, revised as of July 1, 2022. (2) Special effective date for certain collectively-bargained plans. (j) Severability. [78 FR 68276, Nov. 13, 2013, as amended at 89 FR 77719, Sept. 23, 2024] § 2590.712-1 Nonquantitative treatment limitation comparative analysis requirements. (a) Meaning of terms. (b) In general. (c) Comparative analysis content requirements. (1) Description of the nonquantitative treatment limitation. (i) Identification of the nonquantitative treatment limitation, including the specific terms of the plan or coverage or other relevant terms regarding the nonquantitative treatment limitation, the policies or guidelines (internal or external) in which the nonquantitative treatment limitation appears or is described, and the applicable sections of any other relevant documents, such as provider contracts, that describe the nonquantitative treatment limitation; (ii) Identification of all mental health or substance use disorder benefits and medical/surgical benefits to which the nonquantitative treatment limitation applies, including a list of which benefits are considered mental health or substance use disorder benefits and which benefits are considered medical/surgical benefits; and (iii) A description of which benefits are included in each classification set forth in § 2590.712(c)(2)(ii)(A). (2) Identification and definition of the factors and evidentiary standards used to design or apply the nonquantitative treatment limitation. (i) Identification of every factor considered or relied upon, as well as the evidentiary standards considered or relied upon to design or apply each factor and the sources from which each evidentiary standard was derived, in determining which mental health or substance use disorder benefits and which medical/surgical benefits are subject to the nonquantitative treatment limitation; and (ii) A definition of each factor, including: (A) A detailed description of the factor; (B) A description of each evidentiary standard used to design or apply each factor (and the source of each evidentiary standard) identified under paragraph (c)(2)(i) of this section; and (C) A description of any steps the plan or issuer has taken to correct, cure, or supplement any information, evidence, sources, or standards that would otherwise have been considered biased or not objective under § 2590.712(c)(4)(i)(B)( 1 (3) Description of how factors are used in the design and application of the nonquantitative treatment limitation. (i) A detailed explanation of how each factor identified and defined in paragraph (c)(2) of this section is used to determine which mental health or substance use disorder benefits and which medical/surgical benefits are subject to the nonquantitative treatment limitation; (ii) An explanation of the evidentiary standards or other information or sources (if any) considered or relied upon in designing or applying the factors or relied upon in designing and applying the nonquantitative treatment limitation, including in the determination of whether and how mental health or substance use disorder benefits or medical/surgical benefits are subject to the nonquantitative treatment limitation; (iii) If the application of the factor depends on specific decisions made in the administration of benefits, the nature of the decisions, the timing of the decisions, and the professional designations and qualifications of each decision maker; (iv) If more than one factor is identified and defined in paragraph (c)(2) of this section, an explanation of: (A) How all of the factors relate to each other; (B) The order in which all the factors are applied, including when they are applied; (C) Whether and how any factors are given more weight than others; and (D) The reasons for the ordering or weighting of the factors; and (v) Any deviations or variations from a factor, its applicability, or its definition (including the evidentiary standards used to define the factor and the information or sources from which each evidentiary standard was derived), such as how the factor is used differently to apply the nonquantitative treatment limitation to mental health or substance use disorder benefits as compared to medical/surgical benefits, and a description of how the plan or issuer establishes such deviations or variations. (4) Demonstration of comparability and stringency as written. (i) Documentation of each factor identified and defined in paragraph (c)(2) of this section that was applied to determine whether the nonquantitative treatment limitation applies to mental health or substance use disorder benefits and medical/surgical benefits in a classification, including, as relevant: (A) Quantitative data, calculations, or other analyses showing whether, in each classification in which the nonquantitative treatment limitation applies, mental health or substance use disorder benefits and medical/surgical benefits met or did not meet any applicable threshold identified in the relevant evidentiary standard to determine that the nonquantitative treatment limitation would or would not apply; and (B) Records maintained by the plan or issuer documenting the consideration and application of all factors and evidentiary standards, as well as the results of their application; (ii) In each classification in which the nonquantitative treatment limitation applies to mental health or substance use disorder benefits, a comparison of how the nonquantitative treatment limitation, as written, is designed and applied to mental health or substance use disorder benefits and to medical/surgical benefits, including the specific provisions of any forms, checklists, procedure manuals, or other documentation used in designing and applying the nonquantitative treatment limitation or that address the application of the nonquantitative treatment limitation; (iii) Documentation demonstrating how the factors are comparably applied, as written, to mental health or substance use disorder benefits and medical/surgical benefits in each classification, to determine which benefits are subject to the nonquantitative treatment limitation; and (iv) An explanation of the reasons for any deviations or variations in the application of a factor used to apply the nonquantitative treatment limitation, or the application of the nonquantitative treatment limitation, to mental health or substance use disorder benefits as compared to medical/surgical benefits, and how the plan or issuer establishes such deviations or variations, including: (A) In the definition of the factors, the evidentiary standards used to define the factors, and the sources from which the evidentiary standards were derived; (B) In the design of the factors or evidentiary standards; or (C) In the application or design of the nonquantitative treatment limitation. (5) Demonstration of comparability and stringency in operation. (i) A comprehensive explanation of how the plan or issuer evaluates whether, in operation, the processes, strategies, evidentiary standards, or other factors used in designing and applying the nonquantitative treatment limitation to mental health or substance use disorder benefits in a classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in designing and applying the nonquantitative treatment limitation with respect to medical/surgical benefits, including: (A) An explanation of any methodology and underlying data used to demonstrate the application of the nonquantitative treatment limitation, in operation; (B) The sample period, inputs used in any calculations, definitions of terms used, and any criteria used to select the mental health or substance use disorder benefits and medical/surgical benefits to which the nonquantitative treatment limitation is applicable; (C) With respect to a nonquantitative treatment limitation for which relevant data is temporarily unavailable as described in § 2590.712(c)(4)(iii)(A)( 3 i (D) With respect to a nonquantitative treatment limitation for which no data exist that can reasonably assess any relevant impact of the nonquantitative treatment limitation on relevant outcomes related to access to mental health and substance use disorder benefits and medical/surgical benefits as described in § 2590.712(c)(4)(iii)(A)( 3 ii (ii) Identification of the relevant data collected and evaluated, as required under § 2590.712(c)(4)(iii)(A); (iii) Documentation of the outcomes that resulted from the application of the nonquantitative treatment limitation to mental health or substance use disorder benefits and medical/surgical benefits, including: (A) The evaluation of relevant data as required under § 2590.712(c)(4)(iii)(A); and (B) A reasoned justification and analysis that explains why the plan or issuer concluded that any differences in the relevant data do or do not suggest the nonquantitative treatment limitation contributes to material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits, in accordance with § 2590.712(c)(4)(iii)(B)( 2 (iv) A detailed explanation of any material differences in access demonstrated by the outcomes evaluated under paragraph (c)(5)(iii) of this section, including: (A) A reasoned explanation of any material differences in access that are not attributable to differences in the comparability or relative stringency of the nonquantitative treatment limitation as applied to mental health or substance use disorder benefits and medical/surgical benefits (including any considerations beyond a plan's or issuer's control that contribute to the existence of material differences) and a detailed explanation of the bases for concluding that material differences are not attributable to differences in the comparability or relative stringency of the nonquantitative treatment limitation; and (B) To the extent differences in access to mental health or substance use disorder benefits are attributable to generally recognized independent professional medical or clinical standards or carefully circumscribed measures reasonably and appropriately designed to detect or prevent and prove fraud and abuse that minimize the negative impact on access to appropriate mental health and substance use disorder benefits, and such standards or measures are used as the basis for a factor or evidentiary standard used to design or apply a nonquantitative treatment limitation, documentation explaining how any such differences are attributable to those standards or measures, as required in § 2590.712(c)(4)(iii)(B)( 2 ii (v) A discussion of the actions that have been or are being taken by the plan or issuer to address any material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits, including the actions the plan or issuer has taken or is taking under § 2590.712(c)(4)(iii)(B)( 1 (A) A reasoned explanation of any material differences in access to mental health or substance use disorder benefits as compared to medical/surgical benefits that persist despite reasonable actions that have been or are being taken; and (B) For a plan or issuer designing and applying one or more nonquantitative treatment limitations related to network composition, a discussion of the actions that have been or are being taken to address material differences in access to in-network mental health and substance use disorder benefits as compared to in-network medical/surgical benefits, including those listed in § 2590.712(c)(4)(iii)(C). (6) Findings and conclusions. (i) Any findings or conclusions indicating that the plan or coverage is or is not (or might or might not be) in compliance with the requirements of § 2590.712(c)(4), including any additional actions the plan or issuer has taken or intends to take to address any potential areas of concern or noncompliance; (ii) A reasoned and detailed discussion of the findings and conclusions described in paragraph (c)(6)(i) of this section; (iii) Citations to any additional specific information not otherwise included in the comparative analysis that supports the findings and conclusions described in paragraph (c)(6)(i) of this section not otherwise discussed in the comparative analysis; (iv) The date the analysis is completed and the title and credentials of all relevant persons who participated in the performance and documentation of the comparative analysis; (v) If the comparative analysis relies upon an evaluation by a reviewer or consultant considered by the plan or issuer to be an expert, an assessment of each expert's qualifications and the extent to which the plan or issuer ultimately relied upon each expert's evaluation in performing and documenting the comparative analysis of the design and application of the nonquantitative treatment limitation applicable to both mental health or substance use disorder benefits and medical/surgical benefits; and (vi) A certification by one or more named fiduciaries that they have engaged in a prudent process to select one or more qualified service providers to perform and document a comparative analysis in connection with the imposition of any nonquantitative treatment limitations that apply to mental health and substance use disorder benefits under the plan in accordance with applicable law and regulations, and have satisfied their duty to monitor those service providers as required under part 4 of ERISA with respect to the performance and documentation of such comparative analysis. (d) Requirements related to submission of comparative analyses to the Secretary upon request Initial request by the Secretary for comparative analysis. (2) Additional information required after a comparative analysis is deemed to be insufficient. (3) Initial determination of noncompliance, required action, and corrective action plan. (4) Requirement to notify participants and beneficiaries of final determination of noncompliance In general. (ii) Content of notice. (A) The following statement prominently displayed on the first page, in no less than 14-point font: “Attention! The Department of Labor has determined that [insert the name of group health plan or health insurance issuer] is not in compliance with the Mental Health Parity and Addiction Equity Act.”; (B) A summary of changes the plan or issuer has made as part of its corrective action plan specified to the Secretary following the initial determination of noncompliance, including an explanation of any opportunity for a participant or beneficiary to have a claim for benefits submitted or reprocessed; (C) A summary of the Secretary's final determination that the plan or issuer is not in compliance with § 2590.712(c)(4) or this section, including any provisions or practices identified as being in violation of § 2590.712(c)(4) or this section, additional corrective actions identified by the Secretary in the final determination notice, and information on how participants and beneficiaries can obtain from the plan or issuer a copy of the final determination of noncompliance; (D) Any additional actions the plan or issuer is taking to come into compliance with § 2590.712(c)(4) or this section, when the plan or issuer will take such actions, and a clear and accurate statement explaining whether the Secretary has concurred with those actions; and (E) Contact information for questions and complaints, and a statement explaining how participants and beneficiaries can obtain more information about the notice, including: ( 1 ( 2 (iii) Manner of notice. (A) The format is readily accessible; (B) The notice is provided in paper form free of charge upon request; and (C) In a case in which the electronic form is an internet posting, the plan or issuer timely notifies the participant or beneficiary in paper form (such as a postcard) or email, that the documents are available on the internet, provides the internet address, includes the statement required in paragraph (d)(4)(ii)(A) of this section, and notifies the participant or beneficiary that the documents are available in paper form upon request. (e) Requests for a copy of a comparative analysis. (1) Any applicable State authority; (2) A participant or beneficiary (including a provider or other person acting as a participant's or beneficiary's authorized representative) who has received an adverse benefit determination related to mental health or substance use disorder benefits; and (3) Participants and beneficiaries, who may request the comparative analysis at any time under ERISA section 104. (f) Rule of construction. (g) Applicability. (h) Severability. [89 FR 77731, Sept. 23, 2024] § 2590.715-1251 Preservation of right to maintain existing coverage. (a) Definition of grandfathered health plan coverage In general Grandfathered health plan coverage (ii) Changes in group health insurance coverage. (2) Disclosure of grandfather status. (ii) The following model language can be used to satisfy this disclosure requirement: This [group health plan or health insurance issuer] believes this [plan or coverage] is a “grandfathered health plan” under the Patient Protection and Affordable Care Act (the Affordable Care Act). As permitted by the Affordable Care Act, a grandfathered health plan can preserve certain basic health coverage that was already in effect when that law was enacted. Being a grandfathered health plan means that your [plan or policy] may not include certain consumer protections of the Affordable Care Act that apply to other plans, for example, the requirement for the provision of preventive health services without any cost sharing. However, grandfathered health plans must comply with certain other consumer protections in the Affordable Care Act, for example, the elimination of lifetime dollar limits on benefits. Questions regarding which protections apply and which protections do not apply to a grandfathered health plan and what might cause a plan to change from grandfathered health plan status can be directed to the plan administrator at [insert contact information]. [For ERISA plans, insert: You may also contact the Employee Benefits Security Administration, U.S. Department of Labor at 1-866-444-3272 or www.dol.gov/ebsa/healthreform www.healthcare.gov (3)(i) Documentation of plan or policy terms on March 23, 2010. (A) Maintain records documenting the terms of the plan or health insurance coverage in connection with the coverage in effect on March 23, 2010, and any other documents necessary to verify, explain, or clarify its status as a grandfathered health plan; and (B) Make such records available for examination upon request. (ii) Change in group health insurance coverage. (4) Family members enrolling after March 23, 2010. (b) Allowance for new employees to join current plan In general. (2) Anti-abuse rules Mergers and acquisitions. (ii) Change in plan eligibility. (A) Employees are transferred into the plan or health insurance coverage (the transferee plan) from a plan or health insurance coverage under which the employees were covered on March 23, 2010 (the transferor plan); (B) Comparing the terms of the transferee plan with those of the transferor plan (as in effect on March 23, 2010) and treating the transferee plan as if it were an amendment of the transferor plan would cause a loss of grandfather status under the provisions of paragraph (g)(1) of this section; and (C) There was no bona fide employment-based reason to transfer the employees into the transferee plan. For this purpose, changing the terms or cost of coverage is not a bona fide employment-based reason. (iii) Illustrative list of bona fide employment-based reasons. (A) When a benefit package is being eliminated because the issuer is exiting the market; (B) When a benefit package is being eliminated because the issuer no longer offers the product to the employer; (C) When low or declining participation by plan participants in the benefit package makes it impractical for the plan sponsor to continue to offer the benefit package; (D) When a benefit package is eliminated from a multiemployer plan as agreed upon as part of the collective bargaining process; or (E) When a benefit package is eliminated for any reason and multiple benefit packages covering a significant portion of other employees remain available to the employees being transferred. (3) Examples. Example 1. (i) Facts. F G F G (ii) Conclusion. Example 1, G F G Example 2. (i) Facts H I H H I H I, H I, H (ii) Conclusion. Example 2, H I I (c) General grandfathering rule. see (2) To the extent not inconsistent with the rules applicable to a grandfathered health plan, a grandfathered health plan must comply with the requirements of the PHS Act, ERISA, and the Internal Revenue Code applicable prior to the changes enacted by the Patient Protection and Affordable Care Act. (d) Provisions applicable to all grandfathered health plans. (e) Applicability of PHS Act sections 2704, 2711, and 2714 to grandfathered group health plans and group health insurance coverage. (2) For plan years beginning before January 1, 2014, the provisions of PHS Act section 2714 apply in the case of an adult child with respect to a grandfathered health plan that is a group health plan only if the adult child is not eligible to enroll in an eligible employer-sponsored health plan (as defined in section 5000A(f)(2) of the Internal Revenue Code) other than a grandfathered health plan of a parent. For plan years beginning on or after January 1, 2014, the provisions of PHS Act section 2714 apply with respect to a grandfathered health plan that is a group health plan without regard to whether an adult child is eligible to enroll in any other coverage. (f) Effect on collectively bargained plans In general. (g) Maintenance of grandfather status Changes causing cessation of grandfather status. (i) Elimination of benefits. (ii) Increase in percentage cost-sharing requirement. (iii) Increase in a fixed-amount cost-sharing requirement other than a copayment. (iv) Increase in a fixed-amount copayment. (A) An amount equal to $5 increased by medical inflation, as defined in paragraph (g)(4)(i) of this section (that is, $5 times medical inflation, plus $5); or (B) The maximum percentage increase (as defined in paragraph (g)(4)(ii) of this section), determined by expressing the total increase in the copayment as a percentage. (v) Decrease in contribution rate by employers and employee organizations Contribution rate based on cost of coverage. (B) Contribution rate based on a formula. (vi) Changes in annual limits Addition of an annual limit. (B) Decrease in limit for a plan or coverage with only a lifetime limit. (C) Decrease in limit for a plan or coverage with an annual limit. (2) Transitional rules Changes made prior to March 23, 2010. (A) Changes effective after March 23, 2010 pursuant to a legally binding contract entered into on or before March 23, 2010; (B) Changes effective after March 23, 2010 pursuant to a filing on or before March 23, 2010 with a State insurance department; or (C) Changes effective after March 23, 2010 pursuant to written amendments to a plan that were adopted on or before March 23, 2010. (ii) Changes made after March 23, 2010 and adopted prior to issuance of regulations. (A) The changes are effective before that date; (B) The changes are effective on or after that date pursuant to a legally binding contract entered into before that date; (C) The changes are effective on or after that date pursuant to a filing before that date with a State insurance department; or (D) The changes are effective on or after that date pursuant to written amendments to a plan that were adopted before that date. (3) Special rule for certain grandfathered high deductible health plans. (4) Definitions Medical inflation defined. medical inflation (ii) Maximum percentage increase defined. maximum percentage increase (A) With respect to increases for a group health plan and group health insurance coverage made effective on or after March 23, 2010, and before June 15, 2021, medical inflation (as defined in paragraph (g)(4)(i) of this section), expressed as a percentage, plus 15 percentage points; and (B) With respect to increases for a group health plan and group health insurance coverage made effective on or after June 15, 2021, the greater of: ( 1 ( 2 (iii) Contribution rate defined. (A) Contribution rate based on cost of coverage. contribution rate based on cost of coverage (B) Contribution rate based on a formula contribution rate based on a formula (5) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. (ii) Conclusion. Example 2, Example 3. (i) Facts. (ii) Conclusion. Example 3, Example 4. (i) Facts. Example 3 (ii) Conclusion. Example 4, Example 5. (i) Facts. Example 4 after (ii) Conclusion. Example 5, Example 4 Example 6. (i) Facts. (ii) Conclusion. Example 6, Example 6 Example 7. (i) Facts. Example 6 (ii) Conclusion. Example 7, Example 7 Example 8. (i) Facts. (ii) Conclusion. Example 8, Example 9. (i) Facts. (ii) Conclusion. Example 9, Example 10. (i) Facts. F G H H (ii) Conclusion. Example 10, H F G Example 11. (i) Facts. (ii) Conclusion. Example 11, [80 FR 72256, Nov. 18, 2015, as amended at 85 FR 81118, Dec. 15, 2020] § 2590.715-2704 Prohibition of preexisting condition exclusions. (a) No preexisting condition exclusions. (b) Examples. see Example 1. (i) Facts P N. N (ii) Conclusion. Example 1, Example 2. (i) Facts C M. M C C (ii) Conclusion. See Example 2 M C (c) Applicability date. [80 FR 72261, Nov. 18, 2015] § 2590.715-2705 Prohibiting discrimination against participants and beneficiaries based on a health factor. (a) In general. (b) Applicability date. [78 FR 33186, June 3, 2013] § 2590.715-2708 Prohibition on waiting periods that exceed 90 days. (a) General rule. (b) Waiting period defined. (c) Relation to a plan's eligibility criteria In general. See also (2) Eligibility conditions based solely on the lapse of time. (3) Other conditions for eligibility. (i) Application to variable-hour employees in cases in which a specified number of hours of service per period is a plan eligibility condition. (ii) Cumulative service requirements. (iii) Limitation on orientation periods. (d) Application to rehires. (e) Counting days. (f) Examples. Example 1. (i) Facts. A (ii) Conclusion. Example 1, A Example 2. (i) Facts. M B L (ii) Conclusion. Example 2, B B L Example 3. (i) Facts. Example 2, B M (ii) Conclusion. Example 3, B B Example 4. (i) Facts. C (ii) Conclusion. Example 4, C C Example 5. (i) Facts. (ii) Conclusion. Example 5, Example 6. (i) Facts. V' D D D' (ii) Conclusion. Example 6, V' D D D Example 7. (i) Facts. W' E W E' E' E' E E, E' E E' E E' (ii) Conclusion. Example 7, E' Example 8. (i) Facts. F X X' X F (ii) Conclusion. Example 8, F F Example 9. (i) Facts. (ii) Conclusion. Example 9, Example 10. (i) Facts. G Y Y. Y G G' Y' (ii) Conclusion. Example 10, Y' G G G' Example 11. (i) Facts. H Z Z H (ii) Conclusion. Example 11, H H (g) Special rule for health insurance issuers. (1) The issuer requires the plan sponsor to make a representation regarding the terms of any eligibility conditions or waiting periods imposed by the plan sponsor before an individual is eligible to become covered under the terms of the plan (and requires the plan sponsor to update this representation with any changes), and (2) The issuer has no specific knowledge of the imposition of a waiting period that would exceed the permitted 90-day period. (h) No effect on other laws. See e.g., (i) Applicability date. See [79 FR 10311, Feb. 24, 2014, as amended at 79 FR 35947, June 25, 2014] § 2590.715-2711 No lifetime or annual limits. (a) Prohibition Lifetime limits. (2) Annual limits General rule. (ii) Exception for health flexible spending arrangements. (b) Construction Permissible limits on specific covered benefits. (2) Condition-based exclusions. (c) Definition of essential health benefits. (1) For plan years beginning before January 1, 2020, one of the EHB-benchmark plans applicable in a State under 45 CFR 156.110, and including coverage of any additional required benefits that are considered essential health benefits consistent with 45 CFR 155.170(a)(2), or one of the three Federal Employees Health Benefits Program (FEHBP) plan options as defined by 45 CFR 156.100(a)(3), supplemented as necessary, to satisfy the standards in 45 CFR 156.110; or (2) For plan years beginning on or after January 1, 2020, an EHB-benchmark plan selected by a State in accordance with the available options and requirements for EHB-benchmark plan selection at 45 CFR 156.111, including an EHB-benchmark plan in a State that takes no action to change its EHB-benchmark plan and thus retains the EHB-benchmark plan applicable in that State for the prior year in accordance with 45 CFR 156.111(d)(1), and including coverage of any additional required benefits that are considered essential health benefits consistent with 45 CFR 155.170(a)(2). (d) Health reimbursement arrangements (HRAs) and other account-based group health plans In general. (2) Requirements for an HRA or other account-based group health plan to be integrated with another group health plan. (i) Method for integration with a group health plan: Minimum value not required. (A) The plan sponsor offers a group health plan (other than the HRA or other account-based group health plan) to the employee that does not consist solely of excepted benefits; (B) The employee receiving the HRA or other account-based group health plan is actually enrolled in a group health plan (other than the HRA or other account-based group health plan) that does not consist solely of excepted benefits, regardless of whether the plan is offered by the same plan sponsor (referred to as non-HRA group coverage); (C) The HRA or other account-based group health plan is available only to employees who are enrolled in non-HRA group coverage, regardless of whether the non-HRA group coverage is offered by the plan sponsor of the HRA or other account-based group health plan (for example, the HRA may be offered only to employees who do not enroll in an employer's group health plan but are enrolled in other non-HRA group coverage, such as a group health plan maintained by the employer of the employee's spouse); (D) The benefits under the HRA or other account-based group health plan are limited to reimbursement of one or more of the following—co-payments, co-insurance, deductibles, and premiums under the non-HRA group coverage, as well as medical care expenses that do not constitute essential health benefits as defined in paragraph (c) of this section; and (E) Under the terms of the HRA or other account-based group health plan, an employee (or former employee) is permitted to permanently opt out of and waive future reimbursements from the HRA or other account-based group health plan at least annually and, upon termination of employment, either the remaining amounts in the HRA or other account-based group health plan are forfeited or the employee is permitted to permanently opt out of and waive future reimbursements from the HRA or other account-based group health plan (see paragraph (d)(3) of this section for additional rules regarding forfeiture and waiver). (ii) Method for integration with another group health plan: Minimum value required. (A) The plan sponsor offers a group health plan (other than the HRA or other account-based group health plan) to the employee that provides minimum value pursuant to Code section 36B(c)(2)(C)(ii) (and its implementing regulations and applicable guidance); (B) The employee receiving the HRA or other account-based group health plan is actually enrolled in a group health plan (other than the HRA or other account-based group health plan) that provides minimum value pursuant to Code section 36B(c)(2)(C)(ii) (and applicable guidance), regardless of whether the plan is offered by the plan sponsor of the HRA or other account-based group health plan (referred to as non-HRA MV group coverage); (C) The HRA or other account-based group health plan is available only to employees who are actually enrolled in non-HRA MV group coverage, regardless of whether the non-HRA MV group coverage is offered by the plan sponsor of the HRA or other account-based group health plan (for example, the HRA may be offered only to employees who do not enroll in an employer's group health plan but are enrolled in other non-HRA MV group coverage, such as a group health plan maintained by an employer of the employee's spouse); and (D) Under the terms of the HRA or other account-based group health plan, an employee (or former employee) is permitted to permanently opt out of and waive future reimbursements from the HRA or other account-based group health plan at least annually, and, upon termination of employment, either the remaining amounts in the HRA or other account-based group health plan are forfeited or the employee is permitted to permanently opt out of and waive future reimbursements from the HRA or other account-based group health plan (see paragraph (d)(3) of this section for additional rules regarding forfeiture and waiver). (3) Forfeiture. (4) Requirements for an HRA or other account-based group health plan to be integrated with individual health insurance coverage or Medicare Part A and B or Medicare Part C. (5) Integration with Medicare Part B and D. (i) The plan sponsor offers a group health plan (other than the HRA or other account-based group health plan and that does not consist solely of excepted benefits) to employees who are not eligible for Medicare; (ii) The employee receiving the HRA or other account-based group health plan is actually enrolled in Medicare Part B or D; (iii) The HRA or other account-based group health plan is available only to employees who are enrolled in Medicare Part B or D; and (iv) The HRA or other account-based group health plan complies with paragraphs (d)(2)(i)(E) and (d)(2)(ii)(D) of this section. (6) Definitions. (i) Account-based group health plan. (ii) Medical care expenses. (e) Applicability date. [80 FR 72261, Nov. 18, 2015, as amended at 81 FR 75325, Oct. 31, 2016; 84 FR 29011, June 20, 2019] § 2590.715-2712 Rules regarding rescissions. (a) Prohibition on rescissions. (2) For purposes of this section, a rescission is a cancellation or discontinuance of coverage that has retroactive effect. For example, a cancellation that treats a policy as void from the time of the individual's or group's enrollment is a rescission. As another example, a cancellation that voids benefits paid up to a year before the cancellation is also a rescission for this purpose. A cancellation or discontinuance of coverage is not a rescission if— (i) The cancellation or discontinuance of coverage has only a prospective effect; (ii) The cancellation or discontinuance of coverage is effective retroactively to the extent it is attributable to a failure to timely pay required premiums or contributions (including COBRA premiums) towards the cost of coverage; (iii) The cancellation or discontinuance of coverage is initiated by the individual (or by the individual's authorized representative) and the sponsor, employer, plan, or issuer does not, directly or indirectly, take action to influence the individual's decision to cancel or discontinue coverage retroactively or otherwise take any adverse action or retaliate against, interfere with, coerce, intimidate, or threaten the individual; or (iv) The cancellation or discontinuance of coverage is initiated by the Exchange pursuant to 45 CFR 155.430 (other than under paragraph (b)(2)(iii)). (3) The rules of this paragraph (a) are illustrated by the following examples: Example 1. (i) Facts. A A A' A A A A' (ii) Conclusion. Example 1, A' A' Example 2. (i) Facts. B B B B B. B B' B (ii) Conclusion. Example 2, B' B (b) Compliance with other requirements. (c) Applicability date. [80 FR 72263, Nov. 18, 2015] § 2590.715-2713 Coverage of preventive health services. (a) Services In general. (i) Evidence-based items or services that have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force with respect to the individual involved (except as otherwise provided in paragraph (c) of this section); (ii) Immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved (for this purpose, a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention is considered in effect after it has been adopted by the Director of the Centers for Disease Control and Prevention, and a recommendation is considered to be for routine use if it is listed on the Immunization Schedules of the Centers for Disease Control and Prevention); (iii) With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration; (iv) With respect to women, such additional preventive care and screenings not described in paragraph (a)(1)(i) of this section as provided for in comprehensive guidelines supported by the Health Resources and Services Administration for purposes of section 2713(a)(4) of the Public Health Service Act, subject to 45 CFR 147.131, 147.132, and 147.133; and (v) Any qualifying coronavirus preventive service, which means an item, service, or immunization that is intended to prevent or mitigate coronavirus disease 2019 (COVID-19) and that is, with respect to the individual involved— (A) An evidence-based item or service that has in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force; or (B) An immunization that has in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention (regardless of whether the immunization is recommended for routine use). For purposes of this paragraph (a)(1)(v)(B), a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention is considered in effect after it has been adopted by the Director of the Centers for Disease Control and Prevention. (2) Office visits. (ii) If an item or service described in paragraph (a)(1) of this section is not billed separately (or is not tracked as individual encounter data separately) from an office visit and the primary purpose of the office visit is the delivery of such an item or service, then a plan or issuer may not impose cost-sharing requirements with respect to the office visit. (iii) If an item or service described in paragraph (a)(1) of this section is not billed separately (or is not tracked as individual encounter data separately) from an office visit and the primary purpose of the office visit is not the delivery of such an item or service, then a plan or issuer may impose cost-sharing requirements with respect to the office visit. (iv) The rules of this paragraph (a)(2) are illustrated by the following examples: Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. Example 1. (ii) Conclusion. Example 2, Example 3. (i) Facts. (ii) Conclusion. Example 3, Example 4. (i) Facts. (ii) Conclusion. Example 4, (3) Out-of-network providers. (ii) If a plan or issuer does not have in its network a provider who can provide an item or service described in paragraph (a)(1) of this section, the plan or issuer must cover the item or service when performed by an out-of-network provider, and may not impose cost sharing with respect to the item or service. (iii) A plan or issuer must provide coverage for and must not impose any cost-sharing requirements (such as a copayment, coinsurance, or a deductible) for any qualifying coronavirus preventive service described in paragraph (a)(1)(v) of this section, regardless of whether such service is delivered by an in-network or out-of-network provider. For purposes of this paragraph (a)(3)(iii), with respect to a qualifying coronavirus preventive service and a provider with whom the plan or issuer does not have a negotiated rate for such service (such as an out-of-network provider), the plan or issuer must reimburse the provider for such service in an amount that is reasonable, as determined in comparison to prevailing market rates for such service. (4) Reasonable medical management. (5) Services not described. (b) Timing In general. (2) Changes in recommendations or guidelines. (ii) Notwithstanding paragraph (b)(2)(i) of this section, to the extent a recommendation or guideline described in paragraph (a)(1)(i) of this section that was in effect on the first day of a plan year, or as otherwise provided in paragraph (b)(3) of this section, is downgraded to a “D” rating, or any item or service associated with any recommendation or guideline specified in paragraph (a)(1) of this section is subject to a safety recall or is otherwise determined to pose a significant safety concern by a Federal agency authorized to regulate the item or service during a plan or policy year, there is no requirement under this section to cover these items and services through the last day of the applicable plan or policy year. (3) Rapid coverage of preventive services for coronavirus. (c) Recommendations not current. (d) Applicability date. See (e) Sunset date. [75 FR 41757, July 19, 2010, as amended at 76 FR 46625, Aug. 3, 2011; 78 FR 39894, July 2, 2013; 80 FR 41345, July 14, 2015; 82 FR 47831, 47861, Oct. 13, 2017; 85 FR 71195, Nov. 6, 2020] § 2590.715-2713A Accommodations in connection with coverage of preventive health services. (a) Eligible organizations for optional accommodation. (1) The organization is an objecting entity described in 45 CFR 147.132(a)(1)(i) or (ii), or 45 CFR 147.133(a)(1)(i) or (ii); (2) Notwithstanding its exempt status under 45 CFR 147.132(a) or 147.133(a), the organization voluntarily seeks to be considered an eligible organization to invoke the optional accommodation under paragraph (b) or (c) of this section as applicable; and (3) [Reserved] (4) The organization self-certifies in the form and manner specified by the Secretary or provides notice to the Secretary of the Department of Health and Human Services as described in paragraph (b) or (c) of this section. To qualify as an eligible organization, the organization must make such self-certification or notice available for examination upon request by the first day of the first plan year to which the accommodation in paragraph (b) or (c) of this section applies. The self-certification or notice must be executed by a person authorized to make the certification or provide the notice on behalf of the organization, and must be maintained in a manner consistent with the record retention requirements under section 107 of ERISA. (5) An eligible organization may revoke its use of the accommodation process, and its issuer or third party administrator must provide participants and beneficiaries written notice of such revocation, as specified herein. (i) Transitional rule. (ii) General rule. (b) Optional accommodation—self-insured group health plans. (i) The eligible organization or its plan must contract with one or more third party administrators. (ii) The eligible organization must provide either a copy of the self-certification to each third party administrator or a notice to the Secretary of the Department of Health and Human Services that it is an eligible organization and of its objection as described in 45 CFR 147.132 or 147.133 to coverage of all or a subset of contraceptive services. (A) When a copy of the self-certification is provided directly to a third party administrator, such self-certification must include notice that obligations of the third party administrator are set forth in § 2510.3-16 of this chapter and this section. (B) When a notice is provided to the Secretary of Health and Human Services, the notice must include the name of the eligible organization; a statement that it objects as described in 45 CFR 147.132 or 147.133 to coverage of some or all contraceptive services (including an identification of the subset of contraceptive services to which coverage the eligible organization objects, if applicable), but that it would like to elect the optional accommodation process; the plan name and type (that is, whether it is a student health insurance plan within the meaning of 45 CFR 147.145(a) or a church plan within the meaning of section 3(33) of ERISA); and the name and contact information for any of the plan's third party administrators. If there is a change in any of the information required to be included in the notice, the eligible organization must provide updated information to the Secretary of the Department of Health and Human Services for the optional accommodation process to remain in effect. The Department of Labor (working with the Department of Health and Human Services), will send a separate notification to each of the plan's third party administrators informing the third party administrator that the Secretary of the Department of Health and Human Services has received a notice under paragraph (b)(1)(ii) of this section and describing the obligations of the third party administrator under § 2510.3-16 of this chapter and this section. (2) If a third party administrator receives a copy of the self-certification from an eligible organization or a notification from the Department of Labor, as described in paragraph (b)(1)(ii) of this section, and is willing to enter into or remain in a contractual relationship with the eligible organization or its plan to provide administrative services for the plan, then the third party administrator will provide or arrange payments for contraceptive services, using one of the following methods— (i) Provide payments for the contraceptive services for plan participants and beneficiaries without imposing any cost-sharing requirements (such as a copayment, coinsurance, or a deductible), premium, fee, or other charge, or any portion thereof, directly or indirectly, on the eligible organization, the group health plan, or plan participants or beneficiaries; or (ii) Arrange for an issuer or other entity to provide payments for contraceptive services for plan participants and beneficiaries without imposing any cost-sharing requirements (such as a copayment, coinsurance, or a deductible), premium, fee, or other charge, or any portion thereof, directly or indirectly, on the eligible organization, the group health plan, or plan participants or beneficiaries. (3) If a third party administrator provides or arranges payments for contraceptive services in accordance with either paragraph (b)(2)(i) or (ii) of this section, the costs of providing or arranging such payments may be reimbursed through an adjustment to the Federally facilitated Exchange user fee for a participating issuer pursuant to 45 CFR 156.50(d). (4) A third party administrator may not require any documentation other than a copy of the self-certification from the eligible organization or notification from the Department of Labor described in paragraph (b)(1)(ii) of this section. (5) Where an otherwise eligible organization does not contract with a third party administrator and it files a self-certification or notice under paragraph (b)(1)(ii) of this section, the obligations under paragraph (b)(2) of this section do not apply, and the otherwise eligible organization is under no requirement to provide coverage or payments for contraceptive services to which it objects. The plan administrator for that otherwise eligible organization may, if it and the otherwise eligible organization choose, arrange for payments for contraceptive services from an issuer or other entity in accordance with paragraph (b)(2)(ii) of this section, and such issuer or other entity may receive reimbursements in accordance with paragraph (b)(3) of this section. (c) Optional accommodation—insured group health plans General rule. (i) The eligible organization or its plan must contract with one or more health insurance issuers. (ii) The eligible organization must provide either a copy of the self-certification to each issuer providing coverage in connection with the plan or a notice to the Secretary of the Department of Health and Human Services that it is an eligible organization and of its objection as described in 45 CFR 147.132 or 147.133 to coverage for all or a subset of contraceptive services. (A) When a self-certification is provided directly to an issuer, the issuer has sole responsibility for providing such coverage in accordance with § 2590.715-2713. (B) When a notice is provided to the Secretary of the Department of Health and Human Services, the notice must include the name of the eligible organization; a statement that it objects as described in 45 CFR 147.132 or 147.133 to coverage of some or all contraceptive services (including an identification of the subset of contraceptive services to which coverage the eligible organization objects, if applicable) but that it would like to elect the optional accommodation process; the plan name and type (that is, whether it is a student health insurance plan within the meaning of 45 CFR 147.145(a) or a church plan within the meaning of section 3(33) of ERISA); and the name and contact information for any of the plan's health insurance issuers. If there is a change in any of the information required to be included in the notice, the eligible organization must provide updated information to the Secretary of Department Health and Human Services for the optional accommodation process to remain in effect. The Department of Health and Human Services will send a separate notification to each of the plan's health insurance issuers informing the issuer that the Secretary of Health and Human Services has received a notice under paragraph (c)(2)(ii) of this section and describing the obligations of the issuer under this section. (2) If an issuer receives a copy of the self-certification from an eligible organization or the notification from the Department of Health and Human Services as described in paragraph (c)(2)(ii) of this section and does not have its own objection as described in 45 CFR 147.132 or 147.133 to providing the contraceptive services to which the eligible organization objects, then the issuer will provide payments for contraceptive services as follows— (i) The issuer must expressly exclude contraceptive coverage from the group health insurance coverage provided in connection with the group health plan and provide separate payments for any contraceptive services required to be covered under § 2590.715-2713(a)(1)(iv) for plan participants and beneficiaries for so long as they remain enrolled in the plan. (ii) With respect to payments for contraceptive services, the issuer may not impose any cost-sharing requirements (such as a copayment, coinsurance, or a deductible), or impose any premium, fee, or other charge, or any portion thereof, directly or indirectly, on the eligible organization, the group health plan, or plan participants or beneficiaries. The issuer must segregate premium revenue collected from the eligible organization from the monies used to provide payments for contraceptive services. The issuer must provide payments for contraceptive services in a manner that is consistent with the requirements under sections 2706, 2709, 2711, 2713, 2719, and 2719A of the PHS Act, as incorporated into section 715 of ERISA. If the group health plan of the eligible organization provides coverage for some but not all of any contraceptive services required to be covered under § 2590.715-2713(a)(1)(iv), the issuer is required to provide payments only for those contraceptive services for which the group health plan does not provide coverage. However, the issuer may provide payments for all contraceptive services, at the issuer's option. (3) A health insurance issuer may not require any documentation other than a copy of the self-certification from the eligible organization or the notification from the Department of Health and Human Services described in paragraph (c)(1)(ii) of this section. (d) Notice of availability of separate payments for contraceptive services—self-insured and insured group health plans. (e) Reliance—insured group health plans. (2) A group health plan is considered to comply with any applicable requirement under § 2590.715-2713(a)(1)(iv) to provide contraceptive coverage if the plan complies with its obligations under paragraph (c) of this section, without regard to whether the issuer complies with the obligations under this section applicable to such issuer. (f) Definition. (g) Severability. [82 FR 47831, Oct. 13, 2017, as amended at 82 FR 47861, Oct. 13, 2017; 83 FR 57589, Nov. 15, 2018] § 2590.715-2714 Eligibility of children until at least age 26. (a) In general. (2) The rule of this paragraph (a) is illustrated by the following example: Example. (i) Facts. (ii) Conclusion. Example, (b) Restrictions on plan definition of dependent In general. (2) Construction. (c) Coverage of grandchildren not required. (d) Uniformity irrespective of age. (e) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. (ii) Conclusion. Example 2, Example 3. (i) Facts. (ii) Conclusion. Example 3, Example 4. (i) Facts. (ii) Conclusion. Example 4, Example 4, Example 4 (f) Applicability date. [80 FR 72263, Nov. 18, 2015] § 2590.715-2715 Summary of benefits and coverage and uniform glossary. (a) Summary of benefits and coverage In general. (i) SBC provided by a group health insurance issuer to a group health plan Upon application. (B) By first day of coverage (if there are changes). (C) Upon renewal, reissuance, or reenrollment. ( 1 ( 2 (D) Upon request. (ii) SBC provided by a group health insurance issuer and a group health plan to participants and beneficiaries In general. (B) Upon application. (C) By first day of coverage (if there are changes). 1 ( 2 (D) Special enrollees. (E) Upon renewal, reissuance, or reenrollment. ( 1 ( 2 (F) Upon request. (iii) Special rules to prevent unnecessary duplication with respect to group health coverage. ( 1 ( 2 ( 3 (B) If a single SBC is provided to a participant and any beneficiaries at the participant's last known address, then the requirement to provide the SBC to the participant and any beneficiaries is generally satisfied. However, if a beneficiary's last known address is different than the participant's last known address, a separate SBC is required to be provided to the beneficiary at the beneficiary's last known address. (C) With respect to a group health plan that offers multiple benefit packages, the plan or issuer is required to provide a new SBC automatically to participants and beneficiaries upon renewal or reenrollment only with respect to the benefit package in which a participant or beneficiary is enrolled (or will be automatically re-enrolled under the plan); SBCs are not required to be provided automatically upon renewal or reenrollment with respect to benefit packages in which the participant or beneficiary is not enrolled (or will not automatically be enrolled). However, if a participant or beneficiary requests an SBC with respect to another benefit package (or more than one other benefit package) for which the participant or beneficiary is eligible, the SBC (or SBCs, in the case of a request for SBCs relating to more than one benefit package) must be provided upon request as soon as practicable, but in no event later than seven business days following receipt of the request. (D) Subject to paragraph (a)(2)(ii) of this section, a plan administrator of a group health plan that uses two or more insurance products provided by separate health insurance issuers with respect to a single group health plan may synthesize the information into a single SBC or provide multiple partial SBCs provided that all the SBC include the content in paragraph (a)(2)(iii) of this section. (2) Content In general. (A) Uniform definitions of standard insurance terms and medical terms so that consumers may compare health coverage and understand the terms of (or exceptions to) their coverage, in accordance with guidance as specified by the Secretary; (B) A description of the coverage, including cost sharing, for each category of benefits identified by the Secretary in guidance; (C) The exceptions, reductions, and limitations of the coverage; (D) The cost-sharing provisions of the coverage, including deductible, coinsurance, and copayment obligations; (E) The renewability and continuation of coverage provisions; (F) Coverage examples, in accordance with the rules of paragraph (a)(2)(ii) of this section; (G) With respect to coverage beginning on or after January 1, 2014, a statement about whether the plan or coverage provides minimum essential coverage as defined under section 5000A(f) and whether the plan's or coverage's share of the total allowed costs of benefits provided under the plan or coverage meets applicable requirements; (H) A statement that the SBC is only a summary and that the plan document, policy, certificate, or contract of insurance should be consulted to determine the governing contractual provisions of the coverage; (I) Contact information for questions; (J) For issuers, an Internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained; (K) For plans and issuers that maintain one or more networks of providers, an Internet address (or similar contact information) for obtaining a list of network providers; (L) For plans and issuers that use a formulary in providing prescription drug coverage, an Internet address (or similar contact information) for obtaining information on prescription drug coverage; and (M) An Internet address for obtaining the uniform glossary, as described in paragraph (c) of this section, as well as a contact phone number to obtain a paper copy of the uniform glossary, and a disclosure that paper copies are available. (ii) Coverage examples. (A) Number of examples. (B) Benefits scenarios. (C) Illustration of benefit provided. (iii) Coverage provided outside the United States. (3) Appearance. (ii) A group health plan that utilizes two or more benefit packages (such as major medical coverage and a health flexible spending arrangement) may synthesize the information into a single SBC, or provide multiple SBCs. (4) Form. (A) The format is readily accessible by the plan (or its sponsor); (B) The SBC is provided in paper form free of charge upon request; and (C) If the electronic form is an Internet posting, the issuer timely advises the plan (or its sponsor) in paper form or email that the documents are available on the Internet and provides the Internet address. (ii) An SBC provided by a group health plan or health insurance issuer to a participant or beneficiary may be provided in paper form. Alternatively, the SBC may be provided electronically (such as by email or an Internet posting) if the requirements of this paragraph (a)(4)(ii) are met. (A) With respect to participants and beneficiaries covered under the plan or coverage, the SBC may be provided electronically as described in this paragraph (a)(4)(ii)(A). However, in all cases, the plan or issuer must provide the SBC in paper form if paper form is requested. ( 1 ( 2 ( 3 (B) With respect to participants and beneficiaries who are eligible but not enrolled for coverage, the SBC may be provided electronically if: ( 1 ( 2 ( 3 (5) Language. (b) Notice of modification. (c) Uniform glossary In general. (2) Health-coverage-related terms and medical terms. (i) Allowed amount, appeal, balance billing, co-insurance, complications of pregnancy, co-payment, deductible, durable medical equipment, emergency medical condition, emergency medical transportation, emergency room care, emergency services, excluded services, grievance, habilitation services, health insurance, home health care, hospice services, hospitalization, hospital outpatient care, in-network co-insurance, in-network co-payment, medically necessary, network, non-preferred provider, out-of-network co-insurance, out-of-network co-payment, out-of-pocket limit, physician services, plan, preauthorization, preferred provider, premium, prescription drug coverage, prescription drugs, primary care physician, primary care provider, provider, reconstructive surgery, rehabilitation services, skilled nursing care, specialist, usual customary and reasonable (UCR), and urgent care; and (ii) Such other terms as the Secretary determines are important to define so that individuals and employers may compare and understand the terms of coverage and medical benefits (including any exceptions to those benefits), as specified in guidance. (3) Appearance. (4) Form and manner. (d) Preemption. (e) Failure to provide. (f) Applicability to Medicare Advantage benefits. (g) Applicability date. (i) For disclosures with respect to participants and beneficiaries who enroll or re-enroll through an open enrollment period (including re-enrollees and late enrollees), this section applies beginning on the first day of the first open enrollment period that begins on or after September 1, 2015; and (ii) For disclosures with respect to participants and beneficiaries who enroll in coverage other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees), this section applies beginning on the first day of the first plan year that begins on or after September 1, 2015. (2) For disclosures with respect to plans, this section is applicable to health insurance issuers beginning September 1, 2015. [80 FR 34307, June 16, 2015, as amended at 81 FR 43455, July 1, 2016] § 2590.715-2715A1 Transparency in coverage—definitions. (a) Scope and definitions Scope. (2) Definitions. (i) Accumulated amounts (A) The amount of financial responsibility a participant or beneficiary has incurred at the time a request for cost-sharing information is made, with respect to a deductible or out-of-pocket limit. If an individual is enrolled in other than self-only coverage, these accumulated amounts shall include the financial responsibility a participant or beneficiary has incurred toward meeting his or her individual deductible or out-of-pocket limit, as well as the amount of financial responsibility that all the individuals enrolled under the plan or coverage have incurred, in aggregate, toward meeting the other than self-only deductible or out-of-pocket limit, as applicable. Accumulated amounts include any expense that counts toward a deductible or out-of-pocket limit (such as a copayment or coinsurance), but exclude any expense that does not count toward a deductible or out-of-pocket limit (such as any premium payment, out-of-pocket expense for out-of-network services, or amount for items or services not covered under the group health plan or health insurance coverage); and (B) To the extent a group health plan or health insurance issuer imposes a cumulative treatment limitation on a particular covered item or service (such as a limit on the number of items, days, units, visits, or hours covered in a defined time period) independent of individual medical necessity determinations, the amount that has accrued toward the limit on the item or service (such as the number of items, days, units, visits, or hours the participant or beneficiary, has used within that time period). (ii) Billed charge (iii) Billing code (iv) Bundled payment arrangement (v) Copayment assistance (vi) Cost-sharing liability (vii) Cost-sharing information (viii) Covered items or services (ix) Derived amount (x) Historical net price 3 (xi) In-network provider (xii) Items or services (xiii) Machine-readable file (xiv) National Drug Code (xv) Negotiated rate (xvi) Out-of-network allowed amount (xvii) Out-of-network provider (xviii) Out-of-pocket limit (xix) Plain language (xx) Prerequisite (xxi) Underlying fee schedule rate (b) [Reserved] [85 FR 72300, Nov. 12, 2020] § 2590.715-2715A2 Transparency in coverage—required disclosures to participants and beneficiaries. (a) Scope and definitions Scope. (2) Definitions. (b) Required disclosures to participants and beneficiaries. (1) Required cost-sharing information. (i) An estimate of the participant's or beneficiary's cost-sharing liability for a requested covered item or service furnished by a provider or providers that is calculated based on the information described in paragraphs (b)(1)(ii) through (iv) of this section. (A) If the request for cost-sharing information relates to items and services that are provided within a bundled payment arrangement, and the bundled payment arrangement includes items or services that have a separate cost-sharing liability, the group health plan or health insurance issuer must provide estimates of the cost-sharing liability for the requested covered item or service, as well as an estimate of the cost-sharing liability for each of the items and services in the bundled payment arrangement that have separate cost-sharing liabilities. While group health plans and health insurance issuers are not required to provide estimates of cost-sharing liability for a bundled payment arrangement where the cost-sharing is imposed separately for each item and service included in the bundled payment arrangement, nothing prohibits plans or issuers from providing estimates for multiple items and services in situations where such estimates could be relevant to participants or beneficiaries, as long as the plan or issuer also discloses information about the relevant items or services individually, as required in paragraph (b)(1)(v) of this section. (B) For requested items and services that are recommended preventive services under section 2713 of the Public Health Service Act (PHS Act), if the group health plan or health insurance issuer cannot determine whether the request is for preventive or non-preventive purposes, the plan or issuer must display the cost-sharing liability that applies for non-preventive purposes. As an alternative, a group health plan or health insurance issuer may allow a participant or beneficiary to request cost-sharing information for the specific preventive or non-preventive item or service by including terms such as “preventive”, “non-preventive” or “diagnostic” as a means to request the most accurate cost-sharing information. (ii) Accumulated amounts. (iii) In-network rate, comprised of the following elements, as applicable to the group health plan's or health insurance issuer's payment model: (A) Negotiated rate, reflected as a dollar amount, for an in-network provider or providers for the requested covered item or service; this rate must be disclosed even if it is not the rate the plan or issuer uses to calculate cost-sharing liability; and (B) Underlying fee schedule rate, reflected as a dollar amount, for the requested covered item or service, to the extent that it is different from the negotiated rate. (iv) Out-of-network allowed amount or any other rate that provides a more accurate estimate of an amount a group health plan or health insurance issuer will pay for the requested covered item or service, reflected as a dollar amount, if the request for cost-sharing information is for a covered item or service furnished by an out-of-network provider; provided, however, that in circumstances in which a plan or issuer reimburses an out-of-network provider a percentage of the billed charge for a covered item or service, the out-of-network allowed amount will be that percentage. (v) If a participant or beneficiary requests information for an item or service subject to a bundled payment arrangement, a list of the items and services included in the bundled payment arrangement for which cost-sharing information is being disclosed. (vi) If applicable, notification that coverage of a specific item or service is subject to a prerequisite. (vii) A notice that includes the following information in plain language: (A) A statement that out-of-network providers may bill participants or beneficiaries for the difference between a provider's billed charges and the sum of the amount collected from the group health plan or health insurance issuer and from the participant or beneficiary in the form of a copayment or coinsurance amount (the difference referred to as balance billing), and that the cost-sharing information provided pursuant to this paragraph (b)(1) does not account for these potential additional amounts. This statement is only required if balance billing is permitted under state law; (B) A statement that the actual charges for a participant's or beneficiary's covered item or service may be different from an estimate of cost-sharing liability provided pursuant to paragraph (b)(1)(i) of this section, depending on the actual items or services the participant or beneficiary receives at the point of care; (C) A statement that the estimate of cost-sharing liability for a covered item or service is not a guarantee that benefits will be provided for that item or service; (D) A statement disclosing whether the plan counts copayment assistance and other third-party payments in the calculation of the participant's or beneficiary's deductible and out-of-pocket maximum; (E) For items and services that are recommended preventive services under section 2713 of the PHS Act, a statement that an in-network item or service may not be subject to cost-sharing if it is billed as a preventive service if the group health plan or health insurance issuer cannot determine whether the request is for a preventive or non-preventive item or service; and (F) Any additional information, including other disclaimers, that the group health plan or health insurance issuer determines is appropriate, provided the additional information does not conflict with the information required to be provided by this paragraph (b)(1). (2) Required methods and formats for disclosing information to participants and beneficiaries. (i) Internet-based self-service tool. (A) Search for cost-sharing information for a covered item or service provided by a specific in-network provider or by all in-network providers by inputting: ( 1 ( 2 ( 3 (B) Search for an out-of-network allowed amount, percentage of billed charges, or other rate that provides a reasonably accurate estimate of the amount a group health plan or health insurance issuer will pay for a covered item or service provided by out-of-network providers by inputting: ( 1 ( 2 (C) Refine and reorder search results based on geographic proximity of in-network providers, and the amount of the participant's or beneficiary's estimated cost-sharing liability for the covered item or service, to the extent the search for cost-sharing information for covered items or services returns multiple results. (ii) Paper method. (A) Disclose the applicable provider-per-request limit to the participant or beneficiary; (B) Provide the cost-sharing information in paper form pursuant to the individual's request, in accordance with the requirements in paragraphs (b)(2)(i)(A) through (C) of this section; and (C) Mail the cost-sharing information in paper form no later than 2 business days after an individual's request is received. (D) To the extent participants or beneficiaries request disclosure other than by paper (for example, by phone or email), plans and issuers may provide the disclosure through another means, provided the participant or beneficiary agrees that disclosure through such means is sufficient to satisfy the request and the request is fulfilled at least as rapidly as required for the paper method. (3) Special rule to prevent unnecessary duplication Special rule for insured group health plans. (ii) Other contractual arrangements. (c) Applicability. (2) As provided under § 2590.715-1251, this section does not apply to grandfathered health plans. This section also does not apply to health reimbursement arrangements or other account-based group health plans as defined in § 2590.715-2711(d)(6) or short term limited duration insurance as defined in § 2590.701-2. (3) Nothing in this section alters or otherwise affects a group health plan's or health insurance issuer's duty to comply with requirements under other applicable state or Federal laws, including those governing the accessibility, privacy, or security of information required to be disclosed under this section, or those governing the ability of properly authorized representatives to access participant or beneficiary information held by plans and issuers. (4) A group health plan or health insurance issuer will not fail to comply with this section solely because it, acting in good faith and with reasonable diligence, makes an error or omission in a disclosure required under paragraph (b) of this section, provided that the plan or issuer corrects the information as soon as practicable. (5) A group health plan or health insurance issuer will not fail to comply with this section solely because, despite acting in good faith and with reasonable diligence, its internet website is temporarily inaccessible, provided that the plan or issuer makes the information available as soon as practicable. (6) To the extent compliance with this section requires a group health plan or health insurance issuer to obtain information from any other entity, the plan or issuer will not fail to comply with this section because it relied in good faith on information from the other entity, unless the plan or issuer knows, or reasonably should have known, that the information is incomplete or inaccurate. (d) Severability. [85 FR 72300, Nov. 12, 2020] § 2590.715-2715A3 Transparency in coverage—requirements for public disclosure. (a) Scope and definitions Scope. (2) Definitions. (b) Requirements for public disclosure of in-network provider rates for covered items and services, out-of-network allowed amounts and billed charges for covered items and services, and negotiated rates and historical net prices for covered prescription drugs. (1) Required information. (i) An in-network rate machine-readable file that includes the required information under this paragraph (b)(1)(i) for all covered items and services, except for prescription drugs that are subject to a fee-for-service reimbursement arrangement, which must be reported in the prescription drug machine-readable file pursuant to paragraph (b)(1)(iii) of this section. The in-network rate machine-readable file must include: (A) For each coverage option offered by a group health plan or health insurance issuer, the name and the 14-digit Health Insurance Oversight System (HIOS) identifier, or, if the 14-digit HIOS identifier is not available, the 5-digit HIOS identifier, or if no HIOS identifier is available, the Employer Identification Number (EIN); (B) A billing code, which in the case of prescription drugs must be an NDC, and a plain language description for each billing code for each covered item or service under each coverage option offered by a plan or issuer; and (C) All applicable rates, which may include one or more of the following: Negotiated rates, underlying fee schedule rates, or derived amounts. If a group health plan or health insurance issuer does not use negotiated rates for provider reimbursement, then the plan or issuer should disclose derived amounts to the extent these amounts are already calculated in the normal course of business. If the group health plan or health insurance issuer uses underlying fee schedule rates for calculating cost sharing, then the plan or issuer should include the underlying fee schedule rates in addition to the negotiated rate or derived amount. Applicable rates, including for both individual items and services and items and services in a bundled payment arrangement, must be: ( 1 ( 2 ( 3 ( 4 (ii) An out-of-network allowed amount machine-readable file, including: (A) For each coverage option offered by a group health plan or health insurance issuer, the name and the 14-digit HIOS identifier, or, if the 14-digit HIOS identifier is not available, the 5-digit HIOS identifier, or, if no HIOS identifier is available, the EIN; (B) A billing code, which in the case of prescription drugs must be an NDC, and a plain language description for each billing code for each covered item or service under each coverage option offered by a plan or issuer; and (C) Unique out-of-network allowed amounts and billed charges with respect to covered items or services furnished by out-of-network providers during the 90-day time period that begins 180 days prior to the publication date of the machine-readable file (except that a group health plan or health insurance issuer must omit such data in relation to a particular item or service and provider when compliance with this paragraph (b)(1)(ii)(C) would require the plan or issuer to report payment of out-of-network allowed amounts in connection with fewer than 20 different claims for payments under a single plan or coverage). Consistent with paragraph (c)(3) of this section, nothing in this paragraph (b)(1)(ii)(C) requires the disclosure of information that would violate any applicable health information privacy law. Each unique out-of-network allowed amount must be: ( 1 ( 2 (iii) A prescription drug machine-readable file, including: (A) For each coverage option offered by a group health plan or health insurance issuer, the name and the 14-digit HIOS identifier, or, if the 14-digit HIOS identifier is not available, the 5-digit HIOS identifier, or, if no HIOS identifier is available, the EIN; (B) The NDC, and the proprietary and nonproprietary name assigned to the NDC by the Food and Drug Administration (FDA), for each covered item or service under each coverage option offered by a plan or issuer that is a prescription drug; (C) The negotiated rates which must be: ( 1 ( 2 ( 3 (D) Historical net prices that are: ( 1 ( 2 ( 3 (2) Required method and format for disclosing information to the public. (3) Timing. (4) Special rules to prevent unnecessary duplication Special rule for insured group health plans. (ii) Other contractual arrangements. (iii) Aggregation permitted for out-of-network allowed amounts. (c) Applicability. (2) As provided under § 2590.715-1251, this section does not apply to grandfathered health plans. This section also does not apply to health reimbursement arrangements or other account-based group health plans as defined in § 2590.715-2711(d)(6) or short term limited duration insurance as defined in § 2590.701-2. (3) Nothing in this section alters or otherwise affects a group health plan's or health insurance issuer's duty to comply with requirements under other applicable state or Federal laws, including those governing the accessibility, privacy, or security of information required to be disclosed under this section, or those governing the ability of properly authorized representatives to access participant, or beneficiary information held by plans and issuers. (4) A group health plan or health insurance issuer will not fail to comply with this section solely because it, acting in good faith and with reasonable diligence, makes an error or omission in a disclosure required under paragraph (b) of this section, provided that the plan or issuer corrects the information as soon as practicable. (5) A group health plan or health insurance issuer will not fail to comply with this section solely because, despite acting in good faith and with reasonable diligence, its internet website is temporarily inaccessible, provided that the plan or issuer makes the information available as soon as practicable. (6) To the extent compliance with this section requires a group health plan or health insurance issuer to obtain information from any other entity, the plan or issuer will not fail to comply with this section because it relied in good faith on information from the other entity, unless the plan or issuer knows, or reasonably should have known, that the information is incomplete or inaccurate. (d) Severability. [85 FR 72300, Nov. 12, 2020] § 2590.715-2719 Internal claims and appeals and external review processes. (a) Scope and definitions Scope In general. (ii) Application to grandfathered health plans and health insurance coverage. (2) Definitions. (i) Adverse benefit determination. adverse benefit determination (ii) Appeal (or internal appeal). appeal internal appeal (iii) Claimant. Claimant (iv) External review. External review (v) Final internal adverse benefit determination. final internal adverse benefit determination (vi) Final external review decision. final external review decision (vii) Independent review organization (or IRO). independent review organization IRO (viii) NAIC Uniform Model Act. NAIC Uniform Model Act (b) Internal claims and appeals process In general. (2) Requirements for group health plans and group health insurance issuers. (i) Minimum internal claims and appeals standards. (ii) Additional standards. (A) Clarification of meaning of adverse benefit determination. (B) Expedited notification of benefit determinations involving urgent care. (C) Full and fair review. ( 1 ( 2 (D) Avoiding conflicts of interest. (E) Notice. ( 1 ( 2 ( 3 ( 4 ( 5 (F) Deemed exhaustion of internal claims and appeals processes. 1 2 ( 2 1 de minimis 1 2 (iii) Requirement to provide continued coverage pending the outcome of an appeal. (c) State standards for external review In general. (ii) To the extent that a group health plan provides benefits other than through health insurance coverage (that is, the plan is self-insured) and is subject to a State external review process that applies to and is binding on the plan (for example, is not preempted by ERISA) and the State external review process includes at a minimum the consumer protections in the NAIC Uniform Model Act, then the plan must comply with the applicable State external review process and is not required to comply with the Federal external review process of paragraph (d) of this section. Where a self-insured plan is not subject to an applicable State external review process, but the State has chosen to expand access to its process for plans that are not subject to the applicable State laws, the plan may choose to comply with either the applicable State external review process or the Federal external review process of paragraph (d) of this section. (iii) If a plan or issuer is not required under paragraph (c)(1)(i) or (c)(1)(ii) of this section to comply with the requirements of this paragraph (c), then the plan or issuer must comply with the Federal external review process of paragraph (d) of this section, except to the extent, in the case of a plan, the plan is not required under paragraph (c)(1)(i) of this section to comply with paragraph (d) of this section. (2) Minimum standards for State external review processes. (i) The State process must provide for the external review of adverse benefit determinations (including final internal adverse benefit determinations) by issuers (or, if applicable, plans) that are based on the issuer's (or plan's) requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit, as well as a consideration of whether a plan or issuer is complying with the surprise billing and cost-sharing protections under ERISA sections 716 and 717 and §§ 2590.716-4 through 2590.716-5 and 2590.717-1. (ii) The State process must require issuers (or, if applicable, plans) to provide effective written notice to claimants of their rights in connection with an external review for an adverse benefit determination. (iii) To the extent the State process requires exhaustion of an internal claims and appeals process, exhaustion must be unnecessary where the issuer (or, if applicable, the plan) has waived the requirement; the issuer (or the plan) is considered to have exhausted the internal claims and appeals process under applicable law (including by failing to comply with any of the requirements for the internal appeal process, as outlined in paragraph (b)(2) of this section), or the claimant has applied for expedited external review at the same time as applying for an expedited internal appeal. (iv) The State process provides that the issuer (or, if applicable, the plan) against which a request for external review is filed must pay the cost of the IRO for conducting the external review. Notwithstanding this requirement, a State external review process that expressly authorizes, as of November 18, 2015, a nominal filing fee may continue to permit such fees. For this purpose, to be considered nominal, a filing fee must not exceed $25; it must be refunded to the claimant if the adverse benefit determination (or final internal adverse benefit determination) is reversed through external review; it must be waived if payment of the fee would impose an undue financial hardship; and the annual limit on filing fees for any claimant within a single plan year must not exceed $75. (v) The State process may not impose a restriction on the minimum dollar amount of a claim for it to be eligible for external review. Thus, the process may not impose, for example, a $500 minimum claims threshold. (vi) The State process must allow at least four months after the receipt of a notice of an adverse benefit determination or final internal adverse benefit determination for a request for an external review to be filed. (vii) The State process must provide that IROs will be assigned on a random basis or another method of assignment that assures the independence and impartiality of the assignment process (such as rotational assignment) by a State or independent entity, and in no event selected by the issuer, plan, or the individual. (viii) The State process must provide for maintenance of a list of approved IROs qualified to conduct the external review based on the nature of the health care service that is the subject of the review. The State process must provide for approval only of IROs that are accredited by a nationally recognized private accrediting organization. (ix) The State process must provide that any approved IRO has no conflicts of interest that will influence its independence. Thus, the IRO may not own or control, or be owned or controlled by a health insurance issuer, a group health plan, the sponsor of a group health plan, a trade association of plans or issuers, or a trade association of health care providers. The State process must further provide that the IRO and the clinical reviewer assigned to conduct an external review may not have a material professional, familial, or financial conflict of interest with the issuer or plan that is the subject of the external review; the claimant (and any related parties to the claimant) whose treatment is the subject of the external review; any officer, director, or management employee of the issuer; the plan administrator, plan fiduciaries, or plan employees; the health care provider, the health care provider's group, or practice association recommending the treatment that is subject to the external review; the facility at which the recommended treatment would be provided; or the developer or manufacturer of the principal drug, device, procedure, or other therapy being recommended. (x) The State process allows the claimant at least five business days to submit to the IRO in writing additional information that the IRO must consider when conducting the external review, and it requires that the claimant is notified of the right to do so. The process must also require that any additional information submitted by the claimant to the IRO must be forwarded to the issuer (or, if applicable, the plan) within one business day of receipt by the IRO. (xi) The State process must provide that the decision is binding on the plan or issuer, as well as the claimant except to the extent the other remedies are available under State or Federal law, and except that the requirement that the decision be binding shall not preclude the plan or issuer from making payment on the claim or otherwise providing benefits at any time, including after a final external review decision that denies the claim or otherwise fails to require such payment or benefits. For this purpose, the plan or issuer must provide benefits (including by making payment on the claim) pursuant to the final external review decision without delay, regardless of whether the plan or issuer intends to seek judicial review of the external review decision and unless or until there is a judicial decision otherwise. (xii) The State process must require, for standard external review, that the IRO provide written notice to the issuer (or, if applicable, the plan) and the claimant of its decision to uphold or reverse the adverse benefit determination (or final internal adverse benefit determination) within no more than 45 days after the receipt of the request for external review by the IRO. (xiii) The State process must provide for an expedited external review if the adverse benefit determination (or final internal adverse benefit determination) concerns an admission, availability of care, continued stay, or health care service for which the claimant received emergency services, but has not been discharged from a facility; or involves a medical condition for which the standard external review time frame would seriously jeopardize the life or health of the claimant or jeopardize the claimant's ability to regain maximum function. As expeditiously as possible but within no more than 72 hours after the receipt of the request for expedited external review by the IRO, the IRO must make its decision to uphold or reverse the adverse benefit determination (or final internal adverse benefit determination) and notify the claimant and the issuer (or, if applicable, the plan) of the determination. If the notice is not in writing, the IRO must provide written confirmation of the decision within 48 hours after the date of the notice of the decision. (xiv) The State process must require that issuers (or, if applicable, plans) include a description of the external review process in or attached to the summary plan description, policy, certificate, membership booklet, outline of coverage, or other evidence of coverage it provides to participants, beneficiaries, or enrollees, substantially similar to what is set forth in section 17 of the NAIC Uniform Model Act. (xv) The State process must require that IROs maintain written records and make them available upon request to the State, substantially similar to what is set forth in section 15 of the NAIC Uniform Model Act. (xvi) The State process follows procedures for external review of adverse benefit determinations (or final internal adverse benefit determinations) involving experimental or investigational treatment, substantially similar to what is set forth in section 10 of the NAIC Uniform Model Act. (3) Transition period for external review processes. (ii) An applicable State external review process must apply for final internal adverse benefit determinations (or, in the case of simultaneous internal appeal and external review, adverse benefit determinations) provided on or after January 1, 2018. The Federal external review process will apply to such internal adverse benefit determinations unless the Department of Health and Human Services determines that a State law meets all the minimum standards of paragraph (c)(2) of this section. Through December 31, 2017, a State external review process applicable to a health insurance issuer or group health plan may be considered to meet the minimum standards of paragraph (c)(2) of this section, if it meets the temporary standards established by the Secretary in guidance for a process similar to the NAIC Uniform Model Act. (d) Federal external review process. (1) Scope In general. (A) An adverse benefit determination (including a final internal adverse benefit determination) by a plan or issuer that involves medical judgment (including, but not limited to, those based on the plan's or issuer's requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit; its determination that a treatment is experimental or investigational; its determination whether a participant or beneficiary is entitled to a reasonable alternative standard for a reward under a wellness program; its determination whether a plan or issuer is complying with the nonquantitative treatment limitation provisions of ERISA section 712 and § 2590.712, which generally require, among other things, parity in the application of medical management techniques), as determined by the external reviewer. (A denial, reduction, termination, or a failure to provide payment for a benefit based on a determination that a participant or beneficiary fails to meet the requirements for eligibility under the terms of a group health plan or health insurance coverage is not eligible for the Federal external review process under this paragraph (d)); (B) An adverse benefit determination that involves consideration of whether a plan or issuer is complying with the surprise billing and cost-sharing protections set forth in ERISA sections 716 and 717 and §§ 2590.716-4 through 2590.716-5 and 2590.717-1; and (C) A rescission of coverage (whether or not the rescission has any effect on any particular benefit at that time). (ii) Examples. Example 1. (i) Facts. A A' A (ii) Conclusion. Example 1, 3 Example 2. (i) Facts. B B B (ii) Conclusion. Example 2, 3 Example 3. (i) Facts. C C (ii) Conclusion. Example 3, C Example 4. (i) Facts. D D (ii) Conclusion. Example 4, Example 5. (i) Facts. E E E (ii) Conclusion. Example 5, E Example 6. (i) Facts. F F (ii) Conclusion. Example 6, F Example 7. (i) Facts. G G (ii) Conclusion. Example 7, (2) External review process standards. (i) Request for external review. (ii) Preliminary review In general. ( 1 ( 2 ( 3 ( 4 (B) Within one business day after completion of the preliminary review, the plan or issuer must issue a notification in writing to the claimant. If the request is complete but not eligible for external review, such notification must include the reasons for its ineligibility and current contact information, including the phone number, for the Employee Benefits Security Administration. If the request is not complete, such notification must describe the information or materials needed to make the request complete, and the plan or issuer must allow a claimant to perfect the request for external review within the four-month filing period or within the 48 hour period following the receipt of the notification, whichever is later. (iii) Referral to Independent Review Organization In general. ( 1 ( 2 ( 3 ( 4 (B) IRO contracts. ( 1 ( 2 ( 3 ( 4 ( 5 ( i ( ii ( iii ( iv ( v ( vi ( vii ( 6 ( 7 ( i ( ii ( iii ( iv ( v ( vi ( vii ( viii ( iv Reversal of plan's or issuer's decision. (3) Expedited external review. (i) Request for external review. (A) An adverse benefit determination if the adverse benefit determination involves a medical condition of the claimant for which the timeframe for completion of an expedited internal appeal under paragraph (b) of this section would seriously jeopardize the life or health of the claimant or would jeopardize the claimant's ability to regain maximum function and the claimant has filed a request for an expedited internal appeal; or (B) A final internal adverse benefit determination, if the claimant has a medical condition where the timeframe for completion of a standard external review would seriously jeopardize the life or health of the claimant or would jeopardize the claimant's ability to regain maximum function, or if the final internal adverse benefit determination concerns an admission, availability of care, continued stay, or health care item or service for which the claimant received emergency services, but has not been discharged from the facility. (ii) Preliminary review. (iii) Referral to independent review organization. (B) The assigned IRO, to the extent the information or documents are available and the IRO considers them appropriate, must consider the information or documents described above under the procedures for standard review. In reaching a decision, the assigned IRO must review the claim de novo and is not bound by any decisions or conclusions reached during the plan's or issuer's internal claims and appeals process. (iv) Notice of final external review decision. (4) Alternative, Federally-administered external review process. (e) Form and manner of notice In general. (2) Requirements. (ii) The plan or issuer must provide, upon request, a notice in any applicable non-English language; and (iii) The plan or issuer must include in the English versions of all notices, a statement prominently displayed in any applicable non-English language clearly indicating how to access the language services provided by the plan or issuer. (3) Applicable non-English language. (f) Secretarial authority. (g) Applicability date. [80 FR 72264, Nov. 18, 2015, as amended at 86 FR 56110, Oct. 7, 2021] § 2590.715-2719A Patient protections. (a) Choice of health care professional Designation of primary care provider In general. (ii) Construction. (iii) Example. Example. (i) Facts. (ii) Conclusion. Example, (2) Designation of pediatrician as primary care provider In general. (ii) Construction. (iii) Examples. Example 1. (i) Facts. A B A' B (ii) Conclusion. Example 1, A' B A' Example 2. (i) Facts. Example 1, A A' B B A' (ii) Conclusion. Example 2, A' (3) Patient access to obstetrical and gynecological care General rights Direct access. (B) Obstetrical and gynecological care. (ii) Application of paragraph. (A) Provides coverage for obstetrical or gynecological care; and (B) Requires the designation by a participant or beneficiary of a participating primary care provider. (iii) Construction. (A) Waive any exclusions of coverage under the terms and conditions of the plan or health insurance coverage with respect to coverage of obstetrical or gynecological care; or (B) Preclude the group health plan or health insurance issuer involved from requiring that the obstetrical or gynecological provider notify the primary care health care professional or the plan or issuer of treatment decisions. (iv) Examples. Example 1. (i) Facts. A, B, A' (ii) Conclusion. Example 1, A' Example 2. (i) Facts. Example 1 A C, (ii) Conclusion. Example 2, C Example 3. (i) Facts. Example 1 B A' (ii) Conclusion. Example 3, A B Example 4. (i) Facts. (ii) Conclusion. Example 4, (4) Notice of right to designate a primary care provider In general. (A) Under paragraph (a)(1)(i) of this section, that any participating primary care provider who is available to accept the participant or beneficiary can be designated; (B) Under paragraph (a)(2)(i) of this section, with respect to a child, that any participating physician who specializes in pediatrics can be designated as the primary care provider; and (C) Under paragraph (a)(3)(i) of this section, that the plan may not require authorization or referral for obstetrical or gynecological care by a participating health care professional who specializes in obstetrics or gynecology. (ii) Timing. (iii) Model language. (A) For plans and issuers that require or allow for the designation of primary care providers by participants or beneficiaries, insert: [Name of group health plan or health insurance issuer] generally [requires/allows] the designation of a primary care provider. You have the right to designate any primary care provider who participates in our network and who is available to accept you or your family members. [If the plan or health insurance coverage designates a primary care provider automatically, insert: Until you make this designation, [name of group health plan or health insurance issuer] designates one for you.] For information on how to select a primary care provider, and for a list of the participating primary care providers, contact the [plan administrator or issuer] at [insert contact information]. (B) For plans and issuers that require or allow for the designation of a primary care provider for a child, add: For children, you may designate a pediatrician as the primary care provider. (C) For plans and issuers that provide coverage for obstetric or gynecological care and require the designation by a participant or beneficiary of a primary care provider, add: You do not need prior authorization from [name of group health plan or issuer] or from any other person (including a primary care provider) in order to obtain access to obstetrical or gynecological care from a health care professional in our network who specializes in obstetrics or gynecology. The health care professional, however, may be required to comply with certain procedures, including obtaining prior authorization for certain services, following a pre-approved treatment plan, or procedures for making referrals. For a list of participating health care professionals who specialize in obstetrics or gynecology, contact the [plan administrator or issuer] at [insert contact information]. (b) Coverage of emergency services Scope. (2) General rules. (i) Without the need for any prior authorization determination, even if the emergency services are provided on an out-of-network basis; (ii) Without regard to whether the health care provider furnishing the emergency services is a participating network provider with respect to the services; (iii) If the emergency services are provided out of network, without imposing any administrative requirement or limitation on coverage that is more restrictive than the requirements or limitations that apply to emergency services received from in-network providers; (iv) If the emergency services are provided out of network, by complying with the cost-sharing requirements of paragraph (b)(3) of this section; and (v) Without regard to any other term or condition of the coverage, other than— (A) The exclusion of or coordination of benefits; (B) An affiliation or waiting period permitted under part 7 of ERISA, part A of title XXVII of the PHS Act, or chapter 100 of the Internal Revenue Code; or (C) Applicable cost sharing. (3) Cost-sharing requirements Copayments and coinsurance. (A) The amount negotiated with in-network providers for the emergency service furnished, excluding any in-network copayment or coinsurance imposed with respect to the participant or beneficiary. If there is more than one amount negotiated with in-network providers for the emergency service, the amount described under this paragraph (b)(3)(i)(A) is the median of these amounts, excluding any in-network copayment or coinsurance imposed with respect to the participant or beneficiary. In determining the median described in the preceding sentence, the amount negotiated with each in-network provider is treated as a separate amount (even if the same amount is paid to more than one provider). If there is no per-service amount negotiated with in-network providers (such as under a capitation or other similar payment arrangement), the amount under this paragraph (b)(3)(i)(A) is disregarded. (B) The amount for the emergency service calculated using the same method the plan generally uses to determine payments for out-of-network services (such as the usual, customary, and reasonable amount), excluding any in-network copayment or coinsurance imposed with respect to the participant or beneficiary. The amount in this paragraph (b)(3)(i)(B) is determined without reduction for out-of-network cost sharing that generally applies under the plan or health insurance coverage with respect to out-of-network services. Thus, for example, if a plan generally pays 70 percent of the usual, customary, and reasonable amount for out-of-network services, the amount in this paragraph (b)(3)(i)(B) for an emergency service is the total (that is, 100 percent) of the usual, customary, and reasonable amount for the service, not reduced by the 30 percent coinsurance that would generally apply to out-of-network services (but reduced by the in-network copayment or coinsurance that the individual would be responsible for if the emergency service had been provided in-network). (C) The amount that would be paid under Medicare (part A or part B of title XVIII of the Social Security Act, 42 U.S.C. 1395 et seq. (ii) Other cost sharing. (iii) Special rules regarding out-of-network minimum payment standards. (B) A group health plan and health insurance issuer must provide a participant or beneficiary adequate and prominent notice of their lack of financial responsibility with respect to the amounts described under this paragraph (b)(3)(iii), to prevent inadvertent payment by the participant or beneficiary. (iv) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 1, Example 2. (i) Facts. (ii) Conclusion. Example 2, Example 3. (i) Facts. (ii) Conclusion. Example 3, Example 4. (i) Facts. Example 3. (ii) Conclusion. Example 4, Example 5. (i) Facts. Example 4. (ii) Conclusion. Example 5, Example 6. (i) Facts. Example 5. (ii) Conclusion. Example 6, (4) Definitions. (i) Emergency medical condition. emergency medical condition (ii) Emergency services. emergency services (A) A medical screening examination (as required under section 1867 of the Social Security Act, 42 U.S.C. 1395dd) that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate such emergency medical condition, and (B) Such further medical examination and treatment, to the extent they are within the capabilities of the staff and facilities available at the hospital, as are required under section 1867 of the Social Security Act (42 U.S.C. 1395dd) to stabilize the patient. (iii) Stabilize. to stabilize, (c) Applicability date. See also [80 FR 72270, Nov. 18, 2015, as amended at 86 FR 36959, July 13, 2021] Subpart D—Surprise Billing and Transparency Requirements Source: 86 FR 36959, July 13, 2021, unless otherwise noted. § 2590.716-1 Basis and scope. (a) Basis. (b) Scope. [86 FR 36959, July 13, 2021, as amended at 86 FR 56111, Oct. 7, 2021; 86 FR 66699, Nov. 23, 2021] § 2590.716-2 Applicability. (a) In general. (2) The requirements in §§ 2590.716-8 and 2590.717-2 apply to certified IDR entities and group health plans and health insurance issuers offering group health insurance coverage (including grandfathered health plans as defined in § 2590.715-1251) except as specified in paragraph (b) of this section. (b) Exceptions. (1) Excepted benefits as described in § 2590.732. (2) Short-term, limited-duration insurance as defined in § 2590.701-2. (3) Health reimbursement arrangements or other account-based group health plans as described in § 2590.715-2711(d). [86 FR 36959, July 13, 2021, as amended at 86 FR 66699, Nov. 23, 2021] § 2590.716-3 Definitions. The definitions in this part apply to §§ 2590.716 through 2590.722, unless otherwise specified. In addition, for purposes of §§ 2590.716 through 2590.722, the following definitions apply: Air ambulance service Bundled payment arrangement (1) A provider, facility, or provider of air ambulance services bills for multiple items or services furnished to a single patient under a single service code that represents multiple items or services (for example, a Diagnosis-Related Group (DRG) code); or (2) A plan or issuer makes an initial payment or notice of denial of payment to a provider, facility, or provider of air ambulance services under a single service code that represents multiple items or services furnished to a single patient (for example, a DRG code). Cost sharing Emergency department of a hospital Emergency medical condition Emergency services Health care facility, (1) A hospital (as defined in section 1861(e) of the Social Security Act); (2) A hospital outpatient department; (3) A critical access hospital (as defined in section 1861(mm)(1) of the Social Security Act); and (4) An ambulatory surgical center described in section 1833(i)(1)(A) of the Social Security Act. Independent freestanding emergency department (1) Is geographically separate and distinct and licensed separately from a hospital under applicable State law; and (2) Provides any emergency services as described in § 2590.716-4(c)(2)(i). Nonparticipating emergency facility Nonparticipating provider Notice of denial of payment Out-of-network rate (1) Subject to paragraph (3) of this definition, in a State that has in effect a specified State law, the amount determined in accordance with such law; (2) Subject to paragraph (3) of this definition, in a State that does not have in effect a specified State law— (i) Subject to paragraph (2)(ii) of this definition, if the nonparticipating provider or nonparticipating emergency facility and the plan or issuer agree on an amount of payment (including if the amount agreed upon is the initial payment sent by the plan or issuer under 26 CFR 54.9816-4T(b)(3)(iv)(A), 54.9816-5T(c)(3), or 54.9817-1T(b)(4)(i); § 2590.716-4(b)(3)(iv)(A), § 2590.716-5(c)(3), or § 2590.717-1(b)(4)(i); or 45 CFR 149.110(b)(3)(iv)(A), 149.120(c)(3), or 149.130(b)(4)(i), as applicable, or is agreed on through negotiations with respect to such item or service), such agreed on amount; or (ii) If the nonparticipating provider or nonparticipating emergency facility and the plan or issuer enter into the independent dispute resolution (IDR) process under section 9816(c) or 9817(b) of the Internal Revenue Code, section 716(c) or 717(b) of ERISA, or section 2799A-1(c) or 2799A-2(b) of the PHS Act, as applicable, and do not agree before the date on which a certified IDR entity makes a determination with respect to such item or service under such subsection, the amount of such determination; or (3) In a State that has an All-Payer Model Agreement under section 1115A of the Social Security Act that applies with respect to the plan or issuer; the nonparticipating provider or nonparticipating emergency facility; and the item or service, the amount that the State approves under the All-Payer Model Agreement for the item or service. Participating emergency facility Participating health care facility Participating provider Physician or health care provider Provider of air ambulance services Same or similar item or service Service code Qualifying payment amount Recognized amount (1) Subject to paragraph (3) of this definition, in a State that has in effect a specified State law, the amount determined in accordance with such law. (2) Subject to paragraph (3) of this definition, in a State that does not have in effect a specified State law, the lesser of— (i) The amount that is the qualifying payment amount (as determined in accordance with § 2590.716-6); or (ii) The amount billed by the provider or facility. (3) In a State that has an All-Payer Model Agreement under section 1115A of the Social Security Act that applies with respect to the plan or issuer; the nonparticipating provider or nonparticipating emergency facility; and the item or service, the amount that the State approves under the All-Payer Model Agreement for the item or service. Specified State law State Treating provider Visit, [86 FR 36959, July 13, 2021, as amended at 91 FR 34059, June 4, 2026] § 2590.716-4 Preventing surprise medical bills for emergency services. (a) In general. (b) Coverage requirements. (1) Without the need for any prior authorization determination, even if the services are provided on an out-of-network basis. (2) Without regard to whether the health care provider furnishing the emergency services is a participating provider or a participating emergency facility, as applicable, with respect to the services. (3) If the emergency services are provided by a nonparticipating provider or a nonparticipating emergency facility— (i) Without imposing any administrative requirement or limitation on coverage that is more restrictive than the requirements or limitations that apply to emergency services received from participating providers and participating emergency facilities. (ii) Without imposing cost-sharing requirements that are greater than the requirements that would apply if the services were provided by a participating provider or a participating emergency facility. (iii) By calculating the cost-sharing requirement as if the total amount that would have been charged for the services by such participating provider or participating emergency facility were equal to the recognized amount for such services. (iv) The plan or issuer— (A) Not later than 30 calendar days after the bill for the services is transmitted by the provider or facility (or, in cases where the recognized amount is determined by a specified State law or All-Payer Model Agreement, such other timeframe as specified by the State law or All-Payer Model Agreement), determines whether the services are covered under the plan or coverage and, if the services are covered, sends to the provider or facility, as applicable, an initial payment or a notice of denial of payment. For purposes of this paragraph (b)(3)(iv)(A), the 30-calendar-day period begins on the date the plan or issuer receives the information necessary to decide a claim for payment for the services. (B) Pays a total plan or coverage payment directly to the nonparticipating provider or nonparticipating facility that is equal to the amount by which the out-of-network rate for the services exceeds the cost-sharing amount for the services (as determined in accordance with paragraphs (b)(3)(ii) and (iii) of this section), less any initial payment amount made under paragraph (b)(3)(iv)(A) of this section. The total plan or coverage payment must be made in accordance with the timing requirement described in section 716(c)(6) of ERISA, or in cases where the out-of-network rate is determined under a specified State law or All-Payer Model Agreement, such other timeframe as specified by the State law or All-Payer Model Agreement. (v) By counting any cost-sharing payments made by the participant or beneficiary with respect to the emergency services toward any in-network deductible or in-network out-of-pocket maximums (including the annual limitation on cost sharing under section 2707(b) of the PHS Act) (as applicable) applied under the plan or coverage (and the in-network deductible and in-network out-of-pocket maximums must be applied) in the same manner as if the cost-sharing payments were made with respect to emergency services furnished by a participating provider or a participating emergency facility. (4) Without limiting what constitutes an emergency medical condition (as defined in paragraph (c)(1) of this section) solely on the basis of diagnosis codes. (5) Without regard to any other term or condition of the coverage, other than— (i) The exclusion or coordination of benefits (to the extent not inconsistent with benefits for an emergency medical condition, as defined in paragraph (c)(1) of this section). (ii) An affiliation or waiting period (each as defined in § 2590.701-2). (iii) Applicable cost sharing. (c) Definitions. (1) Emergency medical condition (2) Emergency services (i) In general. (B) Within the capabilities of the staff and facilities available at the hospital or the independent freestanding emergency department, as applicable, such further medical examination and treatment as are required under section 1867 of the Social Security Act (42 U.S.C. 1395dd), or as would be required under such section if such section applied to an independent freestanding emergency department, to stabilize the patient (regardless of the department of the hospital in which such further examination or treatment is furnished). (ii) Inclusion of additional services. ( 1 ( 2 (B) Items and services described in paragraph (c)(2)(ii)(A) of this section are not included as emergency services if all of the conditions in 45 CFR 149.410(b) are met. (3) To stabilize, (d) Applicability date. § 2590.716-5 Preventing surprise medical bills for non-emergency services performed by nonparticipating providers at certain participating facilities. (a) In general. (b) Items and services described. (c) Coverage requirements. (1) Must not impose a cost-sharing requirement for the items and services that is greater than the cost-sharing requirement that would apply if the items or services had been furnished by a participating provider. (2) Must calculate the cost-sharing requirements as if the total amount that would have been charged for the items and services by such participating provider were equal to the recognized amount for the items and services. (3) Not later than 30 calendar days after the bill for the items or services is transmitted by the provider (or in cases where the recognized amount is determined by a specified State law or All-Payer Model Agreement, such other timeframe as specified under the State law or All-Payer Model Agreement), must determine whether the items and services are covered under the plan or coverage and, if the items and services are covered, send to the provider an initial payment or a notice of denial of payment. For purposes of this paragraph (c)(3), the 30-calendar-day period begins on the date the plan or issuer receives the information necessary to decide a claim for payment for the items or services. (4) Must pay a total plan or coverage payment directly to the nonparticipating provider that is equal to the amount by which the out-of-network rate for the items and services involved exceeds the cost-sharing amount for the items and services (as determined in accordance with paragraphs (c)(1) and (2) of this section), less any initial payment amount made under paragraph (c)(3) of this section. The total plan or coverage payment must be made in accordance with the timing requirement described in section 716(c)(6) of ERISA, or in cases where the out-of-network rate is determined under a specified State law or All-Payer Model Agreement, such other timeframe as specified by the State law or All-Payer Model Agreement. (5) Must count any cost-sharing payments made by the participant or beneficiary toward any in-network deductible and in-network out-of-pocket maximums (including the annual limitation on cost sharing under section 2707(b) of the PHS Act) (as applicable) applied under the plan or coverage (and the in-network deductible and out-of-pocket maximums must be applied) in the same manner as if such cost-sharing payments were made with respect to items and services furnished by a participating provider. (d) Applicability date. § 2590.716-6 Methodology for calculating qualifying payment amount. (a) Definitions. (1) Contracted rate (2) Derived amount (3) Eligible database (i) A State all-payer claims database; or (ii) Any third-party database which— (A) Is not affiliated with, or owned or controlled by, any health insurance issuer, or a health care provider, facility, or provider of air ambulance services (or any member of the same controlled group as, or under common control with, such an entity). For purposes of this paragraph (a)(3)(ii)(A), the term controlled group means a group of two or more persons that is treated as a single employer under sections 52(a), 52(b), 414(m), or 414(o) of the Internal Revenue Code of 1986, as amended; (B) Has sufficient information reflecting in-network amounts paid by group health plans or health insurance issuers offering group health insurance coverage to providers, facilities, or providers of air ambulance services for relevant items and services furnished in the applicable geographic region; and (C) Has the ability to distinguish amounts paid to participating providers and facilities by commercial payers, such as group health plans and health insurance issuers offering group health insurance coverage, from all other claims data, such as amounts billed by nonparticipating providers or facilities and amounts paid by public payers, including the Medicare program under title XVIII of the Social Security Act, the Medicaid program under title XIX of the Social Security Act (or a demonstration project under title XI of the Social Security Act), or the Children's Health Insurance Program under title XXI of the Social Security Act. (4) Facility of the same or similar facility type (i) An emergency department of a hospital; or (ii) An independent freestanding emergency department. (5) First coverage year (6) First sufficient information year (i) In the case of an item or service for which the plan or coverage does not have sufficient information to calculate the median of the contracted rates described in paragraph (b) of this section in 2019, the first year after 2022 for which the plan or issuer has sufficient information to calculate the median of such contracted rates in the year immediately preceding that first year after 2022; and (ii) In the case of a newly covered item or service, the first year after the first coverage year for such item or service with respect to such plan or coverage for which the plan or issuer has sufficient information to calculate the median of the contracted rates described in paragraph (b) of this section in the year immediately preceding that first year. (7) Geographic region (i) For items and services other than air ambulance services— (A) Subject to paragraphs (a)(7)(i)(B) and (C) of this section, one region for each metropolitan statistical area, as described by the U.S. Office of Management and Budget and published by the U.S. Census Bureau, in a State, and one region consisting of all other portions of the State. (B) If a plan or issuer does not have sufficient information to calculate the median of the contracted rates described in paragraph (b) of this section for an item or service provided in a geographic region described in paragraph (a)(7)(i)(A) of this section, one region consisting of all metropolitan statistical areas, as described by the U.S. Office of Management and Budget and published by the U.S. Census Bureau, in the State, and one region consisting of all other portions of the State. (C) If a plan or issuer does not have sufficient information to calculate the median of the contracted rates described in paragraph (b) of this section for an item or service provided in a geographic region described in paragraph (a)(7)(i)(B) of this section, one region consisting of all metropolitan statistical areas, as described by the U.S. Office of Management and Budget and published by the U.S. Census Bureau, in each Census division and one region consisting of all other portions of the Census division, as described by the U.S. Census Bureau. (ii) For air ambulance services— (A) Subject to paragraph (a)(7)(ii)(B) of this section, one region consisting of all metropolitan statistical areas, as described by the U.S. Office of Management and Budget and published by the U.S. Census Bureau, in the State, and one region consisting of all other portions of the State, determined based on the point of pick-up (as defined in 42 CFR 414.605). (B) If a plan or issuer does not have sufficient information to calculate the median of the contracted rates described in paragraph (b) of this section for an air ambulance service provided in a geographic region described in paragraph (a)(7)(ii)(A) of this section, one region consisting of all metropolitan statistical areas, as described by the U.S. Office of Management and Budget and published by the U.S. Census Bureau, in each Census division and one region consisting of all other portions of the Census division, as described by the U.S. Census Bureau, determined based on the point of pick-up (as defined in 42 CFR 414.605). (8) Insurance market (i) The individual market (other than short-term, limited-duration insurance or individual health insurance coverage that consists solely of excepted benefits). (ii) The large group market (other than coverage that consists solely of excepted benefits). (iii) The small group market (other than coverage that consists solely of excepted benefits). (iv) In the case of a self-insured group health plan, all self-insured group health plans (other than account-based plans, as defined in § 2590.715-2711(d)(6)(i), and plans that consist solely of excepted benefits) of the same plan sponsor, or at the option of the plan sponsor, all self-insured group health plans administered by the same entity (including a third-party administrator contracted by the plan), to the extent otherwise permitted by law, that is responsible for calculating the qualifying payment amount on behalf of the plan. (9) Modifiers (10) Newly covered item or service (11) New service code (12) Provider in the same or similar specialty (13) Same or similar item or service (14) Service code (15) Sufficient information (i) The plan or issuer has at least three contracted rates on January 31, 2019, to calculate the median of the contracted rates in accordance with paragraph (b) of this section; or (ii) For an item or service furnished during a year after 2022 that is used to determine the first sufficient information year— (A) The plan or issuer has at least three contracted rates on January 31 of the year immediately preceding that year to calculate the median of the contracted rates in accordance with paragraph (b) of this section; and (B) The contracted rates under paragraph (a)(15)(ii)(A) of this section account (or are reasonably expected to account) for at least 25 percent of the total number of claims paid for that item or service for that year with respect to all plans of the sponsor (or the administering entity as provided in paragraph (a)(8)(iv) of this section, if applicable) or all coverage offered by the issuer that are offered in the same insurance market. (16) Qualifying payment amount (17) Underlying fee schedule rate (18) Downcode (b) Methodology for calculation of median contracted rate In general. (2) Calculation rules. (i) Calculate the median contracted rate with respect to all plans of such sponsor (or the administering entity as provided in paragraph (a)(8)(iv) of this section, if applicable) or all coverage offered by such issuer that are offered in the same insurance market; (ii) Calculate the median contracted rate using the full contracted rate applicable to the service code, except that the plan or issuer must— (A) Calculate separate median contracted rates for CPT code modifiers “26” (professional component) and “TC” (technical component); (B) For anesthesia services, calculate a median contracted rate for the anesthesia conversion factor for each service code; (C) For air ambulance services, calculate a median contracted rate for the air mileage service codes (A0435 and A0436); and (D) Where contracted rates otherwise vary based on applying a modifier code, calculate a separate median contracted rate for each such service code-modifier combination; (iii) In the case of payments made by a plan or issuer that are not on a fee-for-service basis (such as bundled or capitation payments), calculate a median contracted rate for each item or service using the underlying fee schedule rates for the relevant items or services. If the plan or issuer does not have an underlying fee schedule rate for the item or service, it must use the derived amount to calculate the median contracted rate; and (iv) Exclude risk sharing, bonus, penalty, or other incentive-based or retrospective payments or payment adjustments. (3) Provider specialties; facility types. (ii) If a plan or issuer has contracted rates for emergency services that vary based on facility type for a service code, the median contracted rate is calculated separately for each facility of the same or similar facility type. (c) Methodology for calculation of the qualifying payment amount In general. (A) The combined percentage increase for 2019, 2020, and 2021 will be published in guidance by the Internal Revenue Service. The Department of the Treasury and the Internal Revenue Service will calculate the percentage increase using the CPI-U published by the Bureau of Labor Statistics of the Department of Labor. (B) For purposes of this paragraph (c)(1)(i), the CPI-U for each calendar year is the average of the CPI-U as of the close of the 12-month period ending on August 31 of the calendar year, rounded to 10 decimal places. (C) The combined percentage increase for 2019, 2020, and 2021 will be calculated as: (CPI-U 2019/CPI-U 2018) × (CPI-U 2020/CPI-U 2019) × (CPI-U 2021/CPI-U 2020) (ii) For an item or service (other than items or services described in paragraphs (c)(1)(iii) through (vii) of this section) furnished during 2023 or a subsequent year, the plan or issuer must calculate the qualifying payment amount by increasing the qualifying payment amount determined under paragraph (c)(1)(i) of this section, for such an item or service furnished in the immediately preceding year, by the percentage increase as published by the Department of the Treasury and the Internal Revenue Service. (A) The percentage increase for any year after 2022 will be published in guidance by the Internal Revenue Service. The Department of the Treasury and Internal Revenue Service will calculate the percentage increase using the CPI-U published by the Bureau of Labor Statistics of the Department of Labor. (B) For purposes of this paragraph (c)(1)(ii), the CPI-U for each calendar year is the average of the CPI-U as of the close of the 12-month period ending on August 31 of the calendar year, rounded to 10 decimal places. (C) The combined percentage increase for any year will be calculated as CPI-U present year/CPI-U prior year. (iii) For anesthesia services furnished during 2022, the plan or issuer must calculate the qualifying payment amount by first increasing the median contracted rate for the anesthesia conversion factor (as determined in accordance with paragraph (b) of this section) for the same or similar item or service under such plans or coverage, respectively, on January 31, 2019, in accordance with paragraph (c)(1)(i) of this section (referred to in this section as the indexed median contracted rate for the anesthesia conversion factor). The plan or issuer must then multiply the indexed median contracted rate for the anesthesia conversion factor by the sum of the base unit, time unit, and physical status modifier units of the participant or beneficiary to whom anesthesia services are furnished to determine the qualifying payment amount. (A) The base units for an anesthesia service code are the base units for that service code specified in the most recent edition (as of the date of service) of the American Society of Anesthesiologists Relative Value Guide. (B) The time unit is measured in 15-minute increments or a fraction thereof. (C) The physical status modifier on a claim is a standard modifier describing the physical status of the patient and is used to distinguish between various levels of complexity of the anesthesia services provided, and is expressed as a unit with a value between zero (0) and three (3). (D) The anesthesia conversion factor is expressed in dollars per unit and is a contracted rate negotiated with the plan or issuer. (iv) For anesthesia services furnished during 2023 or a subsequent year, the plan or issuer must calculate the qualifying payment amount by first increasing the indexed median contracted rate for the anesthesia conversion factor, determined under paragraph (c)(1)(iii) of this section for such services furnished in the immediately preceding year, in accordance with paragraph (c)(1)(ii) of this section. The plan or issuer must then multiply that amount by the sum of the base unit, time unit, and physical status modifier units for the participant or beneficiary to whom anesthesia services are furnished to determine the qualifying payment amount. (v) For air ambulance services billed using the air mileage service codes (A0435 and A0436) that are furnished during 2022, the plan or issuer must calculate the qualifying payment amount for services billed using the air mileage service codes by first increasing the median contracted rate (as determined in accordance with paragraph (b) of this section), in accordance with paragraph (c)(1)(i) of this section (referred to in this section as the indexed median air mileage rate). The plan or issuer must then multiply the indexed median air mileage rate by the number of loaded miles provided to the participant or beneficiary to determine the qualifying payment amount. (A) The air mileage rate is expressed in dollars per loaded mile flown, is expressed in statute miles (not nautical miles), and is a contracted rate negotiated with the plan or issuer. (B) The number of loaded miles is the number of miles a patient is transported in the air ambulance vehicle. (C) The qualifying payment amount for other service codes associated with air ambulance services is calculated in accordance with paragraphs (c)(1)(i) and (ii) of this section. (vi) For air ambulance services billed using the air mileage service codes (A0435 and A0436) that are furnished during 2023 or a subsequent year, the plan or issuer must calculate the qualifying payment amount by first increasing the indexed median air mileage rate, determined under paragraph (c)(1)(v) of this section for such services furnished in the immediately preceding year, in accordance with paragraph (c)(1)(ii) of this section. The plan or issuer must then multiply the indexed median air mileage rate by the number of loaded miles provided to the participant or beneficiary to determine the qualifying payment amount. (vii) For any other items or services for which a plan or issuer generally determines payment for the same or similar items or services by multiplying a contracted rate by another unit value, the plan or issuer must calculate the qualifying payment amount using a methodology that is similar to the methodology required under paragraphs (c)(1)(iii) through (vi) of this section and reasonably reflects the payment methodology for same or similar items or services. (2) New plans and coverage. (i) For the first year in which the group health plan or group health insurance coverage, respectively, is offered in such region— (A) If the plan or issuer has sufficient information to calculate the median of the contracted rates described in paragraph (b) of this section, the plan or issuer must calculate the qualifying payment amount in accordance with paragraph (c)(1) of this section for items and services that are covered by the plan or coverage and furnished during the first year; and (B) If the plan or issuer does not have sufficient information to calculate the median of the contracted rates described in paragraph (b) of this section for an item or service provided in a geographic region, the plan or issuer must determine the qualifying payment amount for the item or service in accordance with paragraph (c)(3)(i) of this section. (ii) For each subsequent year the group health plan or group health insurance coverage, respectively, is offered in the region, the plan or issuer must calculate the qualifying payment amount by increasing the qualifying payment amount determined under this paragraph (c)(2) for the items and services furnished in the immediately preceding year, in accordance with paragraph (c)(1)(ii), (iv), or (vi) of this section, as applicable. (3) Insufficient information; newly covered items and services. (i) For an item or service furnished during 2022 (or, in the case of a newly covered item or service, during the first coverage year for the item or service with respect to the plan or coverage), the plan or issuer must calculate the qualifying payment amount by first identifying the rate that is equal to the median of the in-network allowed amounts for the same or similar item or service provided in the geographic region in the year immediately preceding the year in which the item or service is furnished (or, in the case of a newly covered item or service, the year immediately preceding such first coverage year) determined by the plan or issuer, respectively, through use of any eligible database, and then increasing that rate by the percentage increase in the CPI-U over such preceding year. For purposes of this section, in cases in which an eligible database is used to determine the qualifying payment amount with respect to an item or service furnished during a calendar year, the plan or issuer must use the same database for determining the qualifying payment amount for that item or service furnished through the last day of the calendar year, and if a different database is selected for some items or services, the basis for that selection must be one or more factors not directly related to the rate of those items or services (such as sufficiency of data for those items or services). (ii) For an item or service furnished in a subsequent year (before the first sufficient information year for such item or service with respect to such plan or coverage), the plan or issuer must calculate the qualifying payment amount by increasing the qualifying payment amount determined under paragraph (c)(3)(i) of this section or this paragraph (c)(3)(ii), as applicable, for such item or service for the year immediately preceding such subsequent year, by the percentage increase in CPI-U over such preceding year; (iii) For an item or service furnished in the first sufficient information year for such item or service with respect to such plan or coverage, the plan or issuer must calculate the qualifying payment amount in accordance with paragraph (c)(1)(i), (iii), or (v) of this section, as applicable, except that in applying such paragraph to such item or service, the reference to `furnished during 2022' is treated as a reference to furnished during such first sufficient information year, the reference to `in 2019' is treated as a reference to such sufficient information year, and the increase described in such paragraph is not applied; and (iv) For an item or service furnished in any year subsequent to the first sufficient information year for such item or service with respect to such plan or coverage, the plan or issuer must calculate the qualifying payment amount in accordance with paragraph (c)(1)(ii), (iv), or (vi) of this section, as applicable, except that in applying such paragraph to such item or service, the reference to `furnished during 2023 or a subsequent year' is treated as a reference to furnished during the year after such first sufficient information year or a subsequent year. (4) New service codes. (i) For an item or service furnished during 2022 (or, in the case of a newly covered item or service, during the first coverage year for the item or service with respect to the plan or coverage), the plan or issuer must identify a reasonably related service code that existed in the immediately preceding year and— (A) If the Centers for Medicare & Medicaid Services has established a Medicare payment rate for the item or service billed under the new service code, the plan or issuer must calculate the qualifying payment amount by first calculating the ratio of the rate that Medicare pays for the item or service billed under the new service code compared to the rate that Medicare pays for the item or service billed under the related service code, and then multiplying the ratio by the qualifying payment amount for an item or service billed under the related service code for the year in which the item or service is furnished. (B) If the Centers for Medicare & Medicaid Services has not established a Medicare payment rate for the item or service billed under the new service code, the plan or issuer must calculate the qualifying payment amount by first calculating the ratio of the rate that the plan or issuer reimburses for the item or service billed under the new service code compared to the rate that the plan or issuer reimburses for the item or service billed under the related service code, and then multiplying the ratio by the qualifying payment amount for an item or service billed under the related service code. (ii) For an item or service furnished in a subsequent year (before the first sufficient information year for such item or service with respect to such plan or coverage or before the first year for which an eligible database has sufficient information to a calculate a rate under paragraph (c)(3)(i) of this section in the immediately preceding year), the plan or issuer must calculate the qualifying payment amount by increasing the qualifying payment amount determined under paragraph (c)(4)(i) of this section or this paragraph (c)(4)(ii), as applicable, for such item or service for the year immediately preceding such subsequent year, by the percentage increase in CPI-U over such preceding year; (iii) For an item or service furnished in the first sufficient information year for such item or service with respect to such plan or coverage or the first year for which an eligible database has sufficient information to calculate a rate under paragraph (c)(3)(i) of this section in the immediately preceding year, the plan or issuer must calculate the qualifying payment amount in accordance with paragraph (c)(3) of this section. (d) Information to be shared about the qualifying payment amount. (1) With each initial payment or notice of denial of payment under § 2590.716-4, § 2590.716-5, or § 2590.717-1 of this part: (i) The qualifying payment amount for each item or service involved; (ii) If the qualifying payment amount is based on a downcoded service code or modifier— (A) A statement that the service code or modifier billed by the provider, facility, or provider of air ambulance services was downcoded; (B) An explanation of why the claim was downcoded, which must include a description of which service codes were altered, if any, and a description of which modifiers were altered, added, or removed, if any; and (C) The amount that would have been the qualifying payment amount had the service code or modifier not been downcoded; (iii) A statement to certify that, based on the determination of the plan or issuer— (A) The qualifying payment amount applies for purposes of the recognized amount (or, in the case of air ambulance services, for calculating the participant's or beneficiary's cost sharing); and (B) Each qualifying payment amount shared with the provider or facility was determined in compliance with this section; (iv) A statement that— (A) If the provider, facility, or provider of air ambulance services, as applicable, wishes to initiate a 30-business-day open negotiation period for purposes of determining the out-of-network rate, the provider, facility, or provider of air ambulance services must: ( 1 ( 2 (B) If the 30-business-day open negotiation period does not result in an agreement on the amount of payment, the provider, facility, or provider of air ambulance services may generally initiate the Federal IDR process within 4 business days after the end of the 30-business-day open negotiation period; (v) For disclosures required to be provided on or after August 3, 2026, the legal business name (if any) of the self-insured group health plan or issuer and, if applicable, the legal business name of the self-insured group health plan sponsor, and the registration number assigned to the plan or issuer, as required under § 2590.716-9. (vi) Contact information, including a telephone number and email address, for the appropriate person or office to initiate open negotiations for purposes of determining an amount of payment (including cost sharing) for such item or service. (2) In a timely manner upon the request of the provider, facility, or provider of air ambulance services: (i) Information about whether the qualifying payment amount for items and services involved included contracted rates that were not on a fee-for-service basis for those specific items and services and whether the qualifying payment amount for those items and services was determined using underlying fee schedule rates or a derived amount; (ii) If a plan or issuer uses an eligible database under paragraph (c)(3) of this section to determine the qualifying payment amount, information to identify which database was used; and (iii) If a related service code was used to determine the qualifying payment amount for an item or service billed under a new service code under paragraph (c)(4)(i) or (ii) of this section, information to identify the related service code; (iv) If applicable, a statement that the plan's or issuer's contracted rates include risk-sharing, bonus, penalty, or other incentive-based or retrospective payments or payment adjustments for the items and services involved (as applicable) that were excluded for purposes of calculating the qualifying payment amount. (e) Certain access fees to databases. (f) Applicability date. (g) Severability (2) The provisions in this section are intended to be severable from the provisions in §§ 2590.716-6A, 2590.716-8, and 2590.716-9, from any grant of forbearance from removal resulting from this subpart, and from any provision referenced in §§ 2590.716-6A, 2590.716-8, and 2590.716-9. [86 FR 36959, July 13, 2021, as amended at 87 FR 52648, Aug. 26, 2022; 91 FR 34059, June 4, 2026] § 2590.716-6A Use of claim adjustment reason codes and remittance advice remark codes. (a) In general. (b) Severability (2) The provisions in this section are intended to be severable from the provisions in §§ 2590.716-6, 2590.716-8, and 2590.716-9, from any grant of forbearance from removal resulting from this subpart, and from any provision referenced in §§ 2590.716-6, 2590.716-8, and 2590.716-9. [91 FR 34059, June 4, 2026] § 2590.716-7 Complaints process for surprise medical bills regarding group health plans and group health insurance coverage. (a) Scope and definitions Scope. (2) Definitions. (i) Complaint (ii) Complainant (b) Complaints process. (2) DOL will notify complainants, by oral or written means, of receipt of the complaint no later than 60 business days after the complaint is received. DOL will include a response acknowledging receipt of the complaint, notifying the complainant of their rights and obligations under the complaints process, and describing the next steps of the complaint resolution process. As part of the response, DOL may request additional information needed to process the complaint. Such additional information may include: (i) Explanations of benefits; (ii) Processed claims; (iii) Information about the health care provider, facility, or provider of air ambulance services involved; (iv) Information about the group health plan or health insurance issuer covering the individual; (v) Information to support a determination regarding whether the service was an emergency service or non-emergency service; (vi) The summary plan description, policy, certificate, contract of insurance, membership booklet, outline of coverage, or other evidence of coverage the plan or issuer provides to participants or beneficiaries; (vii) Documents regarding the facts in the complaint in the possession of, or otherwise attainable by, the complainant; or (viii) Any other information DOL may need to make a determination of facts for an investigation. (3) DOL will make reasonable efforts consistent with agency practices to notify the complainant of the outcome of the complaint after the submission is processed through appropriate methods as determined by DOL. A complaint is considered processed after DOL has reviewed the complaint and accompanying information and made an outcome determination. Based on the nature of the complaint and the plan or issuer involved, DOL may— (i) Refer the complainant to another appropriate Federal or State resolution process; (ii) Notify the complainant and make reasonable efforts to refer the complainant to the appropriate State or Federal regulatory authority if DOL receives a complaint where another entity has enforcement jurisdiction over the plan or issuer; (iii) Refer the plan or issuer for an investigation for enforcement action; or (iv) Provide the complainant with an explanation of the resolution of the complaint and any corrective action taken. § 2590.716-8 Independent dispute resolution process. (a) Scope and definitions— Scope. (2) Definitions. (i) Batched qualified IDR items and services (ii) Breach (A) Breach excludes: ( 1 ( 2 ( 3 (B) Except as provided in paragraph (a)(2)(ii)(A) of this section, access, use, or disclosure of IIHI in a manner not permitted under paragraph (e)(2)(v) of this section is presumed to be a breach unless the certified IDR entity demonstrates that there is a low probability that the security or privacy of the IIHI has been compromised based on a risk assessment encompassing at least the following factors: ( 1 ( 2 ( 3 ( 4 (iii) Certified IDR entity (iv) Conflict of interest (A) A group health plan; a health insurance issuer offering group health insurance coverage, individual health insurance coverage, or short-term, limited-duration insurance; a carrier offering a health benefits plan under 5 U.S.C. 8902; or a provider, a facility, or a provider of air ambulance services; (B) An affiliate or a subsidiary of a group health plan; a health insurance issuer offering group health insurance coverage, individual health insurance coverage, or short-term limited-duration insurance; a carrier offering a health benefits plan under 5 U.S.C. 8902; or a provider, a facility, or a provider of air ambulance services; (C) An affiliate or subsidiary of a professional or trade association representing group health plans; health insurance issuers offering group health insurance coverage, individual health insurance coverage, or short-term limited duration insurance; carriers offering a health benefits plan under 5 U.S.C. 8902; or providers, facilities, or providers of air ambulance services. (D) A certified IDR entity, that has, or that has any personnel, contractors, or subcontractors assigned to a determination who have, a material familial, financial, or professional relationship with a party to the payment determination being disputed, or with any officer, director, or management employee of the plan, issuer, or carrier offering a health benefits plan under 5 U.S.C. 8902; the plan administrator, plan fiduciaries, or plan, issuer, or carrier employees; the health care provider, the health care provider's group or practice association; the provider of air ambulance services, the provider of air ambulance services' group or practice association, or the facility that is a party to the dispute. (v) Credible information (vi) IDR entity (vii) Individually identifiable health information (IIHI) (A) That identifies the individual; or (B) With respect to which there is a reasonable basis to believe the information can be used to identify the individual. (viii) Material familial relationship (ix) Material financial relationship (x) Material professional relationship (xi) Qualified IDR item or service (A) That is an emergency service furnished by a nonparticipating provider or nonparticipating facility subject to the protections of 26 CFR 54.9816-4T, § 2590.716-4, or 45 CFR 149.110, as applicable, for which the conditions of 45 CFR 149.410(b) are not met, or an item or service furnished by a nonparticipating provider at a participating health care facility, subject to the requirements of 26 CFR 54.9816-T, § 2590.716-5, or 45 CFR 149.120, as applicable, for which the conditions of 45 CFR 149.420(c) through (i) are not met, or air ambulance services furnished by a nonparticipating provider of air ambulance services subject to the protections of 26 CFR 54.9817-1T, § 2590.717-1, or 45 CFR 149.130, as applicable, and for which the out-of-network rate is not determined by reference to an All-Payer Model Agreement under section 1115A of the Social Security Act or a specified State law as defined in § 2590.716-3; (B) With respect to which a provider or facility (as applicable) or group health plan or health insurance issuer offering group health insurance coverage submits a notification under paragraph (b)(2) of this section; (C) That is not an item or service that is the subject of an open negotiation under paragraph (b)(1) of this section; and (D) That is not an item or service for which a notification under paragraph (b)(2) of this section is submitted during the 90-calendar-day period under paragraph (c)(4)(vi)(B) of this section, but that may include such an item or service if the notification is submitted during the subsequent 30-business-day period under paragraph (c)(4)(vi)(C) of this section. (xii) Unsecured IIHI (b) Determination of payment amount through open negotiation and initiation of the Federal IDR process Determination of payment amount through open negotiation In general. 12 (ii) Open negotiation notice Content. ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 ( 8 ( 9 ( 10 ( 11 ( 12 (B) [Reserved] (iii) Open negotiation response notice Content. ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 ( 8 ( 9 ( 10 12 (B) [Reserved] (2) Initiating the Federal IDR process In general. (A) Exception for items and services provided by certain nonparticipating providers and facilities. (B) [Reserved] (ii) Notice of IDR initiation Content. ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 ( 8 ( 9 ( 10 ( 11 ( 12 ( 13 ( 14 (B) [Reserved] (iii) Notice of IDR initiation response. (A) Content. ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 ( 8 ( 9 13 ( 10 ( 11 (B) [Reserved] (3) Manner. (c) Federal IDR process following initiation Selection of certified IDR entity Preliminary selection of the certified IDR entity. 11 (A) If the non-initiating party agrees or fails to respond to the selection of the initiating party's preferred certified IDR entity in the manner and timeframe described in paragraph (c)(1)(i) of this section, the initiating party's preferred certified IDR entity will be considered jointly selected on the third business day after the date of IDR initiation. (B) If the non-initiating party objects to the selection of the initiating party's preferred certified IDR entity by designating an alternative preferred certified IDR entity in the manner and timeframe described in paragraph (c)(1)(i) of this section, the initiating party may then agree or object to the non-initiating party's alternative preferred certified IDR entity by submitting the notice of certified IDR entity selection in the manner specified in paragraph (c)(1)(i)(D) of this section. ( 1 ( 2 ( 3 (C) If a certified IDR entity is not jointly selected under paragraph (c)(1)(i)(A) or (B) of this section, either party may select an alternative preferred certified IDR entity by submitting the notice of certified IDR entity selection in the manner specified in paragraph (c)(1)(i)(D) of this section, until the earlier of the date that the parties agree on the alternative preferred certified IDR entity or the deadline for joint selection, which is 3 business days after the date of IDR initiation. Once a party submits a notice of certified IDR entity selection, it may not submit another notice of certified IDR entity selection until it receives a responding notice of certified IDR entity selection from the other party. ( 1 ( 2 ( 3 (D) To notify the other party and the Secretary of an agreement or objection to an alternative preferred certified IDR entity as described in paragraph (c)(1)(i)(C) of this section, a party must furnish a notice of certified IDR entity selection, using the standard form developed by the Secretary, to the other party and the Secretary through the Federal IDR portal within 3 business days after the date of IDR initiation. The notice of certified IDR entity selection must include a statement indicating the party's agreement with or objection to the other party's alternative preferred certified IDR entity and, if applicable, an explanation of any conflict of interest with the alternative preferred certified IDR entity, and the name of another alternative preferred certified IDR entity. However, in the event the conditions for failure to jointly select a certified IDR entity apply, selection will proceed in accordance with paragraph (c)(1)(ii) of this section. (ii) Failure to jointly select a certified IDR entity. (A) In selecting the certified IDR entity, the Secretary will first confirm whether a party submitted the notice of IDR initiation response or the notice of certified IDR entity selection with an alternative preferred certified IDR entity on the third business day after the date of IDR initiation without the other party's agreement to the selection. If either notice was provided on the third business day after the date of IDR initiation without the other party's agreement to the alternative preferred certified IDR entity by the end of the third business day after the date of IDR initiation, the Secretary will provide the party last in receipt of the applicable notice, as of the end of the third business day after the date of IDR initiation, 2 additional business days to agree or object to the other party's alternative preferred certified IDR entity selection. ( 1 ( 2 (B) [Reserved] (iii) Date of preliminary selection of the certified IDR entity. (A) Three business days after the date of IDR initiation if the parties jointly select a certified IDR entity, as specified in paragraph (c)(1)(i) of this section; or (B) Six business days after the date of IDR initiation, if the parties fail to jointly select a certified IDR entity as specified in paragraph (c)(1)(ii) of this section. (iv) Final selection of the certified IDR entity (A) Conflict-of-interest review. ( 1 ( 2 ( 3 (B) Failure to meet conflict-of-interest requirements. 1 3 (C) Date of final selection of the certified IDR entity. (2) Federal IDR process eligibility review—(i) Federal IDR process eligibility determination by certified IDR entity. (ii) Request for additional information. (A) Upon request, a party must submit the additional information within 5 business days to the selected certified IDR entity through the Federal IDR portal. Following a request for additional information, the time period for the applicable stage of the Federal IDR process will be tolled until the earlier of the date either all of the requested information is provided or the 5-business-day period expires, and each subsequent timeframe in the Federal IDR process will be determined based on the date of completion of the stage of the Federal IDR process that was tolled for provision of the requested information. (B) If a party fails to submit the additional information as required, the related determination, including the conflict-of-interest review, eligibility determination, or payment determination, will be made without the requested information unless a good-cause extension of the 5-business-day period, as specified in paragraph (g)(1)(i) of this section, has been provided, and the party subsequently submits the additional information requested within the extended period. If the related determination cannot be made because both parties failed to provide the additional information as required, the dispute will be considered withdrawn, as specified in paragraph (c)(3)(ii) of this section. (3) Authority to continue negotiations or withdraw. Authority to continue to negotiate. (ii) Withdrawal of disputes. (A) The initiating party provides notification through the Federal IDR portal to the Secretary and the certified IDR entity (if selected) that both parties to the dispute agree to withdraw the dispute from the Federal IDR process without agreement on an out-of-network rate. The notification must include the dispute number, a statement about both parties' agreement to withdraw, and signatures from authorized signatories for both parties; (B) The initiating party provides a standard withdrawal request notice through the Federal IDR portal to the Secretary, the certified IDR entity (if selected), and the non-initiating party of its request to withdraw the dispute from the Federal IDR process, and the non-initiating party notifies the Secretary, certified IDR entity (if selected), and the initiating party through the Federal IDR portal of its agreement to withdraw from the Federal IDR process within 5 business days of the initiating party's request. Provision of the withdrawal request through the Federal IDR portal pauses the Federal IDR process for 5 business days or until the non-initiating party responds, whichever happens first. If the non-initiating party fails to respond within 5 business days of the initiating party's request, the non-initiating party will be considered to have agreed to the withdrawal, and the dispute will be withdrawn; (C) The certified IDR entity cannot determine eligibility, for example, because both parties to the dispute are nonresponsive to any requests for additional information to determine eligibility as described in paragraph (c)(2)(ii) of this section; or (D) The certified IDR entity cannot make a payment determination, for example, because both parties to the dispute have failed to submit an offer as described in paragraph (c)(5)(i) of this section. (4) Treatment of batched items and services In general. (A) The qualified IDR items and services are billed by the same provider or group of providers, the same facility, or the same provider of air ambulance services. Items and services are billed by the same provider or group of providers, the same facility, or the same provider of air ambulance services if the items or services are billed with the same National Provider Identifier or Tax Identification Number; (B) Payment for the qualified IDR items and services is required to be made by the same group health plan or health insurance issuer. For group or individual health insurance coverage, this requirement is satisfied if the same issuer is required to make payment for the qualified IDR items and services, even if the qualified IDR items and services relate to claims from different group health plans or individual market policies. For self-insured group health plans, this requirement is satisfied if the same self-insured group health plan is required to make payment for the qualified IDR items and services, including when the plan makes payments through a third party administrator; the requirement is not satisfied if multiple self-insured group health plans are required to make payments for the qualified IDR items and services, even if those group health plans make payments through the same third-party administrator; (C) The qualified IDR items and services meet any of the following criteria under which multiple qualified IDR items and services relate to the treatment of a similar condition: ( 1 ( 2 ( 3 (D) All the qualified IDR items and services were furnished within the same 30-business-day period following the date on which the first item or service included in the batched dispute was furnished, and the qualified IDR items and services were the subjects of a 30-business-day open negotiation period that ended within 4 business days of IDR initiation, except as provided in paragraph (c)(5)(vii)(B) of this section. (ii) Treatment of bundled payment arrangements. (5) Payment determination for a qualified IDR item or service— Submission of offers. (A) Must each submit to the certified IDR entity: ( 1 ( 2 ( 3 ( i ( ii ( iii ( iv (B) May each submit to the certified IDR entity any information relating to the offer that was submitted by either party, except that the information may not include information on factors described in paragraph (c)(4)(v) of this section. (ii) Payment determination and notification. (A) Select as the out-of-network rate for the qualified IDR item or service one of the offers submitted under paragraph (c)(5)(i) of this section, weighing only the considerations specified in paragraph (c)(5)(iii) of this section (as applied to the information provided by the parties pursuant to paragraph (c)(5)(i) of this section). The certified IDR entity must select the offer that the certified IDR entity determines best represents the value of the qualified IDR item or service as the out-of-network rate. ( 1 Prevailing party. ( 2 Non-prevailing party. ( 3 Parties prevailing in equal numbers of determinations. (B) Notify the plan or issuer and the provider or facility, as applicable, of the selection of the offer under paragraph (c)(5)(ii)(A) of this section, and provide the written decision required under paragraph (c)(5)(vi) of this section. (iii) Considerations in determination. (A) The certified IDR entity must consider the qualifying payment amount(s) for the applicable year for the same or similar item or service. (B) The certified IDR entity must consider information submitted by a party that relates to the following circumstances: ( 1 ( 2 ( 3 ( 4 ( 5 (C) The certified IDR entity must also consider information provided by a party in response to a request by the certified IDR entity under paragraph (c)(5)(i)(A)( 2 (D) The certified IDR entity must also consider additional information submitted by a party that relates to the offer for the payment amount for the qualified IDR item or service that is the subject of the payment determination and that does not include information on factors described in paragraph (c)(5)(v) of this section. (iv) [Reserved] (v) Prohibition on consideration of certain factors. (A) Usual and customary charges (including payment or reimbursement rates expressed as a proportion of usual and customary charges); (B) The amount that would have been billed by the provider or facility with respect to the qualified IDR item or service had the provisions of 45 CFR 149.410 and 149.420 (as applicable) not applied; or (C) The payment or reimbursement rate for items and services furnished by the provider or facility payable by a public payor, including under the Medicare program under title XVIII of the Social Security Act; the Medicaid program under title XIX of the Social Security Act; the Children's Health Insurance Program under title XXI of the Social Security Act; the TRICARE program under chapter 55 of title 10, United States Code; chapter 17 of title 38, United States Code; or demonstration projects under section 1115 of the Social Security Act. (vi) Written decision. (B) The certified IDR entity's written decision must include an explanation of their determination, including what information the certified IDR entity determined demonstrated that the offer selected as the out-of-network rate is the offer that best represents the value of the qualified IDR item or service, including the weight given to the qualifying payment amount and any additional credible information under paragraphs (c)(5)(iii)(B) through (D) of this section. (vii) Effects of determination. Binding. ( 1 ( 2 (B) Suspension of certain subsequent IDR requests. (C) Subsequent submission of requests permitted. (viii) Recordkeeping requirements. (ix) Payment. (d) Costs of IDR process Certified IDR entity fee. Timing of payment of certified IDR entity fee. (ii) Failure to timely pay certified IDR entity fee. (iii) Method of allocation of the certified IDR entity fee after a payment determination. 2 1 (iv) Method of allocation of the certified IDR entity fee upon agreement or withdrawal after an eligibility determination. (A) Reached an agreement on an out-of-network rate for qualified IDR items or services before the certified IDR entity has made its payment determination, as described in paragraph (c)(3)(i) of this section; or (B) Withdrawn the dispute before the certified IDR entity has made its payment determination, as described in paragraph (c)(3)(ii) of this section. (v) Method of allocation of the certified IDR entity fee upon agreement or withdrawal before an eligibility determination. (A) Reached an agreement on an out-of-network rate for qualified IDR items or services before the certified IDR entity has made its payment determination, as described in paragraph (c)(3)(i) of this section; or (B) Withdrawn the dispute before the certified IDR entity has made its payment determination, as described in paragraph (c)(3)(ii) of this section. (2) Administrative fee. (ii) Administrative fee amount. (A) For disputes initiated on January 22, 2024, through June 10, 2026, the administrative fee amount is $115 per party per dispute. (B) For disputes initiated on or after June 11, 2026, the administrative fee amount is $15 per party per dispute. (iii) Failure to pay the administrative fee. (e) Certification of IDR entity In general. (i) An IDR entity must meet the standards described in this paragraph (e) and be certified by the Secretary, jointly with the Secretaries of Health and Human Services and the Treasury, as set forth in this paragraph (e) of this section and guidance promulgated by the Secretary. Once certified, the IDR entity will be provided with a certified IDR entity number. (ii) An IDR entity must provide written documentation to the Secretary regarding general company information (such as contact information, Taxpayer Identification Number, and website), as well as the applicable service area in which the IDR entity intends to conduct payment determinations under the Federal IDR process. IDR entities may choose to submit their application for all States, or self-limit to a particular subset of States. (iii) An IDR entity that the Secretary, jointly with the Secretary of the Treasury and the Secretary of Health and Human Services, certifies must enter into an agreement as a condition of certification. The agreement shall include specified provisions encompassed by this section, including, but not limited to, the requirements applicable to certified IDR entities when making payment determinations as well as the requirements regarding certification and revocation (such as specifications for wind down activities and reallocation of certified IDR entity fees, where warranted). (2) Requirements. (i) Possess (directly or through contracts or other arrangements) sufficient arbitration and claims administration of health care services, managed care, billing and coding, medical and legal expertise to make the payment determinations described in paragraph (c) of this section within the time prescribed in paragraph (c)(4)(ii) of this section. (ii) Employ (directly or through contracts or other arrangements) a sufficient number of personnel to make the determinations described in paragraph (c) of this section within the time prescribed by (c)(4)(ii) of this section. To satisfy this standard, the written documentation must include a description of the IDR entity's organizational structure and capabilities, including an organizational chart and the credentials, responsibilities, and number of personnel employed to make determinations described in paragraph (c) of this section. (iii) Maintain a current accreditation from a nationally recognized and relevant accrediting organization, such as URAC, or ensure that it otherwise possesses the requisite training to conduct payment determinations (for example, providing documentation that personnel employed by the IDR entity have completed arbitration training by the American Arbitration Association, the American Health Law Association, or a similar organization). (iv) Have a process to ensure that no conflict of interest, as defined in paragraph (a)(2) of this section, exists between the parties and the personnel the certified IDR entity assigns to a payment determination to avoid violating paragraph (c)(1)(ii) of this section, including policies and procedures for conducting ongoing audits for conflicts of interest, to ensure that should any arise, the certified IDR entity has procedures in place to inform the Secretary, jointly with the Secretary of the Treasury and the Secretary of Health and Human Services of the conflict of interest and to mitigate the risk by reassigning the dispute to other personnel in the event that any personnel previously assigned have a conflict of interest. (v) Have a process to maintain the confidentiality of IIHI obtained in the course of conducting determinations. A certified IDR entity's responsibility to comply with these confidentiality requirements shall survive revocation of the IDR entity's certification for any reason, and IDR entities must comply with the record retention and disposal requirements described in this section. Under this process, once certified, the certified IDR entity must comply with the following requirements: (A) Privacy. ( 1 ( 2 (B) Security. 1 ( 2 ( 3 ( 4 (C) Breach notification. ( 1 Breaches treated as discovered. ( 2 Timing of notification. ( 3 Content of notification. ( i ( ii ( iii ( iv ( v ( 4 Method for providing notification. (D) Application to contractor and subcontractors. (vi) Meet appropriate indicators of fiscal integrity and stability by demonstrating that the certified IDR entity has a system of safeguards and controls in place to prevent and detect improper financial activities by its employees and agents to assure fiscal integrity and accountability for all certified IDR entity fees and administrative fees received, held, and disbursed and by submitting 3 years of financial statements or, if not available, other information to demonstrate fiscal stability of the IDR entity. (vii) Provide, no more frequently than once per calendar year, a fixed fee for single determinations and a separate fixed fee for batched determinations, as well as an additional fixed tiered fee for batched determinations, if applicable, within the upper and lower limits for each, as established by the Secretary in notice and comment rulemaking. The certified IDR entity fee ranges established by the Secretary in rulemaking will remain in effect until changed by notice and comment rulemaking. The certified IDR entity may not charge a fee outside the limits set forth in rulemaking unless the certified IDR entity or IDR entity seeking certification receives advance written approval from the Secretary to charge a fixed fee beyond the upper or lower limits by following the process described in paragraph (e)(2)(vii)(A) of this section. A certified IDR entity may also seek advance written approval from the Secretary to update its fees one additional time per calendar year by meeting the requirements described in paragraph (e)(2)(vii)(A). The Secretary will approve a request to charge a fixed fee beyond the upper or lower limits for fees as set forth in rulemaking, or to update the fixed fee during the calendar year if, in their discretion, they determine the information submitted by a certified IDR entity or IDR entity seeking certification demonstrates that the proposed change to the certified IDR entity fee would ensure the financial viability of the certified IDR entity or IDR entity seeking certification and would not impose on parties an undue barrier to accessing the Federal IDR process. (A) In order for the certified IDR entity or IDR entity seeking certification to receive the Secretary's written approval to charge a fixed fee beyond the upper or lower limits for fees as set forth in rulemaking or to update the fixed fee during the calendar year, the certified IDR entity or IDR entity seeking certification must submit to the Secretary, in the form and manner specified by the Secretary: ( 1 ( 2 ( 3 (B) [Reserved] (viii) For disputes initiated on or after January 22, 2024, certified IDR entities are permitted to charge a fixed certified IDR entity fee for single determinations within the range of $200 to $840, and a fixed certified IDR entity fee for batched determinations within the range of $268 to $1,173, unless a fee outside such ranges is approved by the Secretary pursuant to paragraph (e)(2)(vii)(A) of this section. As part of the batched determination fee, certified IDR entities are permitted to charge an additional fixed tiered fee within the range of $75 to $250 for every additional 25 line items within a batched dispute, beginning with the 26th line item. The ranges for the certified IDR entity fees for single and batched determinations will remain in effect until changed by notice and comment rulemaking. (ix) Have a procedure in place to retain the certified IDR entity fees described in paragraph (d)(1) of this section paid by both parties in a trust or escrow account and to return the certified IDR entity fee paid by the prevailing party or a portion of each party's certified IDR entity fee in the case of an agreement described in paragraph (c)(3)(i) of this section, a withdrawal described in paragraph (c)(3)(ii) of this section, or a circumstance in which each party prevails in an equal number of determinations, as described in paragraph (d)(1)(iii) of this section, within 30 business days following the date of the determination or the date the certified IDR entity is notified by both parties of an agreement or withdrawal, as applicable; (x) Have a procedure in place to retain the administrative fees described in paragraph (d)(2) of this section and to remit the administrative fees to the Secretary in accordance with the timeframe and procedures set forth in guidance published by the Secretary. (xi) Discharge its responsibilities in accordance with paragraph (c) of this section, including not making any determination with respect to which the certified IDR entity would not be eligible for selection pursuant to paragraph (c)(1) of this section. (xii) Collect the information required to be reported to the Secretary under paragraph (f) of this section and report the information on a timely basis in the form and manner provided in guidance published by the Secretary. (3) Conflict-of-interest standards. (i) The IDR entity must provide an attestation indicating that it does not have a conflict of interest as defined in paragraph (a)(2) of this section; (ii) The IDR entity must have procedures in place to ensure that personnel assigned to a determination do not have any conflicts of interest regarding any party to the dispute within the 1 year immediately preceding an assignment of dispute determination, similar to the requirements laid out in 18 U.S.C. 207(b). In order to satisfy this requirement, if certified, the IDR entity must ensure that any personnel assigned to a determination do not have any conflicts of interest as defined in paragraph (a)(2) of this section. (iii) Following certification under this paragraph (e), if a certified IDR entity acquires control of, becomes controlled by, or comes under common control with any entity described in paragraph (e)(3)(i) of this section, the certified IDR entity must notify the Secretary in writing no later than 3 business days after the acquisition or exercise of control and shall be subject to the revocation of certification under paragraph (e)(6)(ii) of this section. (4) Period of certification. (5) Petition for denial or revocation In general. (ii) Content of petition. (A) The identity of the IDR entity seeking certification or certified IDR entity that is the subject of the petition; (B) The reason(s) for the petition; (C) Whether the petition seeks denial or revocation of a certification; (D) Documentation to support the reasons outlined in the petition; and (E) Other information as may be required by the Secretary. (iii) Process. (B) If the Secretary finds that the petition adequately shows a failure of the IDR entity seeking certification or the certified IDR entity to follow the requirements of this paragraph (e), the Secretary, jointly with the Secretary of the Treasury and the Secretary of Health and Human Services, will notify the IDR entity seeking certification or the certified IDR entity by providing a de-identified copy of the petition. Following the notification, the IDR entity seeking certification or certified IDR entity will have 10 business days to provide a response. After the time period for providing the response has passed, the Secretary, jointly with the Secretary of the Treasury and the Secretary of Health and Human Services, will review the response (if any), determine whether a denial or revocation of a certification is warranted, and issue a notice of the decision to the IDR entity or certified IDR entity and to the petitioner. This decision will be subject to the appeal requirements of paragraph (e)(6)(v) of this section. (C) Effect on certification under petition. Regarding a petition for revocation of a certified IDR entity's certification, if the Secretary, jointly with the Secretary of the Treasury and the Secretary of Health and Human Services, finds that the petition adequately shows a failure to comply with the requirements of this paragraph (e), following the Secretary's notification of the failure to the certified IDR entity under paragraph (e)(5)(iii)(B) of this section, the certified IDR entity may continue to work on previously assigned determinations but may not accept new determinations until the Secretary issues a notice of the decision to the certified IDR entity finding that a revocation of certification is not warranted. (6) Denial of IDR entity certification or revocation of certified IDR entity certification Denial of IDR entity certification. (A) The IDR entity fails to meet the applicable standards set forth under this paragraph (e); (B) The IDR entity has committed or participated in fraudulent or abusive activities, including, during the certification process, submitting fraudulent data, or submitting information or data the IDR entity knows to be false to the Secretary, the Secretary of the Treasury or the Secretary of Health and Human Services; (C) The IDR entity has failed to comply with requests for information from the Secretary, the Secretary of the Treasury, or the Secretary of Health and Human Services as part of the certification process; (D) In conducting payment determinations, including those outside the Federal IDR process, the IDR entity has failed to meet the standards that applied to those determinations or reviews, including standards of independence and impartiality; or (E) The IDR entity is otherwise not fit or qualified to make determinations under the Federal IDR process. (ii) Revocation of certification of a certified IDR entity. (A) The certified IDR entity has a pattern or practice of noncompliance with any requirements of this paragraph (e); (B) The certified IDR entity is operating in a manner that hinders the efficient and effective administration of the Federal IDR process; (C) The certified IDR entity no longer meets the applicable standards for certification set forth under this paragraph (e); (D) The certified IDR entity has committed or participated in fraudulent or abusive activities, including submission of false or fraudulent data to the Secretary, the Secretary of the Treasury, or the Secretary of Health and Human Services; (E) The certified IDR entity lacks the financial viability to provide arbitration under the Federal IDR process; (F) The certified IDR entity has failed to comply with requests from the Secretary, the Secretary of the Treasury, or the Secretary of Health and Human Services made as part of an audit, including failing to submit all records of the certified IDR entity that pertain to its activities within the Federal IDR process; or (G) The certified IDR entity is otherwise no longer fit or qualified to make determinations. (iii) Notice of denial or revocation. (iv) Request for appeal of denial or revocation. (v) Denial or final revocation. (f) Reporting of information relating to the Federal IDR process Reporting of information. (i) The number of notices of IDR initiation submitted under paragraph (b)(2) of this section to the certified IDR entity during the immediately preceding month; (ii) The size of the provider practices and the size of the facilities submitting notices of IDR initiation under paragraph (b)(2) of this section during the immediately preceding month, as required to be provided to the certified IDR entity under paragraph (c)(4)(i)(A)( 2 (iii) The number of such notices of IDR initiation with respect to which a determination was made under paragraph (c)(4)(ii) of this section; (iv) The number of times during the month that the out-of-network rate determined (or agreed to) under this section has exceeded the qualifying payment amount, specified by qualified IDR items and services; (v) With respect to each notice of IDR initiation under paragraph (b)(2) of this section for which such a determination was made, the following information: (A) A description of the qualified IDR items and services included with respect to the notification, including the relevant billing and service codes; (B) The relevant geographic region for purposes of the qualifying payment amount for the qualified IDR items and services with respect to which the notification was provided; (C) The amount of the offer submitted under paragraph (c)(4)(i) of this section by the plan or issuer (as applicable) and by the provider or facility (as applicable) expressed as a dollar amount and as a percentage of the qualifying payment amount; (D) Whether the offer selected by the certified IDR entity under paragraph (c)(4) of this section was the offer submitted by the plan or issuer (as applicable) or by the provider or facility (as applicable); (E) The amount of the selected offer expressed as a dollar amount and as a percentage of the qualifying payment amount; (F) The rationale for the certified IDR entity's decision, including the extent to which the decision relied on the criteria in paragraphs (c)(4)(iii)(B) through (D) of this section; (G) The practice specialty or type of each provider or facility, respectively, involved in furnishing each qualified IDR item or service; (H) The identity for each plan or issuer, and provider or facility, with respect to the notification. Specifically, each certified IDR entity must provide each party's name and address, as applicable; and (I) For each determination, the number of business days elapsed between selection of the certified IDR entity and the determination of the out-of-network rate by the certified IDR entity. (vi) The total amount of certified IDR entity fees paid to the certified IDR entity under paragraph (d)(1) of this section during the month. (2) [Reserved] (g) Extension of time periods for extenuating circumstances In general. (i) For a specific dispute, the Secretary determines that the parties or certified IDR entity cannot meet applicable timeframes due to matters beyond the control of one or both parties or the certified IDR entity, or for other good cause. The certified IDR entity or either party may also submit a request for an extension due to extenuating circumstances to the Secretary through the Federal IDR portal. The requesting certified IDR entity or party must attest that it will take prompt action to ensure that the certified IDR entity's payment determination under this section may be made as soon as administratively practicable under the circumstances; or (ii) The Secretary determines that the parties or certified IDR entity cannot meet applicable timeframes due to systematic delays in processing disputes under the Federal IDR process, such as an unforeseen volume of disputes or Federal IDR portal system failures. Extensions provided due to extenuating circumstances caused by an unforeseen volume of disputes will be applied to the timeframe for eligibility determinations under paragraph (c)(2) of this section. Extensions provided due to extenuating circumstances caused by systems failures within the Federal IDR portal will be applied to the Federal IDR process timeframe(s) determined relevant by the Secretary. The Secretary will post a public notice regarding any extensions of time periods under this paragraph (g)(1)(ii). (A) Timeframe following an extension to eligibility determination. ( 1 Submission of offers. ( 2 Payment determination. (B) Timeframe following an extension to other timeframes in the Federal IDR process. (2) [Reserved] (h) Applicability date. (2) Paragraph (b) of this section is applicable to disputes with open negotiation periods beginning 90 calendar days after the Departments issue guidance announcing that the functionality supporting these provisions has become available. (3) Paragraph (c)(1) of this section, regarding the selection of a certified IDR entity, is applicable for plan years beginning on or after January 1, 2022, and paragraph (c)(1) of this section is applicable to disputes with open negotiation periods beginning 90 calendar days after the Departments issue guidance announcing that the functionality supporting these provisions has become available. (4) Paragraph (c)(2) of this section, regarding the Federal IDR process eligibility review, paragraph (c)(3) of this section, regarding the authority to continue negotiations or withdraw, and paragraph (c)(4) of this section, regarding the treatment of batched and bundled qualified IDR items and services, are applicable for plan years beginning on or after January 1, 2022. Paragraphs (c)(3)(i) and (c)(3)(ii)(C) and (D) of this section are applicable beginning on November 1, 2026. Paragraphs (c)(2), (c)(3)(ii)(A) and (B), and (c)(4) of this section are applicable to disputes with open negotiation periods beginning 90 calendar days after the Departments issue guidance announcing that the functionality supporting these provisions has become available. (5) Paragraphs (c)(5)(ii) and (iii) of this section regarding payment determination and notification and considerations in payment determinations and paragraph (c)(5)(vi)(B) of this section regarding written decisions are applicable for items or services furnished on or after October 25, 2022, are applicable for plan years beginning on or after January 1, 2022. Paragraphs (c)(5)(i), (c)(5)(v) through (c)(5)(vi)(A), and (c)(5)(vii) through (ix) of this section regarding submission of offers, prohibition on consideration of certain factors, written decision, effects of determination, recordkeeping requirements, and payment are applicable for plan years beginning on or after January 1, 2022. Paragraphs (c)(5)(i) and (ii) and (c)(5)(vii)(B) and (C) of this section regarding the deadlines for the submission of offers, payment determination and notification, suspension of certain subsequent IDR requests, and subsequent submission of requests permitted are applicable to disputes with open negotiation periods beginning 90 calendar days after the Departments issue guidance announcing that the functionality supporting these provisions has become available. (6) Paragraph (d)(1) of this section regarding the certified IDR entity fee is applicable to disputes initiated on or after August 3, 2026. Paragraph (d)(2)(ii) of this section regarding the administrative fee is applicable to disputes initiated on or after June 11, 2026. Paragraph (d)(2)(iii) of this section regarding failure to pay the administrative fee is applicable beginning on August 3, 2026. (7) Paragraph (e) of this section is applicable for plan years beginning on or after January 1, 2022, except that the provisions regarding IDR entity certification at paragraphs (e)(1), (e)(2)(i) through (vi), (e)(2)(x) and (xi), and (e)(3) through (6) of this section are applicable beginning on October 7, 2021. Paragraph (e)(2)(ix) of this section regarding procedures to retain the certified IDR entity fee is applicable beginning on August 3, 2026. (8) Paragraph (f) of this section is applicable for plan years beginning on or after January 1, 2022, except that paragraph (f)(1)(v)(F) of this section regarding reporting of information relating to the Federal IDR process is applicable for items or services furnished on or after October 25, 2022, for plan years beginning on or after January 1, 2022. (9) Paragraph (g) of this section regarding the extension of time periods for extenuating circumstances is applicable for plan years beginning on or after January 1, 2022. Paragraph (g) of this section is applicable beginning on November 1, 2026. (10) Until the relevant applicability date for the requirements of this section, plans, issuers, providers, facilities, providers of air ambulance services, and certified IDR entities are required to continue to comply with the corresponding requirements of § 2590.716-8 in effect prior to June 4, 2026. (i) Severability. (2) The provisions of paragraphs (b)(1), (c)(2)(ii), (c)(4), (d)(2), and (g)(1) of this section are intended to be severable from one another, from any grant of forbearance from removal resulting from this subpart, and from any provision referenced in those paragraphs. The provisions in this section are intended to be severable from the provisions in §§ 2590.716-6, 2590.716-6A, and 2590.716-9, from any grant of forbearance from removal resulting from this subpart, and from any provision referenced in §§ 2590.716-6, 2590.716-6A, and 2590.716-9. [86 FR 56112, Oct. 7, 2021, as amended at 87 FR 52649, Aug. 26, 2022; 88 FR 88524, Dec. 21, 2023; 91 FR 34059, June 4, 2026; 91 FR 55465, Aug. 28, 2026] § 2590.716-9 Federal independent dispute resolution registry of group health plans, health insurance issuers, and Federal Employees Health Benefits Program Carriers. (a) Establishment of Federal independent dispute resolution registry. (b) Federal IDR registration Registration requirement. (2) Required data elements. (i) The legal business name (if any) of the self-insured group health plan or issuer and, if applicable, the legal business name of the self-insured group health plan sponsor; (ii) Whether the registrant is a self-insured group health plan subject to ERISA or an issuer offering group market insurance coverage; (iii) For issuers offering group market insurance coverage, the State(s) in which the plan is offered or the coverage is licensed; (iv) For self-insured group health plans not otherwise subject to State law, any State(s) in which the group health plan has properly effectuated an election to opt in to a specified State law as defined in § 2590.716-3, or an All-Payer Model Agreement under section 1115A of the Social Security Act, if the terms of that agreement allow a plan not otherwise subject to the agreement to opt in; (v) Contact information, including a telephone number and email address, for the appropriate office or person to initiate open negotiation for purposes of determining an amount of payment (including cost sharing) for such item or service; and contact information, including a telephone number and email address, for the appropriate office or person to initiate the Federal IDR process; (vi) The 5-digit Health Insurance Oversight System (HIOS) identifier, if available; and for self-insured group health plans, the plan's or the plan sponsor's Employer Identification Number (EIN) and the plan's plan number (PN), if a PN is available; (vii) Additional information needed to identify the plan or issuer and the applicable Federal and State requirements for determining appropriate out-of-network payment rates for items or services to which the protections against balance billing in this part apply, as specified by the Secretary in guidance; and (viii) Additional information needed for purposes of administrative or certified IDR entity fee collection, as specified by the Secretary in guidance. (3) Updating disclosures. (4) Third-party authority. (c) Severability. (2) The provisions in this section are intended to be severable from the provisions in §§ 2590.716-6, 2590.716-6A, and 2590.716-8, from any grant of forbearance from removal resulting from this subpart, and from any provision referenced in §§ 2590.716-6, 2590.716-6A, and 2590.716-8. [91 FR 34069, June 4, 2026; 91 FR 55468, Aug. 28, 2026] § 2590.717-1 Preventing surprise medical bills for air ambulance services. (a) In general. (b) Coverage requirements. (1) The cost-sharing requirements with respect to the services must be the same requirements that would apply if the services were provided by a participating provider of air ambulance services. (2) The cost-sharing requirement must be calculated as if the total amount that would have been charged for the services by a participating provider of air ambulance services were equal to the lesser of the qualifying payment amount (as determined in accordance with § 2590.716-6) or the billed amount for the services. (3) The cost-sharing amounts must be counted towards any in-network deductible and in-network out-of-pocket maximums (including the annual limitation on cost sharing under section 2707(b) of the PHS Act) (as applicable) applied under the plan or coverage (and the in-network deductible and out-of-pocket maximums must be applied) in the same manner as if the cost-sharing payments were made with respect to services furnished by a participating provider of air ambulance services. (4) The plan or issuer must— (i) Not later than 30 calendar days after the bill for the services is transmitted by the provider of air ambulance services, determine whether the services are covered under the plan or coverage and, if the services are covered, send to the provider an initial payment or a notice of denial of payment. For purposes of this paragraph (b)(4)(i), the 30-calendar-day period begins on the date the plan or issuer receives the information necessary to decide a claim for payment for the services. (ii) Pay a total plan or coverage payment directly to the nonparticipating provider furnishing such air ambulance services that is equal to the amount by which the out-of-network rate for the services exceeds the cost-sharing amount for the services (as determined in accordance with paragraphs (b)(1) and (2) of this section), less any initial payment amount made under paragraph (b)(4)(i) of this section. The total plan or coverage payment must be made in accordance with the timing requirement described in section 717(b)(6) of ERISA, or in cases where the out-of-network rate is determined under a specified State law or All-Payer Model Agreement, such other timeframe as specified by the State law or All-Payer Model Agreement. (c) Applicability date. § 2590.717-2 Independent dispute resolution process for air ambulance services. (a) Definitions. (b) Determination of out-of-network rates to be paid by health plans and health insurance issuers; independent dispute resolution process In general. (2) Considerations for air ambulance services. (i) The quality and outcomes measurements of the provider that furnished the services. (ii) The acuity of the condition of the participant or beneficiary receiving the service, or the complexity of furnishing the service to the participant or beneficiary. (iii) The training, experience, and quality of the medical personnel that furnished the air ambulance services. (iv) Ambulance vehicle type, including the clinical capability level of the vehicle. (v) Population density of the point of pick-up (as defined in 42 CFR 414.605) for the air ambulance (such as urban, suburban, rural, or frontier). (vi) Demonstrations of good faith efforts (or lack thereof) made by the nonparticipating provider of air ambulance services or the plan or issuer to enter into network agreements with each other and, if applicable, contracted rates between the provider of air ambulance services and the plan or issuer, as applicable, during the previous 4 plan years. (3) Weighing considerations. (4) Reporting of information relating to the IDR process. (i) The number of notices of IDR initiation submitted under the Federal IDR process to the certified IDR entity that pertain to air ambulance services during the immediately preceding month; (ii) The number of such notices of IDR initiation with respect to which a final determination was made under § 2590.716-8(c)(4)(ii) of this part (as applied by paragraph (b)(1) of this section); (iii) The number of times the payment amount determined (or agreed to) under this subsection has exceeded the qualifying payment amount, specified by services; (iv) With respect to each notice of IDR initiation under § 2590.716-8(b)(2) of this part (as applied by paragraph (b)(1) of this section) for which a determination was made, the following information: (A) A description of each air ambulance service included in such notification, including the relevant billing and service codes; (B) The point of pick-up (as defined in 42 CFR 414.605) for the services included in such notification; (C) The amount of the offers submitted under § 2590.716-8(c)(4)(i) (as applied by paragraph (b)(1) of this section) by the group health plan or health insurance issuer (as applicable) and by the nonparticipating provider of air ambulance services, expressed as a dollar amount and as a percentage of the qualifying payment amount; (D) Whether the offer selected by the certified IDR entity under § 2590.716-8(c)(4)(ii) of this part (as applied by paragraph (b)(1) of this section) to be the payment amount applied was the offer submitted by the plan or issuer (as applicable) or by the provider of air ambulance services; (E) The amount of the selected offer expressed as a dollar amount and as a percentage of the qualifying payment amount; (F) The rationale for the certified IDR entity's decision, including the extent to which the decision relied on the criteria in paragraph (b)(2) of this section and § 2590.716-8(c)(4)(iii)(C) and (D); (G) Air ambulance vehicle type, including the clinical capability level of such vehicle (to the extent this information has been provided to the certified IDR entity); (H) The identity for each plan or issuer and provider of air ambulance services, with respect to the notification. Specifically, each certified IDR entity must provide each party's name and address, as applicable; and (I) For each determination, the number of business days elapsed between selection of the certified IDR entity and the selection of the payment amount by the certified IDR entity. (v) The total amount of certified IDR entity fees paid to the certified IDR entity under paragraph § 2590.716-8(d)(1) of this part (as applied by paragraph (b)(1) of this section) during the month for determinations involving air ambulance services. (c) Applicability date. [86 FR 56121, Oct. 7, 2021, as amended at 87 FR 52651, Aug. 26, 2022] § 2590.722 Choice of health care professional. (a) Choice of health care professional Designation of primary care provider In general. (ii) Construction. (iii) Example. (A) Facts. (B) Conclusion. Example, (2) Designation of pediatrician as primary care provider In general. (ii) Construction. (iii) Examples. (A) Example 1 1 Facts. A B A B ( 2 Conclusion. Example 1, A B A (B) Example 2 1 Facts. Example 1 A A B B A ( 2 Conclusion. Example 2, A' (3) Patient access to obstetrical and gynecological care General rights Direct access. (B) Obstetrical and gynecological care. (ii) Application of paragraph. (A) Provides coverage for obstetrical or gynecological care; and (B) Requires the designation by a participant or beneficiary of a participating primary care provider. (iii) Construction. (A) Waive any exclusions of coverage under the terms and conditions of the plan or health insurance coverage with respect to coverage of obstetrical or gynecological care; or (B) Preclude the group health plan or health insurance issuer involved from requiring that the obstetrical or gynecological provider notify the primary care health care professional or the plan or issuer of treatment decisions. (iv) Examples. (A) Example 1 1 Facts. A, B, A' ( 2 Conclusion. Example 1, A' (B) Example 2 1 Facts. Example 1 A C, ( 2 Conclusion. Example 2, C (C) Example 3 1 Facts. Example 1 B A' ( 2 Conclusion. Example 3, A B (D) Example 4 1 Facts. ( 2 Conclusion. Example 4, (4) Notice of right to designate a primary care provider In general. (A) Under paragraph (a)(1)(i) of this section, that any participating primary care provider who is available to accept the participant or beneficiary can be designated; (B) Under paragraph (a)(2)(i) of this section, with respect to a child, that any participating physician who specializes in pediatrics can be designated as the primary care provider; and (C) Under paragraph (a)(3)(i) of this section, that the plan may not require authorization or referral for obstetrical or gynecological care by a participating health care professional who specializes in obstetrics or gynecology. (ii) Timing. (iii) Model language. (A) For plans and issuers that require or allow for the designation of primary care providers by participants, or beneficiaries, insert: [Name of group health plan or health insurance issuer] generally [requires/allows] the designation of a primary care provider. You have the right to designate any primary care provider who participates in our network and who is available to accept you or your family members. [If the plan or health insurance coverage designates a primary care provider automatically, insert: Until you make this designation, [name of group health plan or health insurance issuer] designates one for you.] For information on how to select a primary care provider, and for a list of the participating primary care providers, contact the [plan administrator or issuer] at [insert contact information]. (B) For plans and issuers that require or allow for the designation of a primary care provider for a child, add: For children, you may designate a pediatrician as the primary care provider. (C) For plans and issuers that provide coverage for obstetric or gynecological care and require the designation by a participant or beneficiary of a primary care provider, add: You do not need prior authorization from [name of group health plan or issuer] or from any other person (including a primary care provider) in order to obtain access to obstetrical or gynecological care from a health care professional in our network who specializes in obstetrics or gynecology. The health care professional, however, may be required to comply with certain procedures, including obtaining prior authorization for certain services, following a pre-approved treatment plan, or procedures for making referrals. For a list of participating health care professionals who specialize in obstetrics or gynecology, contact the [plan administrator or issuer] at [insert contact information]. (b) Applicability date. § 2590.725-1 Definitions. For purposes of this section, the following definitions apply in addition to the definitions in § 2590.716-3: Brand prescription drug Dosage unit Federal Employees Health Benefits (FEHB) line of business Life-years Market segment Premium amount Prescription drug (drug) Prescription drug rebates, fees, and other remuneration Reference year Reporting entity Student market Therapeutic class Total annual spending [86 FR 66699, Nov. 23, 2021] § 2590.725-2 Reporting requirements related to prescription drug and health care spending. (a) General requirement. (b) Timing and form of report. (c) Transfer of business. (d) Reporting entities and special rules to prevent unnecessary duplication Special rule for insured group health plans. (2) Other contractual arrangements. (e) Applicability date. [86 FR 66699, Nov. 23, 2021] § 2590.725-3 Aggregate reporting. (a) General requirement. (b) Aggregation by reporting entity In general. (2) Multiple reporting entities. (ii) The Secretary, jointly with the Secretary of the Treasury and the Secretary of Health and Human Services, may specify in guidance alternative or additional aggregation methods for data submitted by multiple reporting entities, to ensure a balance between compliance burdens and a data aggregation level that facilitates the development of the biannual public report required under section 725(b) of ERISA. (3) Group health insurance coverage with dual contracts. (c) Aggregation by State. (2) Experience with respect to each self-funded group health plan must be included on the report for the State where the plan sponsor has its principal place of business. (3) For individual market business sold through an association, experience must be attributed to the issue State of the certificate of coverage. (4) For health coverage provided to plans through a group trust or multiple employer welfare arrangement, the experience must be included in the report for the State where the employer (if the plan is sponsored at the individual employer level) or the association (if the association qualifies as an employer under ERISA section 3(5)) has its principal place of business or the state where the association is incorporated, in the case of an association with no principal place of business. (d) Applicability date. [86 FR 66699, Nov. 23, 2021] § 2590.725-4 Required information. (a) Information for each plan or coverage. (1) The identifying information for plans, issuers, plan sponsors, and any other reporting entities. (2) The beginning and end dates of the plan year that ended on or before the last day of the reference year. (3) The number of participants and beneficiaries, as applicable, covered on the last day of the reference year. (4) Each State in which the plan or coverage is offered. (b) Information for each state and market segment. (1) The 50 brand prescription drugs most frequently dispensed by pharmacies, and for each such drug, the data elements listed in paragraph (b)(5) of this section. The most frequently dispensed drugs must be determined according to total number of paid claims for prescriptions filled during the reference year for each drug. (2) The 50 most costly prescription drugs and for each such drug, the data elements listed in paragraph (b)(5) of this section. The most costly drugs must be determined according to total annual spending on each drug. (3) The 50 prescription drugs with the greatest increase in expenditures between the year immediately preceding the reference year and the reference year, and for each such drug: The data elements listed in paragraph (b)(5) of this section for the year immediately preceding the reference year, and the data elements listed in paragraph (b)(5) of this section for the reference year. The drugs with the greatest increase in expenditures must be determined based on the increase in total annual spending from the year immediately preceding the reference year to the reference year. A drug must be approved for marketing or issued an Emergency Use Authorization by the Food and Drug Administration for the entirety of the year immediately preceding the reference year and for the entirety of the reference year to be included in the data submission as one of the drugs with the greatest increase in expenditures. (4) Total annual spending on health care services by the plan or coverage and by participants and beneficiaries, as applicable, broken down by the type of costs, including— (i) Hospital costs; (ii) Health care provider and clinical service costs, for primary care and specialty care separately; (iii) Costs for prescription drugs, separately for drugs covered by the plan's or issuer's pharmacy benefit and drugs covered by the plan's or issuer's hospital or medical benefit; and (iv) Other medical costs, including wellness services. (5) Prescription drug spending and utilization, including— (i) Total annual spending by the plan or coverage; (ii) Total annual spending by the participants and beneficiaries, as applicable, enrolled in the plan or coverage, as applicable; (iii) The number of participants and beneficiaries, as applicable, with a paid prescription drug claim; (iv) Total dosage units dispensed; and (v) The number of paid claims. (6) Premium amounts, including— (i) Average monthly premium amount paid by employers and other plan sponsors on behalf of participants and beneficiaries, as applicable; (ii) Average monthly premium amount paid by participants and beneficiaries, as applicable; and (iii) Total annual premium amount and the total number of life-years. (7) Prescription drug rebates, fees, and other remuneration, including— (i) Total prescription drug rebates, fees, and other remuneration, and the difference between total amounts that the plan or issuer pays the entity providing pharmacy benefit management services to the plan or issuer and total amounts that such entity pays to pharmacies. (ii) Prescription drug rebates, fees, and other remuneration, excluding bona fide service fees, broken down by the amounts passed through to the plan or issuer, the amounts passed through to participants and beneficiaries, as applicable, and the amounts retained by the entity providing pharmacy benefit management services to the plan or issuer; and the data elements listed in paragraph (b)(5) of this section— (A) For each therapeutic class; and (B) For each of the 25 prescription drugs with the greatest amount of total prescription drug rebates and other price concessions for the reference year. (8) The method used to allocate prescription drug rebates, fees, and other remuneration, if applicable. (9) The impact of prescription drug rebates, fees, and other remuneration on premium and cost sharing amounts. (c) Applicability date. [86 FR 66699, Nov. 23, 2021] Subpart E—General Provisions Related to Subparts B and C Source: 62 FR 16941, Apr. 8, 1997, unless otherwise noted. Redesignated at 65 FR 82142, Dec. 27, 2000, and further redesignated at 86 FR 36959, July 13, 2021. § 2590.731 Preemption; State flexibility; construction. (a) Continued applicability of State law with respect to health insurance issuers. (b) Continued preemption with respect to group health plans. (c) Special rules In general. (2) Exceptions. (d) Definitions State law. State law A (2) State. State [69 FR 78778, Dec. 30, 2004; 70 FR 21147, Apr. 25, 2005; 79 FR 10312, Feb. 24, 2014] § 2590.732 Special rules relating to group health plans. (a) Group health plan Defined. (2) Determination of number of plans. (b) General exception for certain small group health plans. (2) The following requirements apply without regard to paragraph (b)(1) of this section: (i) Section 2590.702(b) of this part, as such section applies with respect to genetic information as a health factor. (ii) Section 2590.702(c) of this part, as such section applies with respect to genetic information as a health factor. (iii) Section 2590.702(e) of this part, as such section applies with respect to genetic information as a health factor. (iv) Section 2590.702-1(b) of this part. (v) Section 2590.702-1(c) of this part. (vi) Section 2590.702-1(d) of this part. (vii) Section 2590.702-1(e) of this part. (viii) Section 2590.711 of this part. (c) Excepted benefits In general. (2) Benefits excepted in all circumstances. (i) Coverage only for accident (including accidental death and dismemberment); (ii) Disability income coverage; (iii) Liability insurance, including general liability insurance and automobile liability insurance; (iv) Coverage issued as a supplement to liability insurance; (v) Workers' compensation or similar coverage; (vi) Automobile medical payment insurance; (vii) Credit-only insurance (for example, mortgage insurance); and (viii) Coverage for on-site medical clinics. (ix) Travel insurance, within the meaning of § 2590.701-2. (3) Limited excepted benefits In general. (ii) Not an integral part of a group health plan. (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. (iii) Limited scope Dental benefits. (B) Vision benefits. (iv) Long-term care. (A) Subject to State long-term care insurance laws; (B) For qualified long-term care services, as defined in section 7702B(c)(1) of the Internal Revenue Code, or provided under a qualified long-term care insurance contract, as defined in section 7702B(b) of the Internal Revenue Code; or (C) Based on cognitive impairment or a loss of functional capacity that is expected to be chronic. (v) Health flexible spending arrangements. (A) Other group health plan coverage, not limited to excepted benefits, is made available for the year to the class of participants by reason of their employment; and (B) The arrangement is structured so that the maximum benefit payable to any participant in the class for a year cannot exceed two times the participant's salary reduction election under the arrangement for the year (or, if greater, cannot exceed $500 plus the amount of the participant's salary reduction election). For this purpose, any amount that an employee can elect to receive as taxable income but elects to apply to the health flexible spending arrangement is considered a salary reduction election (regardless of whether the amount is characterized as salary or as a credit under the arrangement). (vi) Employee assistance programs. (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 ( 2 (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. (vii) Limited wraparound coverage. (A) Covers additional benefits. (B) Limited in amount. 1 2 ( 1 ( 2 (C) Nondiscrimination. ( 1 No preexisting condition exclusion. ( 2 No discrimination based on health status. ( 3 No discrimination in favor of highly compensated individuals. (D) Plan eligibility requirements. 1 2 ( 1 Limited wraparound coverage that wraps around eligible individual insurance for persons who are not full-time employees. 1 ( i 1 i ( ii ( iii ( 2 Limited coverage that wraps around Multi-State Plan coverage. 2 ( i ( ii 2 ii ( iii 2 iii ( iv (E) Reporting 1 Reporting by group health plans and group health insurance issuers. 2 ( 2 Reporting by group health plan sponsors. (F) Pilot program with sunset. ( 1 ( 2 (viii) Health reimbursement arrangements (HRAs) and other account-based group health plans. (A) Otherwise not an integral part of the plan. (B) Benefits are limited in amount 1 Limit on annual amounts made available. ( 2 Carryover amounts. ( 3 Multiple HRAs or other account-based group health plans. (C) Prohibition on reimbursement of certain health insurance premiums. (D) Uniform availability. (E) Notice requirement. See (F) Special rule. ( 1 ( 2 ( 3 ( 4 ( 5 Federal Register (4) Noncoordinated benefits Excepted benefits that are not coordinated. (ii) Conditions. (A) The benefits are provided under a separate policy, certificate, or contract of insurance; (B) There is no coordination between the provision of the benefits and an exclusion of benefits under any group health plan maintained by the same plan sponsor; and (C) The benefits are paid with respect to an event without regard to whether benefits are provided with respect to the event under any group health plan maintained by the same plan sponsor. (D) For plan years beginning on or after January 1, 2025, with respect to hospital indemnity or other fixed indemnity insurance: ( 1 ( 2 1 ( 3 1 2 (iii) Example. Example. (i) Facts. (ii) Conclusion. Example, (iv) Severability. (5) Supplemental benefits. (A) Medicare supplemental health insurance (as defined under section 1882(g)(1) of the Social Security Act; also known as Medigap or MedSupp insurance); (B) Coverage supplemental to the coverage provided under Chapter 55, Title 10 of the United States Code (also known as TRICARE supplemental programs); and (C) Similar supplemental coverage provided to coverage under a group health plan. (ii) The rules of this paragraph (c)(5) are illustrated by the following example: Example. (i) Facts. (ii) Conclusion. Example, (d) Treatment of partnerships. (1) Treatment as a group health plan. (2) Employment relationship. employer employee (3) Participants of group health plans. (i) In connection with a group health plan maintained by a partnership, the individual is a partner in relation to the partnership. (ii) In connection with a group health plan maintained by a self-employed individual (under which one or more employees are participants), the individual is the self-employed individual. (e) Determining the average number of employees. [69 FR 78778, Dec. 30, 2004, as amended at 74 FR 51687, Oct. 7, 2009; 79 FR 10312, Feb. 24, 2014; 79 FR 59136, Oct. 1, 2014; 80 FR 14005, Mar. 18, 2015; 81 FR 75325, Oct. 31, 2016; 84 FR 29013, June 20, 2019; 89 FR 23415, Apr. 3, 2024] § 2590.734 Enforcement. [Reserved] § 2590.736 Applicability dates. Sections 2590.701-1 through 2590.701-8 and 2590.731 through 2590.736 are applicable for plan years beginning on or after July 1, 2005. Notwithstanding the previous sentence, for short-term, limited-duration insurance sold or issued on or after September 1, 2024, the definition of short-term, limited-duration insurance short-term, limited-duration insurance short-term, limited-duration insurance [89 FR 23416, Apr. 3, 2024]

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