Comment: One commenter recommended that we delete the reference to $5 million in the definition and instead define a "small health plan" as a health plan with fewer than 50 participants. It was stated that using a dollar limitation to define a "small health plan" is not meaningful for self-insured plans and some other types of health plan coverage arrangements. A commenter pointed out that the general definition of a health plan refers to "50 or more participants," and that using a dollar factor to define a "small health plan" would be inconsistent with this definition.
Response: We disagree. The Small Business Administration (SBA) promulgates size standards that indicate 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, we retain the proposal's definition in the final rule to be consistent with SBA requirements.
We understand there may be some confusion as to the meaning of "annual receipts" when applied to a health plan. For our purposes, therefore, we consider "pure premiums" to be equivalent to "annual receipts."