Health Insurance Reform: Standards for Electronic Transactions. 5. Small Health Plan


Comment: One commenter requested we clarify how the figure for the number of participants for a small health plan was determined. For instance, is an individual insured in a health plan for one month considered a participant for that year? Would twelve different people insured for one month each in a single year be considered a participant? Another commenter questioned why small health plans are being given an extra 12 months to implement the standards.

Response: In the proposed rule, we stated that a small health plan means a group health plan or individual health plan with fewer than 50 participants. It has come to our attention that the Small Business Administration (SBA) promulgates size standards that indicates the maximum number of employees or annual receipts allowed for a concern (13 CFR 121.105) and its affiliates to be considered “small.” The size standards themselves are expressed either in number of employees or annual receipts (13 CFR 121.201). The size standards for compliance with programs of other agencies are those for SBA programs which are most comparable to the programs of such other agencies, unless otherwise agreed by the agency and the SBA (13 CFR 121.902). With respect to the insurance industry, the SBA has specified that annual receipts of $5 million is the maximum allowed for a concern and its affiliates to be considered small (13 CFR 121.201). Consequently, the definition of small health plan has been amended to be consistent with SBA requirements. As such, we need not address the definition of participants for purposes of small health plans.

Small health plans must implement the standards no later than 36 months after adoption under section 1175 of the Act.