We proposed to define "health plan" essentially as section 1171(5) of the Act defines it. Section 1171 of the Act refers to several definitions in section 2791 of the Public Health Service Act, 42 U.S.C. 300gg-91, as added by Public Law 104-191.
As defined in section 1171(5), a "health plan" is an individual plan or group health plan that provides, or pays the cost of, medical care. We proposed that this definition include, but not be limited to the 15 types of plans (e.g., group health plan, health insurance issuer, health maintenance organization) listed in the statute, as well as any combination of them. Such term would have included, when applied to public benefit programs, the component of the government agency that administers the program. Church plans and government plans would have been included to the extent that they fall into one or more of the listed categories.
In the proposed rule, "health plan" included the following, singly or in combination:
(1) A group health plan, defined as an employee welfare benefit plan (as currently defined in section 3(1) of the Employee Retirement Income and Security Act of 1974, 29 U.S.C. 1002(1)), including insured and self-insured plans, to the extent that the plan provides medical care (as defined in section 2791(a)(2) of the Public Health Service Act, 42 U.S.C. 300gg-91(a)(2)), including items and services paid for as medical care, to employees or their dependents directly or through insurance or otherwise, that:
(i) Has 50 or more participants; or
(ii) Is administered by an entity other than the employer that established and maintains the plan.
(2) A health insurance issuer, defined as an insurance company, insurance service, or insurance organization that is licensed to engage in the business of insurance in a state and is subject to state or other law that regulates insurance.
(3) A health maintenance organization, defined as a federally qualified health maintenance organization, an organization recognized as a health maintenance organization under state law, or a similar organization regulated for solvency under state law in the same manner and to the same extent as such a health maintenance organization.
(4) Part A or Part B of the Medicare program under title XVIII of the Act.
(5) The Medicaid program under title XIX of the Act.
(6) A Medicare supplemental policy (as defined in section 1882(g)(1) of the Act, 42 U.S.C. 1395ss).
(7) A long-term care policy, including a nursing home fixed-indemnity policy.
(8) An employee welfare benefit plan or any other arrangement that is established or maintained for the purpose of offering or providing health benefits to the employees of two or more employers.
(9) The health care program for active military personnel under title 10 of the United States Code.
(10) The veterans health care program under 38 U.S.C. chapter 17.
(11) The Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), as defined in 10 U.S.C. 1072(4).
(12) The Indian Health Service program under the Indian Health Care Improvement Act (25 U.S.C. 1601, et seq.).
(13) The Federal Employees Health Benefits Program under 5 U.S.C. chapter 89.
(14) An approved state child health plan for child health assistance that meets the requirements of section 2103 of the Act.
(15) A Medicare Plus Choice organization as defined in 42 CFR 422.2, with a contract under 42 CFR part 422, subpart K.
In addition to the 15 specific categories, we proposed that the list include any other individual plan or group health plan, or combination thereof, that provides or pays for the cost of medical care. The Secretary would determine which plans that meet these criteria would to be considered health plans for the purposes of this rule.
Consistent with the other titles of HIPAA, our proposed definition did not include certain types of insurance entities, such as workers' compensation and automobile insurance carriers, other property and casualty insurers, and certain forms of limited benefits coverage, even when such arrangements provide coverage for health care services.
In the final rule, we add two provisions to clarify the types of policies or programs that we do not consider to be a health plan. First, the rule excepts any policy, plan or program to the extent that it provides, or pays for the cost of, excepted benefits, as defined in section 2791(c)(1) of the PHS Act, 42 U.S.C. 300gg-91(c)(1). We note that, while coverage for on-site medical clinics is excluded from definition of "health plans," such clinics may meet the definition of "health care provider" and persons who work in the clinic may also meet the definition of health care provider." Second, many commenters were confused by the statutory inclusion as a health plan of any "other individual or group plan that provides or pays the cost of medical care;" they questioned how the provision applied to many government programs. We therefore clarify that while many government programs (other than the programs specified in the statute) provide or pay the cost of medical care, we do not consider them to be individual or group plans and therefore, do not consider them to be health plans. Government funded programs that do not have as their principal purpose the provision of, or payment for, the cost of health care but which do incidentally provide such services are not health plans (for example, programs such as the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) and the Food Stamp Program, which provide or pay for nutritional services, are not considered to be health plans). Government funded programs that have as their principal purpose the provision of health care, either directly or by grant, are also not considered to be health plans. Examples include the Ryan White Comprehensive AIDS Resources Emergency Act, government funded health centers and immunization programs. We note that some of these may meet the rule's definition of health care provider.
We note that in certain instances eligibility for or enrollment in a health plan that is a government program providing public benefits, such as Medicaid or SCHIP, is determined by an agency other than the agency that administers the program, or individually identifiable health information used to determine enrollment or eligibility in such a health plan is collected by an agency other than the agency that administers the health plan. In these cases, we do not consider an agency that is not otherwise a covered entity, such as a local welfare agency, to be a covered entity because it determines eligibility or enrollment or collects enrollment information as authorized by law. We also do not consider the agency to be a business associate when conducting these functions, as we describe further in the business associate discussion above.
The definition in the final rule also reflects the following changes promulgated in the Transactions Rule:
(1) Exclusion of nursing home fixed-indemnity policies;
(2) Addition of the word "issuer" to Medicare supplemental policy, and long-term care policy;
(3) Addition or revision of the relevant statutory cites where appropriate;
(4) Deletion of the term "or assisted" when referring to government programs;
(5) Replacement of the word "organization" with "program" when referring to Medicare + Choice;
(6) Deletion of the term "health" when referring to a group plan in subparagraph (xvi);
(7) Extraction of the definitions of "group health plan," "health insurance issuer," and "health maintenance organization" into Part 160 as distinct definitions;
(8) In the definition of "group health plan," deletion of the term "currently" from the reference to the statutory cite of ERISA, addition of the relevant statutory cite for the term "participant," and addition of the term "reimbursement;"
(9) In the definition of "health insurance issuer," addition of the relevant statutory cite, deletion of the term "or other law" after "state law," addition of health maintenance organizations for consistency with the statute, and clarification that the term does not include a group health plan; and
(10) In the definition of "health maintenance organization," addition of the relevant statutory cite.
Finally, we add to this definition a high risk pool that is a mechanism established under state law to provide health insurance coverage or comparable coverage to eligible individuals. High risk pools are designed mainly to provide health insurance coverage for individuals who, due to health status or pre-existing conditions, cannot obtain insurance through the individual market or who can do so only at very high premiums. Some states use their high risk pool as an alternative mechanism under section 2744 of HIPAA. We do not reference the definition of "qualified high risk pool" in HIPAA because that definition includes the requirements for a state to use its risk pool as its alternative mechanism under HIPAA. Some states may have high risk pools, but do not use them as their alternative mechanism and therefore may not meet the definition in HIPAA. We want to make clear that state high risk pools are covered entities under this rule whether or not they meet the definition of a qualified high risk pool under section 2744. High risk pools, as described in this rule, do not include any program established under state law solely to provide excepted benefits. For example, a state program established to provide workers' compensation coverage is not considered to be a high risk pool under the rule.