PART 146—REQUIREMENTS FOR THE GROUP HEALTH INSURANCE MARKET Authority: 42 U.S.C. 300gg-1 through 300gg-5, 300gg-11 through 300gg-23, 300gg-91, and 300gg-92. Source: 62 FR 16958, Apr. 8, 1997, unless otherwise noted. Subpart A—General Provisions § 146.101 Basis and scope. (a) Statutory basis. (b) Scope. (1) Subpart B. (2) Subpart C. (3) Subpart D. (4) Subpart E. (5) Subpart F. [62 FR 16958, Apr. 8, 1997, as amended at 63 FR 57559, Oct. 27, 1998; 71 FR 75046, Dec. 13, 2006; 74 FR 51688, Oct. 7, 2009, as amended at 75 FR 27138, May 13, 2010; 79 FR 10313, Feb. 24, 2014] Subpart B—Requirements Relating to Access and Renewability of Coverage, and Limitations on Preexisting Condition Exclusion Periods § 146.111 Preexisting condition exclusions. (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 78783, Dec. 30, 2004, as amended at 75 FR 37235, June 28, 2010; 79 FR 10313, Feb. 24, 2014; 80 FR 72274, Nov. 18, 2015] § 146.113 Rules relating to creditable coverage. (a) General rules Creditable coverage. creditable coverage (i) A group health plan as defined in § 146.145(a). (ii) Health insurance coverage as defined in § 144.103 of this chapter (whether or not the entity offering the coverage is subject to the requirements of this part and 45 CFR part 148 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 78788, Dec. 30, 2004, as amended at 79 FR 10314, Feb. 24, 2014] § 146.115 Certification and disclosure of previous coverage. (a) In general. See (b) Applicability. [79 FR 10314, Feb. 24, 2014] § 146.117 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 § 146.121(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. Example 3. (i) Facts. C X. X C 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 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. X D E 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 78794, Dec. 30, 2004, as amended at 79 FR 10314, Feb. 24, 2014] § 146.119 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 10314, Feb. 24, 2014] § 146.120 Interaction with the Family and Medical Leave Act. [Reserved] § 146.121 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 § 144.103 of this chapter; (iii) Claims experience; (iv) Receipt of health care; (v) Medical history; (vi) Genetic information, as defined in § 146.122(a) of this subchapter; (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 § 146.117, 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 (i) A group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, may not establish any rule for eligibility (including continued eligibility) of any individual to enroll for benefits under the terms of the plan or group health insurance coverage that discriminates based on any health factor that relates to that individual or a dependent of that individual. This rule is subject to the provisions of paragraph (b)(2) of this section (explaining how this rule applies to benefits), paragraph (d) of this section (containing rules for establishing groups of similarly situated individuals), paragraph (e) of this section (relating to nonconfinement, actively-at-work, and other service requirements), paragraph (f) of this section (relating to wellness programs), and paragraph (g) of this section (permitting favorable treatment of individuals with adverse health factors). (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 (b)(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 (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) A group health plan applies for a group health policy offered by an issuer. Individual 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 (ii) Conclusion. Example 2. (i) Facts. E (ii) Conclusion. Example 2 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' Example 2. (i) Facts. Example 1 F F (ii) Conclusion. Example 2 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, § 147.130 of this subchapter 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 rules: ( 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 Generally. (2) Special rule for self-funded nonfederal governmental plans exempted under 45 CFR 146.180. (A) Must notify the individual that the plan will be coming into compliance with the requirements of this section, specify the effective date of compliance, and inform the individual regarding any enrollment restrictions that may apply under the terms of the plan once the plan is in compliance with this section (as a matter of administrative convenience, the notice may be disseminated to all employees); (B) Must give the individual an opportunity to enroll that continues for at least 30 days; (C) Must permit coverage to be effective as of the first day of plan coverage for which an exemption election under § 146.180 of this part (with regard to this section) is no longer in effect; and (D) May not treat the individual as a late enrollee or a special enrollee. (ii) For purposes of this paragraph (i)(2), an individual is considered to have been denied coverage if the individual failed to apply for coverage because, given an exemption election under § 146.180 of this part, it was reasonable to believe that an application for coverage would have been denied based on a health factor. (iii) The rules of this paragraph (i)(2) are illustrated by the following examples: Example 1. (i) Facts. D D D D D D D (ii) Conclusion. Example 1 Example 2. (i) Facts. E E E E E E E E E E (ii) Conclusion. Example 2 [71 FR 75046, Dec. 13, 2006, as amended at 74 FR 51688, Oct. 7, 2009; 78 FR 33187, June 3, 2013; 79 FR 10314, Feb. 24, 2014] § 146.122 Additional requirements prohibiting discrimination based on genetic information. (a) Definitions. (1) Collect (2) Family member (i) A dependent (as defined in § 144.103 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 (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 § 146.121(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 § 146.121(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 51688, Oct. 7, 2009] § 146.123 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, if the HRA is subject to the Employee Retirement Income Security Act (ERISA), a statement that individual health insurance coverage in which the participant and any covered dependents are enrolled is not subject to ERISA, if the conditions under 29 CFR 2510.3-1(l) 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 § 147.102(b) of this subchapter; (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 § 147.116 of this subchapter); (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 29014, June 20, 2019] § 146.125 Applicability dates. Section 144.103 of this subchapter and §§ 146.111 through 146.119, 146.143, and 146.145 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 23418, Apr. 3, 2024] Subpart C—Requirements Related to Benefits § 146.130 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. (1) Required statement. (2) Disclosure notice. Statement of Rights Under the Newborns' and Mothers' Health Protection Act Under federal law, group health plans and health insurance issuers offering group health insurance coverage generally may not restrict benefits for any hospital length of stay in connection with childbirth for the mother or newborn child to less than 48 hours following a vaginal delivery, or less than 96 hours following a delivery by cesarean section. However, the plan or issuer may pay for a shorter stay if the attending provider ( e.g. Also, under federal law, plans and issuers may not set the level of benefits or out-of-pocket costs so that any later portion of the 48-hour (or 96-hour) stay is treated in a manner less favorable to the mother or newborn than any earlier portion of the stay. In addition, a plan or issuer may not, under federal law, require that a physician or other health care provider obtain authorization for prescribing a length of stay of up to 48 hours (or 96 hours). However, to use certain providers or facilities, or to reduce your out-of-pocket costs, you may be required to obtain precertification. For information on precertification, contact your plan administrator. (3) Timing of disclosure. (4) Exceptions. (i) Self-insured plans that have already provided notice. (ii) Self-insured plans that have elected exemption from this section. (iii) Insured plans. (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 2724 (a) of the PHS Act. (4) Examples. Example 1. (i) Facts. (ii) Conclusion. Example 2. (i) Facts. (ii) Conclusion. (f) Applicability date. [73 FR 62424, Oct. 20, 2008, as amended at 75 FR 27138, May 13, 2010] § 146.136 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 A 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 B 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 § 146.137. (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. (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 Internal Revenue 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 −D > 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 by health insurance coverage offered in connection with a church plan. (C) Reporting by health insurance coverage offered in connection with a group health plans subject to Part 7 of Subtitle B of Title I of ERISA. (D) Reporting with respect to non-Federal governmental plans and health insurance issuers in the individual market. (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 45 CFR 146.136, revised as of October 1, 2023. (2) Special effective date for certain collectively-bargained plans. (j) Severability. [78 FR 68286, Nov. 13, 2013, as amended at 89 FR 77735, Sept. 23, 2024] § 146.137 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 § 146.136(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 § 146.136(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 § 146.136(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 § 146.136(c)(4)(iii)(A)( 3 ii (ii) Identification of the relevant data collected and evaluated, as required under § 146.136(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 § 146.136(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 § 146.136(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 § 146.136(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 § 146.136(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 § 146.136(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 § 146.136(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; and (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. (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 Health and Human Services 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 § 146.136(c)(4) or this section, including any provisions or practices identified as being in violation of § 146.136(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 § 146.136(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; and (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. (f) Rule of construction. (g) Applicability. (h) Severability. [89 FR 77747, Sept. 23, 2024] Subpart D—Preemption and Special Rules § 146.143 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 (2) State. State [69 FR 78797, Dec. 30, 2004; 70 FR 21147, Apr. 25, 2005; 79 FR 10315, Feb. 24, 2014] § 146.145 Special rules relating to group health plans. (a) Group health plan Definition. (2) Determination of number of plans. (b) 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 § 144.103 of this subchapter. (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. (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 (b)(5) are illustrated by the following example: Example. (i) Facts. (ii) Conclusion. Example, (c) Treatment of partnerships. (1) Treatment as a group health plan. (2) Employment relationship. employer employee (3) Participants of group health plans. participant (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. (d) Determining the average number of employees. [69 FR 78798, Dec. 30, 2004, as amended at 74 FR 51692, Oct. 7, 2009; 78 FR 65092, Oct. 30, 2013; 79 FR 59136, Oct. 1, 2014; 80 FR 14007, Mar. 18, 2015; 81 FR 75326, Oct. 31, 2016; 84 FR 29024, June 20, 2019; 85 FR 29259, May 14, 2020; 89 FR 23418, Apr. 3, 2024] Subpart E—Provisions Applicable to Only Health Insurance Issuers § 146.150 Guaranteed availability of coverage for employers in the small group market. (a) Issuance of coverage in the small group market. (1) Offer, to any small employer in the State, all products that are approved for sale in the small group market and that the issuer is actively marketing, and must accept any employer that applies for any of those products; and (2) Accept for enrollment under the coverage every eligible individual (as defined in paragraph (b) of this section) who applies for enrollment during the period in which the individual first becomes eligible to enroll under the terms of the group health plan, or during a special enrollment period, and may not impose any restriction on an eligible individual's being a participant or beneficiary, which is inconsistent with the nondiscrimination provisions of § 146.121. (b) Eligible individual defined. (1) To enroll in group health insurance coverage offered to a group health plan maintained by a small employer, in accordance with the terms of the group health plan; (2) For coverage under the rules of the health insurance issuer which are uniformly applicable in the State to small employers in the small group market; and (3) For coverage in accordance with all applicable State laws governing the issuer and the small group market. (c) Special rules for network plans. (i) Limit the employers that may apply for the coverage to those with eligible individuals who live, work, or reside in the service area for the network plan; and (ii) Within the service area of the plan, deny coverage to employers if the issuer has demonstrated to the applicable State authority (if required by the State authority) that— (A) It will not have the capacity to deliver services adequately to enrollees of any additional groups because of its obligations to existing group contract holders and enrollees; and (B) It is applying this paragraph (c)(1) uniformly to all employers without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to those employees and dependents. (2) An issuer that denies health insurance coverage to an employer in any service area, in accordance with paragraph (c)(1)(ii) of this section, may not offer coverage in the small group market within the service area to any employer for a period of 180 days after the date the coverage is denied. This paragraph (c)(2) does not limit the issuer's ability to renew coverage already in force or relieve the issuer of the responsibility to renew that coverage. (3) Coverage offered within a service area after the 180-day period specified in paragraph (c)(2) of this section is subject to the requirements of this section. (d) Application of financial capacity limits. (i) Does not have the financial reserves necessary to underwrite additional coverage; and (ii) Is applying this paragraph (d)(1) uniformly to all employers in the small group market in the State consistent with applicable State law and without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to those employees and dependents. (2) An issuer that denies group health insurance coverage to any small employer in a State under paragraph (d)(1) of this section may not offer coverage in connection with group health plans in the small group market in the State before the later of the following dates: (i) The 181st day after the date the issuer denies coverage. (ii) The date the issuer demonstrates to the applicable State authority, if required under applicable State law, that the issuer has sufficient financial reserves to underwrite additional coverage. (3) Paragraph (d)(2) of this section does not limit the issuer's ability to renew coverage already in force or relieve the issuer of the responsibility to renew that coverage. (4) Coverage offered after the 180-day period specified in paragraph (d)(2) of this section is subject to the requirements of this section. (5) An applicable State authority may provide for the application of this paragraph (d) on a service-area-specific basis. (e) Exception to requirement for failure to meet certain minimum participation or contribution rules. (2) For purposes of paragraph (e)(1) of this section— (i) The term “employer contribution rule” means a requirement relating to the minimum level or amount of employer contribution toward the premium for enrollment of participants and beneficiaries; and (ii) The term “group participation rule” means a requirement relating to the minimum number of participants or beneficiaries that must be enrolled in relation to a specified percentage or number of eligible individuals or employees of an employer. (f) Exception for coverage offered only to bona fide association members. (Approved by the Office of Management and Budget under control number 0938-0702) [62 FR 16958, Apr. 8, 1997; 62 FR 31694, June 10, 1997, as amended at 62 FR 35906, July 2, 1997; 67 FR 48811, July 26, 2002] § 146.152 Guaranteed renewability of coverage for employers in the group market. (a) General rule. (b) Exceptions. (1) Nonpayment of premiums. (2) Fraud. (3) Violation of participation or contribution rules. (4) Termination of product. (5) Enrollees' movement outside service area. (6) Association membership ceases. (c) Discontinuing a particular product. (1) The issuer provides notice in writing, in a form and manner specified by the Secretary, to each plan sponsor provided that particular product in that market (and to all participants and beneficiaries covered under such coverage) of the discontinuation at least 90 days before the date the coverage will be discontinued; (2) The issuer offers to each plan sponsor provided that particular product the option, on a guaranteed issue basis, to purchase all (or, in the case of the large group market, any) other health insurance coverage currently being offered by the issuer to a group health plan in that market; and (3) In exercising the option to discontinue that product and in offering the option of coverage under paragraph (c)(2) of this section, the issuer acts uniformly without regard to the claims experience of those sponsors or any health status-related factor relating to any participants or beneficiaries covered or new participants or beneficiaries who may become eligible for such coverage. (d) Discontinuing all coverage. (1) The issuer provides notice in writing to the applicable State authority and to each plan sponsor (and all participants and beneficiaries covered under the coverage) of the discontinuation at least 180 days prior to the date the coverage will be discontinued; and (2) All health insurance policies issued or delivered for issuance in the State in the market (or markets) are discontinued and not renewed. (3) For purposes of this paragraph (d), subject to applicable State law, an issuer will not be considered to have discontinued offering all health insurance coverage in a market in a State if— (i) The issuer (in this paragraph referred to as the initial issuer) or, if the issuer is a member of a controlled group, any other issuer that is a member of such controlled group, offers and makes available in the applicable market in the State at least one product that is considered in accordance with § 144.103 of this subchapter to be the same product as a product the initial issuer had been offering in such market in such State; or (ii) The issuer— (A) Offers and makes available at least one product (in paragraphs (d)(3)(ii)(A) through (C) of this section referred to as the new product) in the applicable market in the State, even if such product is not considered in accordance with § 144.103 of this subchapter to be the same product as a product the issuer had been offering in the applicable market in the State (in paragraphs (d)(3)(ii)(A) through (C) of this section referred to as the discontinued product); (B) Subjects such new product or products to the applicable process and requirements established under part 154 of this title as if such process and requirements applied with respect to that product or products, to the extent such process and requirements are otherwise applicable to coverage of the same type and in the same market; and (C) Reasonably identifies the discontinued product or products that correspond to the new product or products for purposes of the process and requirements applied pursuant to paragraph (d)(3)(ii)(B) of this section. (4) For purposes of this section, 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, or a narrower group as may be provided by applicable State law. (e) Prohibition on market reentry. (f) Exception for uniform modification of coverage. (i) Large group market; and (ii) Small group market if, for coverage available in this market (other than only through one or more bona fide associations), the modification is consistent with State law and is effective uniformly among group health plans with that product. (2) For purposes of paragraph (f)(1)(ii) of this section, modifications made uniformly and solely pursuant to applicable Federal or State requirements are considered a uniform modification of coverage if: (i) The modification is made within a reasonable time period after the imposition or modification of the Federal or State requirement; and (ii) The modification is directly related to the imposition or modification of the Federal or State requirement. (3) For purposes of paragraph (f)(1)(ii) of this section, other types of modifications made uniformly are considered a uniform modification of coverage if the health insurance coverage for the product in the small group market meets all of the following criteria: (i) The product is offered by the same health insurance issuer (within the meaning of section 2791(b)(2) of the PHS Act), or if the issuer is a member of a controlled group (as described in paragraph (d)(4) of this section), any other health insurance issuer that is a member of such controlled group; (ii) The product is offered as the same product network type (for example, health maintenance organization, preferred provider organization, exclusive provider organization, point of service, or indemnity); (iii) The product continues to cover at least a majority of the same service area; (iv) Within the product, each plan has the same cost-sharing structure as before the modification, except for any variation in cost sharing solely related to changes in cost and utilization of medical care, or to maintain the same metal tier level described in sections 1302(d) and (e) of the Affordable Care Act; and (v) The product provides the same covered benefits, except for any changes in benefits that cumulatively impact the rate for any plan within the product within an allowable variation of ±2 percentage points (not including changes pursuant to applicable Federal or State requirements). (4) A State may only broaden the standards in paragraphs (f)(3)(iii) and (iv) of this section. (g) Application to coverage offered only through associations. (h) Notice of renewal of coverage. (Approved by the Office of Management and Budget under control number 0938-0702) [62 FR 16958, Apr. 8, 1997; 62 FR 31670, June 10, 1997, as amended at 62 FR 35906, July 2, 1997; 79 FR 30335, May 27, 2014; 79 FR 53004, Sept. 5, 2014; 81 FR 94172, Dec. 22, 2016; 84 FR 17561, Apr. 25, 2019] § 146.160 Disclosure of information. (a) General rule. (1) Make a reasonable disclosure to the employer, as part of its solicitation and sales materials, of the availability of information described in paragraph (b) of this section; and (2) Upon request of the employer, provide that information to the employer. (b) Information described. (1) Provisions of coverage relating to the following: (i) The issuer's right to change premium rates and the factors that may affect changes in premium rates. (ii) Renewability of coverage. (iii) Any preexisting condition exclusion, including use of the alternative method of counting creditable coverage. (iv) Any affiliation periods applied by HMOs. (v) The geographic areas served by HMOs. (2) The benefits and premiums available under all health insurance coverage for which the employer is qualified, under applicable State law. See § 146.150(b) through (f) for allowable limitations on product availability. (c) Form of information. (1) An outline of coverage. For purposes of this section, outline of coverage means a description of benefits in summary form. (2) The rate or rating schedule that applies to the product (with and without the preexisting condition exclusion or affiliation period). (3) The minimum employer contribution and group participation rules that apply to any particular type of coverage. (4) In the case of a network plan, a map or listing of counties served. (5) Any other information required by the State. (d) Exception. (Approved by the Office of Management and Budget under control number 0938-0702) [62 FR 16958, Apr. 8, 1997, as amended at 62 FR 35906, July 2, 1997] Subpart F—Exclusion of Plans and Enforcement § 146.180 Treatment of non-Federal governmental plans. (a) Opt-out election for self-funded non-Federal governmental plans Requirements subject to exemption. (i) Limitations on preexisting condition exclusion periods in accordance with section 2701 of the PHS Act as codified before enactment of the Affordable Care Act. (ii) Special enrollment periods for individuals and dependents described under section 2704(f) of the PHS Act. (iii) Prohibitions against discriminating against individual participants and beneficiaries based on health status under section 2705 of the PHS Act, except that the sponsor of a self-funded non-Federal governmental plan cannot elect to exempt its plan from requirements under section 2705(a)(6) and 2705(c) through (f) that prohibit discrimination with respect to genetic information. (iv) Standards relating to benefits for mothers and newborns under section 2725 of the PHS Act. (v) Parity in mental health and substance use disorder benefits under section 2726 of the PHS Act. (vi) Required coverage for reconstructive surgery following mastectomies under section 2727 of the PHS Act. (vii) Coverage of dependent students on a medically necessary leave of absence under section 2728 of the PHS Act. (2) General rule. (3) Sunset of election option related to parity in mental health and substance use disorder benefits. (4) Special rule for certain collectively bargained plans. (5) Examples Example 1. (ii) Example 2. (6) Limitations. (A) Example 1. (B) [Reserved] (ii) If a group health plan is co-sponsored by two or more employers, then only plan enrollees of the non-Federal governmental employer(s) with a valid election under this section are affected by the election. (7) Stop-loss or excess risk coverage. (i) Subject to paragraph (a)(7)(ii) of this section, the purchase of stop-loss or excess risk coverage by a self-funded non-Federal governmental plan does not prevent an election under this section. (ii) Regardless of whether coverage offered by an issuer is designated as “stop-loss” coverage or “excess risk” coverage, if it is regulated as group health insurance under an applicable State law, then for purposes of this section, a non-Federal governmental plan that purchases the coverage is considered to be fully insured. In that event, a plan may not be exempted under this section from the requirements described in paragraph (a)(1) of this section. (8) Construction. (b) Form and manner of election Election requirements. (i) Be made in an electronic format in a form and manner as described by the Secretary in guidance. (ii) Be made in conformance with all of the plan sponsor's rules, including any public hearing requirements. (iii) Specify the beginning and ending dates of the period to which the election is to apply. This period can be either of the following periods: (A) A single specified plan year, as defined in § 144.103 of this subchapter. (B) The “term of the agreement,” as specified in paragraph (b)(2) of this section, in the case of a plan governed by collective bargaining. (iv) Specify the name of the plan and the name and address of the plan administrator, and include the name and telephone number of a person CMS may contact regarding the election. (v) State that the plan does not include health insurance coverage, or identify which portion of the plan is not funded through health insurance coverage. (vi) Specify each requirement described in paragraph (a)(1) of this section from which the plan sponsor elects to exempt the plan. (vii) Certify that the person signing the election document, including (if applicable) a third party plan administrator, is legally authorized to do so by the plan sponsor. (viii) Include, as an attachment, a copy of the notice described in paragraph (f) of this section. (ix) In the case of a plan sponsor submitting one opt-out election for all group health plans subject to the same collective bargaining agreement, include a list of plans subject to the agreement. (x) In the case of a plan sponsor submitting opt-out elections for more than one group health plan that is not subject to a collective bargaining agreement, submit a separate election document for each such plan. (2) “ Term of the agreement” defined. (i) In the case of a group health plan for which the last plan year governed by a prior collective bargaining agreement expires during the bargaining process for a new agreement, the term of the prior agreement includes all plan years governed by the agreement plus the period of time that precedes the latest of the following dates, as applicable, with respect to the new agreement: (A) The date of an agreement between the governmental employer and union officials. (B) The date of ratification of an agreement between the governmental employer and the union. (C) The date impasse resolution, arbitration or other closure of the collective bargaining process is finalized when agreement is not reached. (ii) In the case of a group health plan governed by a collective bargaining agreement for which closure is not reached before the last plan year under the immediately preceding agreement expires, the term of the new agreement includes all plan years governed by the agreement excluding the period that precedes the latest applicable date specified in paragraph (b)(2)(i) of this section. (3) Construction Dispute resolution. (ii) Future elections not preempted. (c) Filing a timely election Plan not governed by collective bargaining. (2) Plan governed by a collective bargaining agreement. (3) Special rule for timely filing. (4) Filing extension based on good cause. (5) Failure to file a timely election. (d) Additional information required Written notification. (i) The last day of the plan year. (ii) The 45th day after the date of CMS's written notification requesting additional information. (2) Timely response. (3) Failure to respond timely. (e) Notice to enrollees Mandatory notification. (ii) The notice must be in writing and, except as provided in paragraph (e)(2) of this section with regard to initial notices, must be provided to each enrollee at the time of enrollment under the plan, and on an annual basis no later than the last day of each plan year (as defined in § 144.103 of this subchapter) for which there is an election. (iii) A plan may meet the notification requirements of paragraph (e) of this section by prominently printing the notice in a summary plan description, or equivalent description, that it provides to each enrollee at the time of enrollment, and annually. Also, when a plan provides a notice to an enrollee at the time of enrollment, that notice may serve as the initial annual notice for that enrollee. (2) Initial notices. (ii) In the case of a collectively bargained plan, with regard to the initial plan year to which an election under this section applies, the plan must provide the initial annual notice of the election to all enrollees before the first day of the plan year, or within 30 days after the latest applicable date specified in paragraph (b)(2)(i) of this section if the 30th day falls on or after the first day of the plan year. Also, the plan must provide a notice at the time of enrollment to individuals who— (A) Enroll on or after the first day of the plan year, when closure of the collective bargaining process is reached before the plan year begins; or (B) Enroll on or after the latest applicable date specified in paragraph (b)(2)(i) of this section if that date falls on or after the first day of the plan year. (3) Notice content. (i) The specific requirements described in paragraph (a)(1) of this section from which the plan sponsor is electing to exempt the plan, and a statement that, in general, Federal law imposes these requirements upon group health plans. (ii) A statement that Federal law gives the plan sponsor of a self-funded non-Federal governmental plan the right to exempt the plan in whole, or in part, from the listed requirements, and that the plan sponsor has elected to do so. (iii) A statement identifying which parts of the plan are subject to the election. (iv) A statement identifying which of the listed requirements, if any, apply under the terms of the plan, or as required by State law, without regard to an exemption under this section. (f) Subsequent elections Election renewal. (2) Form and manner of renewal. (3) Election renewal includes provisions from which plan not previously exempted. (4) Special rules regarding renewal of an election under a collective bargaining agreement. (ii) If a single plan applies to more than one bargaining unit, and the plan is governed by collective bargaining agreements of varying lengths, paragraph (c)(2) of this section, with respect to an election renewal, applies to the plan as governed by the agreement that results in the earliest filing date. (iii) In the case of a plan that is subject to multiple collective bargaining agreements of varying lengths and that has an election with respect to the requirements described in paragraph (a)(1)(v) of this section in effect as of December 29, 2022, that expires on or after June 27, 2023, the plan may extend such election until the date on which the term of the last such agreement expires. (g) Requirements not subject to exemption Genetic information. (2) Enforcement. (h) Effect of failure to comply with certification and notification requirements Substantial failure General rule. (ii) Determination of substantial failure. (iii) Exceptions Multiple employers. (B) Limited failure to provide notice. (2) Examples Example 1. (ii) Example 2. (i) Election invalidated. (1) CMS notifies the plan sponsor (and the plan administrator if other than the plan sponsor and the administrator's address is known to CMS) in writing that CMS has made a preliminary determination that an election is invalid, and States the basis for that determination. (2) CMS's notice informs the plan sponsor that it has 45 days after the date of CMS's notice to explain in writing why it believes its election is valid. The plan sponsor should provide applicable statutory and regulatory citations to support its position. (3) CMS verifies that the plan sponsor's response is timely filed as provided under paragraph (c)(3) of this section. CMS will not consider a response that is not timely filed. (4) If CMS's preliminary determination that an election is invalid remains unchanged after CMS considers the plan sponsor's timely response (or in the event that the plan sponsor fails to respond timely), CMS provides written notice to the plan sponsor (and the plan administrator if other than the plan sponsor and the administrator's address is known to CMS) of CMS's final determination that the election is invalid. Also, CMS informs the plan sponsor that, within 45 days of the date of the notice of final determination, the plan, subject to paragraph (i)(1)(iii) of this section, must comply with all requirements of this part for the specified period for which CMS has determined the election to be invalid. (j) Enforcement. (k) Construction. (1) Establishing, and enforcing compliance with, the requirements of State law (as defined in § 146.143(d)(1)), including requirements that parallel provisions of title XXVII of the PHS Act, that apply to non-Federal governmental plans or sponsors. (2) Prohibiting a sponsor of a non-Federal governmental plan within the State from making an election under this section. [79 FR 30336, May 27, 2014, as amended at 89 FR 77751, Sept. 23, 2024]