Federal Requirements on Private Health Insurance Plans
Congressional research reportMar 12, 2025
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Federal Requirements on Private Health
Insurance Plans
Updated March 12, 2025
Congressional Research Service
https://crsreports.congress.gov
R45146
SUMMARY
Federal Requirements on Private Health
Insurance Plans
A majority of Americans have private health insurance. Broadly, private health insurance
includes group plans (largely made up of employer-sponsored insurance) and nongroup plans
(i.e., plans a consumer purchases directly from an insurer). Group plans may be fully insured or
self-insured, and fully insured plans may be purchased in the large-group or small-group
markets. (These terms are discussed in the report.)
Private health insurance plans must comply with requirements at both the state and federal levels,
where applicable. Federal requirements for health plans are codified primarily in three statutes:
Title XXVII of the Public Health Service Act (PHSA), Part 7 of the Employee Retirement
Income Security Act of 1974 (ERISA), and Chapter 100 of the Internal Revenue Code (IRC).
Although the health insurance provisions in these statutes are substantively similar, the
differences reflect, in part, the applicability of each statute to different types of private plans. The
PHSA’s provisions apply broadly across private plans, whereas ERISA and the IRC focus
primarily on group plans. The Departments of Health and Human Services (HHS), Labor, and the
Treasury—given their overlapping jurisdiction over private coverage—coordinate enforcement
efforts with respect to these private health insurance requirements.
R45146
March 12, 2025
Ryan J. Rosso,
Coordinator
Analyst in Health Care
Financing
Vanessa C. Forsberg
Analyst in Health Care
Financing
Bernadette Fernandez
Specialist in Health Care
Financing
Federal requirements on private health insurance may apply to large-group, small-group, self-insured, and/or nongroup plans.
Federal requirements do not apply uniformly to all types of health plans.
The selected requirements discussed in this report are grouped into the following categories:
•
•
•
•
Obtaining coverage, which refers to consumers’ eligibility for coverage
•
Enrollee cost sharing and plan payment for benefits, which refers to requirements relating to the
amounts the enrollees pay (i.e., deductibles, coinsurance, co-payments) and the plans pay as enrollees use
covered benefits
•
Health care provider interactions, which refers to plan and consumer interactions with providers
(including specified out-of-network providers)
•
Enrollee information and appeals, which refers to plan disclosure of certain information to enrollees (and
applicants) and enrollees’ rights regarding appeals of coverage denials
•
Federal and public reporting requirements, which refers to plan reporting of specified information to the
federal government and/or the public disclosure of certain information
Keeping coverage, which refers to consumers’ ability to maintain their coverage once enrolled
Health insurance premiums, which refers to the amounts consumers pay for health insurance
Covered benefits, which refers to the benefits that plans cover (including services such as physician visits
and items such as prescription drugs)
Congressional Research Service
Federal Requirements on Private Health Insurance Plans
Contents
Introduction ..................................................................................................................................... 1
Background ..................................................................................................................................... 1
Types of Private Health Insurance Plans ................................................................................... 1
Certain Plan Variations ....................................................................................................... 2
Regulation of Private Health Plans ........................................................................................... 3
Federal Requirements ...................................................................................................................... 4
Obtaining Coverage .................................................................................................................. 8
Guaranteed Issue ................................................................................................................. 8
Employer Shared Responsibility Provisions ....................................................................... 8
Prohibition on Using Health Status for Eligibility Determinations .................................... 9
Nondiscrimination Based on Genetic Information ............................................................. 9
Extension of Dependent Coverage...................................................................................... 9
Prohibition of Discrimination Based on Salary .................................................................. 9
Waiting Period Limitation ................................................................................................. 10
Keeping Coverage ................................................................................................................... 10
Guaranteed Renewability .................................................................................................. 10
Prohibition on Rescissions ................................................................................................ 10
COBRA Continuation Coverage ....................................................................................... 10
Coverage for Students Who Take a Medically Necessary Leave of Absence ....................11
Health Insurance Premiums .....................................................................................................11
Prohibition on Using Health Status as a Rating Factor ......................................................11
Rating Restrictions ............................................................................................................ 12
Rate Review ...................................................................................................................... 12
Single Risk Pool................................................................................................................ 13
Medical Loss Ratio ........................................................................................................... 13
Covered Benefits ..................................................................................................................... 14
Coverage of Essential Health Benefits.............................................................................. 14
Coverage of Preventive Health Services Without Cost Sharing ....................................... 15
Coverage of COVID-19 Vaccinations and Other Qualifying Preventive Services ........... 16
Coverage for Individuals Participating in Approved Clinical Trials ................................. 16
Coverage of Minimum Hospital Stay After Childbirth ..................................................... 17
Mental Health Parity ......................................................................................................... 17
Coverage of Reconstruction After Mastectomy ................................................................ 18
Coverage of Pregnancy-Related Conditions ..................................................................... 18
Prohibition on Coverage Exclusions Based on Preexisting Health Conditions ................ 18
Enrollee Cost Sharing and Plan Payment for Benefits ............................................................ 19
Maximum Annual Limitation on Cost Sharing ................................................................. 19
Minimum Actuarial Value Requirements .......................................................................... 20
Prohibition on Lifetime and Annual Coverage Limits ...................................................... 20
Health Care Provider Interactions ........................................................................................... 21
Preventing Surprise Medical and Air Ambulance Bills .................................................... 21
Continuity of Care ............................................................................................................ 22
Services Provided Based on Incorrect Provider Directory Information ........................... 22
Choice of Health Care Professionals ................................................................................ 23
Nondiscrimination Regarding Health Care Providers ...................................................... 23
Prohibition on Gag Clauses on Price and Quality Information......................................... 23
Enrollee Information and Appeals........................................................................................... 23
Congressional Research Service
Federal Requirements on Private Health Insurance Plans
Summary of Benefits and Coverage and Uniform Glossary ............................................. 24
Advanced Explanation of Benefits ................................................................................... 24
Plan Identification Card Information ................................................................................ 25
Price Comparison Tool...................................................................................................... 25
Provider Directory Requirements ..................................................................................... 25
Disclosure of Patient Protections Against Balance Billing ............................................... 25
Information on Prescription Drugs ................................................................................... 26
Disclosure to Enrollees of Individual Market Coverage ................................................... 26
Appeals Process and External Review .............................................................................. 26
Federal and Public Reporting Requirements ........................................................................... 27
Reporting Requirements Regarding Quality of Care ........................................................ 27
Reporting Requirements Regarding Air Ambulances ....................................................... 28
Reporting Requirements Regarding Pharmacy Benefits and Drug Costs ......................... 28
Transparency in Coverage ................................................................................................ 29
Tables
Table 1. Applicability of Selected Federal Requirements to
Private Health Insurance Plans ..................................................................................................... 5
Contacts
Author Information........................................................................................................................ 29
Congressional Research Service
Federal Requirements on Private Health Insurance Plans
Introduction
A majority of Americans have private health insurance. Private health insurance plans must
comply with requirements at both the state and federal levels, where applicable.
This report organizes and examines selected federal statutory requirements applicable to private
health insurance plans. The first part of this report provides background information about the
types of private health insurance plans and the regulation of such plans. The second part
summarizes selected federal requirements and indicates each requirement’s applicability to one or
more of the following types of private health plans: large group, small group, self-insured, and
nongroup. Table 1 summarizes the applicability of federal statutory requirements across those
plan types. The selected requirements are grouped under the following categories: obtaining
coverage, keeping coverage, health insurance premiums, covered benefits, enrollee cost sharing
and plan payment for benefits, health care provider interactions, enrollee information and appeals,
and federal and public reporting requirements.
Many of the federal requirements described in this report were established under the Patient
Protection and Affordable Care Act (ACA; P.L. 111-148, as amended). However, some were
established under other federal laws. For example, a number of market reforms were first enacted
via the Health Insurance Portability and Accountability Act (HIPAA; P.L. 104-191).1 Certain
private health insurance laws have addressed specific topics, such as mental health parity,2 rather
than a range of market reforms. Recently, the No Surprises Act, part of the Consolidated
Appropriations Act, 2021 (P.L. 116-260), included numerous new private health insurance
requirements, primarily related to surprise billing.3
A companion to this report is CRS Report R47507, Private Health Insurance: A Primer, which
provides further explanations of key concepts related to the provision of health insurance, as well
as enrollment and premium data.
Background
Types of Private Health Insurance Plans
Broadly, private health insurance includes group plans (largely made up of employer-sponsored
insurance) and nongroup plans (i.e., plans a consumer purchases directly from an insurer).
Federal requirements on private health insurance may apply to some or all of several types of
group plans (explained below) and/or to nongroup plans.
1 Some Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) provisions were amendments or
expansions of Health Insurance Portability and Accountability Act (HIPAA; P.L. 104-191) private health insurance
provisions.
2 See, for example, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
(P.L. 110-343).
3 Requirements summarized in this report are not grouped according to the laws establishing them. In this report, the
term surprise billing refers to specified situations where an individual is unknowingly, and potentially unavoidably,
treated by a provider outside of the consumer’s health insurance plan network and, as a result, unexpectedly receives a
larger bill than the individual would have received if the provider had been in the plan network. A consumer may be
surprised to receive larger-than-expected medical bills for other reasons; for example, the surprise component may arise
because a consumer misunderstands the terms of his or her health insurance policy and receives a bill for an unexpected
amount. Such other reasons generally are outside the scope of this report and are not included in this report’s usage of
the term surprise billing.
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Federal Requirements on Private Health Insurance Plans
Group plans refer to health benefits provided by employers and other entities (e.g., unions,
associations) that sponsor such benefits. These plan sponsors can purchase coverage in the group
market from state-licensed insurers and offer it to their employees (and their employees’
dependents). Health plans obtained this way are referred to as fully insured. The group market is
divided into segments based on size: the small-group market and the large-group market. For
purposes of federal requirements that apply to the group market, states may elect to define small
groups or employers as those with 50 or fewer individuals (e.g., employees) or groups with 100
or fewer individuals. The definition for large group builds on the small-group definition; a large
group has at least 51 individuals or at least 101 individuals, depending on which small-group
definition a given state uses.
Instead of purchasing group plans from insurers, plan sponsors may set aside funds and pay for
health benefits directly; that is, they may self-insure. This alternative approach to providing health
benefits means that such sponsors bear the risk of covering the medical expenses generated by the
individuals covered under the self-insured plan. Groups of any size may self-insure, and federal
requirements on self-insured plans generally do not depend on group size.
The nongroup market, also called the individual market, is where consumers may purchase a
health plan for themselves and their dependents directly from an insurer. For the most part,
nongroup plans are fully insured, and this report discusses them as such.4
Certain Plan Variations
Certain types of group and nongroup plans, and certain other types of private health coverage
arrangements, are regulated differently than the types generally described above. Selected
examples of plan variations are briefly referenced here but otherwise are not included in this
report.
Governmental Employee Plans: Although federal, state, and other governmental employers may
offer group plans as private sector employers do, certain federal requirements on group plans may
apply to governmental plans differently or may not apply.5
Plans Offered by Private Insurers to Enrollees of Public Programs: Some beneficiaries in
public health coverage programs obtain their coverage through commercial insurers contracted by
those programs (e.g., Medicare Advantage or Medicaid managed care plans). Such plans are
subject to those programs’ requirements rather than to those described in this report.
Plans Offered on the Health Insurance Exchanges: The nongroup and small-group markets
include plans sold on and off the health insurance exchanges. The exchanges are government-run
marketplaces that facilitate the purchase of private health insurance plans called qualified health
plans (QHPs). The QHPs must meet all requirements applicable to the nongroup or small-group
market segments, plus additional requirements specific to the exchanges. This report does not
include QHP-specific requirements.6
Exempted Health Coverage Arrangements: Certain types of plans meet a federal definition of
health insurance (i.e., they meet the federal definition of health insurance coverage or group
health plan) but are exempt from compliance with some or all federal health insurance
4 An exception is discussed in the student health insurance coverage section in CRS Report R46003, Applicability of
Federal Requirements to Selected Health Coverage Arrangements.
5 For more information, see CRS Report R43922, Federal Employees Health Benefits (FEHB) Program: An Overview,
and the self-insured, nonfederal governmental plans section in CRS Report R46003, Applicability of Federal
Requirements to Selected Health Coverage Arrangements.
6 For more information, see CRS Report R44065, Overview of Health Insurance Exchanges.
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Federal Requirements on Private Health Insurance Plans
requirements that otherwise would apply. Such plans include, for example, grandfathered plans,
excepted benefit plans, and short-term, limited-duration insurance plans.7
Regulation of Private Health Plans
States are the primary regulators of insurers, as codified by the 1945 McCarran-Ferguson Act
(P.L. 79-15).8 Each state requires insurers to be licensed in order to sell health plans in the state,
and each state has a unique set of requirements that apply to insurers and the plans they offer.
Each state’s health insurance requirements are broad in scope and address a variety of issues, and
requirements vary greatly from state to state. State requirements have changed over time in
response to shifting priorities about regulation, the evolving health care landscape, and the
implementation of federal policies.
Health plans offered by state-licensed insurers are subject to state health insurance requirements.
Because self-insured plans are financed directly by the plan sponsor, such plans generally are not
subject to such requirements.
In addition to states, the federal government regulates state-licensed insurers and the plans they
offer. Federal health insurance requirements typically follow the model of federalism: federal law
establishes standards, and states are primarily responsible for monitoring compliance with and
enforcement of those standards. Generally, the federal standards establish a minimum level of
requirements (federal floor) and states may impose additional requirements on insurers and the
plans they offer, provided the state requirements neither conflict with federal law nor prevent the
implementation of federal requirements. For example, the federal “Rating Restrictions”
requirement provides that certain types of health plans may vary premiums by only four factors—
type of coverage (i.e., self-only or family), geographic rating area, tobacco use, and age. Some
states have expanded this requirement by prohibiting issuers from varying premiums by tobacco
use and age, though no states are allowed to permit these types of plans to vary premiums by any
additional factors.
The federal government also regulates self-insured plans, as part of federal oversight of
employment-based benefits. Federal requirements applicable to self-insured plans often are
established in tandem with requirements on fully insured plans and state-licensed issuers.
Nonetheless, fewer federal requirements overall apply to self-insured plans compared with fully
insured plans.
Federal requirements for health plans are codified primarily in three statutes: Title XXVII of the
Public Health Service Act (PHSA), Part 7 of the Employee Retirement Income Security Act of
1974 (ERISA), and Chapter 100 of the Internal Revenue Code (IRC). Although the health
insurance provisions in these statutes are substantively similar, the differences reflect, in part, the
applicability of each statute to different types of private plans. The PHSA’s provisions apply
broadly across private plans, whereas ERISA and the IRC focus primarily on group plans. The
Departments of Health and Human Services (HHS), Labor, and the Treasury—given their
overlapping jurisdiction over private coverage—coordinate enforcement efforts with respect to
these private health insurance requirements.9
7 For more information on these and other types of plans, see CRS Report R46003, Applicability of Federal
Requirements to Selected Health Coverage Arrangements.
8 15 U.S.C. §§1011 et seq. For simplicity, this report generally uses the term insurers to include insurance carriers or
issuers and other state-licensed firms.
9 With respect to health insurers, the Public Health Service Act (PHSA) allows states to be the primary enforcers of the
(continued...)
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Federal Requirements on Private Health Insurance Plans
Federal Requirements
This report focuses on descriptions of statutory private health insurance requirements on major
medical plans and incorporates references to certain regulatory and sub-regulatory activity where
necessary to understand key components of the requirements.10 In general, this report does not
discuss implementation of federal requirements. However, given that Congress recently enacted
surprise billing and transparency requirements and the Secretaries of HHS, Labor, and the
Treasury were in the process of implementing many of those requirements at the time of this
report’s publication, the implementation of recently enacted requirements is discussed, where
appropriate.
For the most part, this report focuses on federal requirements applicable to insurers only, insurers
and self-insured plan sponsors (e.g., employers) in their offering of coverage, and/or on the plans
themselves.11 Selected requirements specific to employers are included to the extent that the
requirements are particularly relevant to the topics discussed in this report (e.g., “COBRA
Continuation Coverage” in the “Keeping Coverage” section).12
The federal requirements described in this report are grouped into the following categories:
obtaining coverage, keeping coverage, health insurance premiums, covered benefits, cost-sharing
limits, requirements related to health care providers, enrollee information and appeals, and federal
and public reporting requirements. Each category of requirements begins with brief, contextual
information about that set of requirements. Some requirements address more than one of these
categories. For example, the requirement “Nondiscrimination Based on Genetic Information”
relates to obtaining coverage, health insurance premiums, and coverage of preexisting
conditions). For the sake of simplicity, these types of crosscutting requirements generally are
discussed only in the most relevant category (in this case, “Obtaining Coverage”).
Federal requirements do not apply uniformly to all types of health plans. For example, plans
offered in the nongroup and small-group markets must comply with the federal requirement to
cover the essential health benefits (EHB; see “Coverage of Essential Health Benefits”); however,
plans offered in the large-group market and self-insured plans do not have to comply with this
requirement. Table 1 lists the specific types of plans to which the federal requirements described
in this report apply: large group, small group, self-insured, and nongroup. Summary descriptions
of the federal requirements follow the table.
federal private health insurance requirements, but the Secretary of the Department of Health and Human Services
(HHS) assumes this responsibility if the Secretary has determined that a state has failed to “substantially enforce” the
federal PHSA provisions. For more information on enforcement of private health insurance requirements, see CRS
Report R46637, Federal Private Health Insurance Market Reforms: Legal Framework and Enforcement.
10 Most people with private health insurance have a major medical plan. Major medical plans provide comprehensive
health benefits compared with limited benefit plans, although the specific covered benefits may vary across major
medical plans. One example of a limited benefit plan is an excepted benefit plan, such as a dental-only or vision-only
plan. For more information on these and other types of plans, see CRS Report R46003, Applicability of Federal
Requirements to Selected Health Coverage Arrangements.
11 In this report, references to plans include applicable group health plans and insurers.
12 This report does not include the full range of federal requirements generally applicable to employee benefit plans,
such as fiduciary requirements. Employee benefit plans include group health plans but also may include other types of
benefits (e.g., retirement plans).
Congressional Research Service
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Federal Requirements on Private Health Insurance Plans
Table 1. Applicability of Selected Federal Requirements to
Private Health Insurance Plans
Groupb
Fully Insuredd
U.S. Codea
Provision
Large
Groupf
Small
Groupf
SelfInsurede
Nongroupc
Obtaining Coverage
42 U.S.C. §300gg-1
Guaranteed Issue
√
√
N.A.
√
26 U.S.C. §4980H
Employer Shared Responsibility
Provisions
√
N.A.g
√g
N.A.
42 U.S.C. §300gg-4(a)
Prohibition on Using Health Status for
Eligibility Determinations
√
√
√
√
42 U.S.C. §300gg-3, 4
Nondiscrimination Based on Genetic
Information
√
√
√
√
42 U.S.C. §300gg-14
Extension of Dependent Coverage
√
√
√
√
42 U.S.C. §300gg-16;
26 U.S.C. §105(h)
Prohibition of Discrimination Based
on Salary
√h
√h
√h
N.A.
42 U.S.C. §300gg-7
Waiting Period Limitation
√
√
√
N.A.
42 U.S.C. §300gg-2
Guaranteed Renewability
√
√
N.A.
√
42 U.S.C. §300gg-12
Prohibition on Rescissions
√
√
√
√
29 U.S.C. §1161- §1168
COBRA Continuation Coveragei
√
√j
√j
N.A.
42 U.S.C. §300gg-28
Coverage for Students Who Take a
Medically Necessary Leave of Absence
√
√
√
√
Keeping Coverage
Health Insurance Premiums
42 U.S.C. §300gg-4(b)
Prohibition on Using Health Status as
a Rating Factor
√
√
√
√k
42 U.S.C. §300gg
Rating Restrictions
N.A.
√
N.A.
√
42 U.S.C. §300gg-94
Rate Review
N.A.
√
N.A.
√
42 U.S.C. §18032
Single Risk Pool
N.A.
√
N.A.
√
42 U.S.C. §300gg-18
Medical Loss Ratio
√
√
N.A.
√
N.A.
√
N.A.
√
√
√
√
√
Covered Benefits
42 U.S.C. §300gg-6(a);
42 U.S.C. §18022
Coverage of Essential Health Benefits
42 U.S.C. §300gg-13
Coverage of Preventive Health
Services Without Cost Sharing
42 U.S.C. §300gg-13,
Stat. Note.
Coverage of COVID-19 Vaccinations
and Other Qualifying Preventive
Services
√
√
√
√
42 U.S.C. §300gg-8
Coverage for Individuals Participating
in Approved Clinical Trials
√
√
√
√
Congressional Research Service
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Federal Requirements on Private Health Insurance Plans
Groupb
Fully Insuredd
U.S. Codea
Provision
Large
Groupf
Small
Groupf
SelfInsurede
Nongroupc
42 U.S.C. §300gg-25
Coverage of Minimum Hospital Stay
After Childbirth
√
√
√
√
42 U.S.C. §300gg-26
Mental Health Parity
√
√l
√l
√
42 U.S.C. §300gg-27
Coverage of Reconstruction After
Mastectomy
√
√
√
√
42 U.S.C. §2000e(k)m
Coverage of Pregnancy-Related
Conditions
√n
√n
√n
N.A.
42 U.S.C. §300gg-3
Prohibition on Coverage Exclusions
Based on Preexisting Health
Conditions
√
√
√
√
Enrollee Cost-Sharing and Plan Payment for Benefits
42 U.S.C. §300gg-6(b);
42 U.S.C. §18022
Maximum Annual Limitation on Cost
Sharing
√
√
√
√
42 U.S.C. §300gg-6(b);
42 U.S.C. §18022
Minimum Actuarial Value
Requirements
N.A.
√
N.A.
√
42 U.S.C. §300gg-11
Prohibition on Lifetime and Annual
Coverage Limits
√
√
√
√
42 U.S.C. §300gg-111, 112 Preventing Surprise Medical and Air
Ambulance Bills
√
√
√
√
42 U.S.C. §300gg-113
Continuity of Care
√
√
√
√
42 U.S.C. §300gg-115(b)
Services Provided Based on Incorrect
Provider Directory Information
√
√
√
√
42 U.S.C. §300gg-117
Choice of Health Care Professionals
√
√
√
√
42 U.S.C. §300gg-5
Nondiscrimination Regarding Health
Care Providers
√
√
√
√
42 U.S.C. §300gg-119
Prohibition on Gag Clauses on Price
and Quality Information
√
√
√
√
Health Care Provider Interactions
Enrollee Information and Appeals
42 U.S.C. §300gg-15
Summary of Benefits and Coverage
and Uniform Glossary
√
√
√
√
42 U.S.C. §300gg-111(f)
Advanced Explanation of Benefitso
√
√
√
√
42 U.S.C. §300gg-111(e)
Plan Identification Card Information
√
√
√
√
42 U.S.C. §300gg-114;
42 U.S.C. §300gg-15ap
Price Comparison Tool
√
√
√
√
42 U.S.C. §300gg-115(a)
Provider Directory Requirements
√
√
√
√
42 U.S.C. §300gg-115(c)
Disclosure of Patient Protections
Against Balance Billing
√
√
√
√
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Federal Requirements on Private Health Insurance Plans
Groupb
Fully Insuredd
U.S. Codea
Provision
Large
Groupf
Small
Groupf
SelfInsurede
Nongroupc
42 U.S.C. §300gg-19b
Information on Prescription Drugs
√
√
√
√
42 U.S.C. §300gg-46
Disclosure to Enrollees of Individual
Market Coverage
N.A.
N.A.
N.A.
√
42 U.S.C. §300gg-19
Appeals Process and External Review
√
√
√
√
Federal and Public Reporting Requirements
42 U.S.C. §300gg-17
Reporting Requirements Regarding
Quality of Care
√
√
√
√
42 U.S.C. §300gg-118
Reporting Requirements Regarding
Air Ambulanceso
√
√
√
√
42 U.S.C. §300gg-120
Reporting Requirements Regarding
Pharmacy Benefits and Drug Costs
√
√
√
√
42 U.S.C. 300gg-15aq
Transparency in Coverageo
√
√
√
√
Source: Congressional Research Service analysis of federal statutes.
Notes: N.A. indicates the requirement is not applicable to that type of health plan. The requirements listed in
the table do not comprise a comprehensive list of all federal requirements and standards that apply to all health
plans.
a. Some requirements listed in this table also may be found in other sections of the U.S. Code.
b. Health insurance may be provided to a group of people that are drawn together by an employer or other
organization, such as a trade union. Generally, such groups form for a purpose other than obtaining
insurance, such as employment. Insurance provided to a group is referred to as group coverage or group
insurance. With respect to group coverage, the entity that purchases health insurance on behalf of a group is
referred to as the plan sponsor.
c. Consumers who are not associated with a group can obtain health coverage by purchasing it directly from
an insurer in the nongroup (or individual) health insurance market.
d. A fully insured health plan is one in which the plan sponsor purchases health coverage from a state-licensed
insurer; the insurer assumes the risk of paying the medical claims of the sponsor’s enrollees.
e. Self-insured plans refer to health coverage that is provided directly by the organization sponsoring coverage
for its members (e.g., a firm providing health benefits to its employees). Such organizations set aside funds
and pay for health benefits directly. Under self-insurance, the organization bears the risk for covering
medical claims. In general, the size of a self-insured employer does not affect the applicability of federal
requirements.
f.
States may elect to define small groups as groups with 50 or fewer individuals or as groups with 100 or
fewer individuals. The definition for large group builds on the small-group definition; a large group would
have at least 51 individuals or at least 101 individuals, depending on which small-group definition a given
state uses.
g. Employers with fewer than 50 employees are not required to comply with the employer shared
responsibility provisions.
h. Fully insured plans are subject to the nondiscrimination requirement codified at 42 U.S.C. §300gg-16 (and
incorporated by reference into the Employee Retirement Income Security Act of 1974 and the Internal
Revenue Code). Self-insured plans are subject to the nondiscrimination requirement codified at 26 U.S.C.
§105(h). The nondiscrimination requirement for fully insured plans is not in effect as of the date of this
report, but the requirement for self-insured plans is in effect.
i.
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272).
j.
Employers with fewer than 20 employees are not required to comply with COBRA’s coverage continuation
requirement.
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Federal Requirements on Private Health Insurance Plans
k.
l.
m.
n.
o.
p.
q.
As part of this requirement, a plan may establish premium discounts or rebates or may modify cost sharing
requirements in return for adherence to a wellness plan. This does not apply to nongroup plans.
Fully insured small-group plans are subject to mental health parity requirements because of the
incorporation of parity requirements into essential health benefit requirements. Self-insured plans
sponsored by small employers (50 or fewer employees) are exempt from mental health parity
requirements.
Also see 29 C.F.R. §1604.10 and 29 C.F.R. §1604, Appendix to Part 1604—Questions and Answers on the
Pregnancy Discrimination Act, P.L. 95-555, 92 Stat. 2076 (1978).
This requirement applies to employers with 15 or more employees, whether the coverage is fully insured or
self-insured.
This is a recently enacted requirement and, as of the date of this report, implementation of some or all
aspects of this requirement has not occurred.
Also see 45 C.F.R. §147.211.
Also see 45 C.F.R. §147.212.
Obtaining Coverage
Requirements in this section relate to consumers’ eligibility for coverage.
Guaranteed Issue
Plans must comply with the guaranteed issue requirement.13 In general, plans must accept every
applicant for such coverage, as long as the applicant agrees to the terms and conditions of the
insurance offer (e.g., premium). Plans may restrict enrollment to open and special enrollment
periods under specified circumstances; such circumstances differ between nongroup and group
plans.14 Eligibility for group coverage may depend on meeting a waiting period requirement.15
Plans that otherwise would be required to offer coverage on a guaranteed-issue basis are allowed
to deny coverage to individuals and employers in certain circumstances, such as when a plan
demonstrates that it does not have the network capacity to deliver services to additional enrollees
or the financial capacity to offer additional coverage.
Large-group, small-group, and nongroup plans are subject to this requirement.
Employer Shared Responsibility Provisions
The employer shared responsibility provisions (ESRP), often referred to as the employer
mandate, generally incentivize large employers to offer adequate, affordable health insurance
coverage to their full-time employees and their full-time employees’ dependents.16 If an
13 42 U.S.C. §300gg-1.
14 Nongroup plans that choose to establish an open enrollment period must apply the same period to plans inside and
outside the health insurance exchanges. The open enrollment period rules applicable to exchanges are codified at
45 C.F.R. §155.410. Group plans must allow enrollment during any time of the year, with an exception for small-group
plans. Small-group plans may limit enrollment to an annual period from November 15 through December 15 of each
year if the plan sponsor does not comply with provisions relating to employer-contribution or group-participation rules,
pursuant to state law; see 45 C.F.R. §147.104(b). Qualifying events for special enrollment periods are defined in §603
of the Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93-406) and in 45 C.F.R. §155.420(d).
15 A waiting period refers to an amount of time that must pass before an individual becomes eligible to enroll under the
terms of the plan. A federal requirement specifically concerning the duration of waiting periods is discussed later in this
report (see “Waiting Period Limitation”).
16 26 U.S.C. §4980H. For more information, see CRS Report R45455, The Affordable Care Act’s (ACA’s) Employer
Shared Responsibility Provisions (ESRP).
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Federal Requirements on Private Health Insurance Plans
applicable large employer fails to offer health insurance or offers substandard coverage to its
employees, the employer may be subject to a penalty.
This requirement applies to employers with 50 or more employees, whether the coverage is fully
insured or self-insured.
Prohibition on Using Health Status for Eligibility Determinations
Plans are prohibited from basing applicant eligibility on health status-related factors.17 Such
factors include health status, medical condition (including both physical and mental illness),
claims experience, receipt of health care, medical history, genetic information, evidence of
insurability (including conditions arising out of acts of domestic violence), disability, and any
other health status-related factor determined appropriate by the HHS Secretary. (A companion
requirement regarding health nondiscrimination applies to premiums; see “Prohibition on Using
Health Status as a Rating Factor,” below.)
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Nondiscrimination Based on Genetic Information
Plans are prohibited from (1) using genetic information to deny coverage, adjust premiums, or
impose a preexisting-condition exclusion; (2) requiring or requesting genetic testing; and (3)
collecting or acquiring genetic information for insurance underwriting purposes.18
Large-group, small-group, self-insured, and nongroup plans are subject to these requirements.
Extension of Dependent Coverage
If a plan offers dependent coverage to children, the plan must make such coverage available to a
child under the age of 26.19 Plans that offer dependent coverage must make coverage available for
both married and unmarried adult children under the age of 26, but plans do not have to make
coverage available to the adult child’s children or spouse (although a plan may voluntarily choose
to cover these individuals).
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Prohibition of Discrimination Based on Salary
The sponsors of health plans (e.g., employers) are prohibited from establishing eligibility criteria
based on any full-time employee’s total hourly or annual salary.20 Eligibility rules are not
permitted to discriminate in favor of higher-wage employees. Additionally, sponsors are
prohibited from providing benefits under a plan that discriminates in favor of higher-wage
employees (i.e., a sponsor must provide all the benefits it provides to higher-wage employees to
all other full-time employees).
Large-group, small-group, and self-insured plans are subject to this requirement.
17 42 U.S.C. §300gg-4(a).
18 42 U.S.C. §§300gg–3 and 300gg–4, and 45 C.F.R. §§147.110 and 146.121.
19 42 U.S.C. §300gg-14.
20 Fully insured plans are subject to the nondiscrimination requirement codified at 42 U.S.C. §300gg-16 (and
incorporated by reference into ERISA and the Internal Revenue Code). Self-insured plans are subject to the
nondiscrimination requirement codified at 26 U.S.C. §105(h).
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Federal Requirements on Private Health Insurance Plans
Waiting Period Limitation
Plans are prohibited from establishing waiting periods longer than 90 days.21 A waiting period
refers to the time that must pass before coverage can go into effect for an individual who is
eligible to enroll under the terms of the plan. In general, if an individual can elect coverage that
begins within 90 days of the beginning of the waiting period, the plan complies with this
provision.
Large-group, small-group, and self-insured plans are subject to this requirement.
Keeping Coverage
These requirements relate to consumers’ ability to maintain their coverage once enrolled.
Guaranteed Renewability
Guaranteed renewability is a requirement for plans to renew coverage at the option of the
policyholder or the plan sponsor for nongroup plans and group plans, respectively.22 Plans that
must comply with guaranteed renewability may discontinue the plan only under certain
circumstances. For example, a plan may discontinue coverage if the individual or plan sponsor
fails to pay premiums or if an individual or plan sponsor performs an act that constitutes fraud in
connection with the coverage.
Large-group, small-group, and nongroup plans are subject to this requirement.
Prohibition on Rescissions
Plans generally are prohibited from rescinding coverage; the practice of rescission refers to the
retroactive cancellation of coverage after an enrollee has become sick or injured.23 Plans may
rescind coverage if an enrollee committed fraud or made an intentional misrepresentation of
material fact, as prohibited by the terms of the plan. Such cancellation of coverage requires a plan
to provide at least 30 calendar days’ advance notice to the enrollee.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
COBRA Continuation Coverage24
Certain employers are required to continue to offer coverage to certain employees and their
dependents (qualified beneficiaries) who otherwise would be ineligible for such coverage because
of certain circumstances (qualifying events).25 Generally, plan sponsors must provide access to
continuation coverage to qualified beneficiaries for up to 18 months (or longer, under certain
circumstances) following a qualifying event. Beneficiaries may be charged up to 102% of the
premium for such coverage.
This requirement applies to employers with 20 or more employees, whether the coverage is fully
insured or self-insured.
21 42 U.S.C. §300gg-7.
22 42 U.S.C. §300gg-2.
23 42 U.S.C. §300gg-12.
24 This requirement was established under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA; P.L. 99-272). Coverage received under this requirement is typically referred to as COBRA coverage.
25 29 U.S.C. §§1161-1168. An example of a qualifying event is termination from a job.
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Federal Requirements on Private Health Insurance Plans
Coverage for Students Who Take a Medically Necessary Leave of Absence
Plans are prohibited from terminating the health coverage of an applicable student who takes a
leave of absence (or other change in educational enrollment) from a postsecondary educational
institution that causes the student to lose student status for health coverage purposes.26 The leave
of absence or change in educational enrollment must be medically necessary and must begin
while the student is suffering from a severe illness or injury. These requirements are colloquially
referred to as Michelle’s Law.27
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Health Insurance Premiums
The following requirements relate to premiums, which are the amounts consumers and others pay
for health coverage.28
Prohibition on Using Health Status as a Rating Factor
Plans are prohibited from varying premiums for similarly situated individuals based on the health
status-related factors of the individuals or their dependents.29 Such factors include health status,
medical condition (including both physical and mental illness), claims experience, receipt of
health care, medical history, genetic information, evidence of insurability (including conditions
arising out of acts of domestic violence), disability, and any other health status-related factor
determined appropriate by the HHS Secretary. (A companion requirement regarding health
nondiscrimination applies to eligibility; see “Prohibition on Using Health Status for Eligibility
Determinations,” above.)
Plans may establish premium discounts or rebates or modify cost-sharing requirements in return
for adherence to a wellness program.30 If a wellness program is made available to all similarly
situated individuals and either does not provide a reward or provides a reward based solely on
participation, then the program complies with federal law without having to satisfy any additional
standards. If a program provides a reward based on an individual meeting a certain standard
relating to a health factor, then the program must meet additional requirements specified in
federal regulations and the reward must be capped at 30% of the cost of employee-only coverage
under the plan. However, the Secretaries of HHS, Labor, and the Treasury have discretion to
increase the reward up to 50% of the cost of coverage if the increase is determined to be
appropriate.
Large-group, small-group, self-insured, and nongroup plans are subject to the overall health
nondiscrimination requirement. Large-group, small-group, and self-insured plans are subject to
the conditions for providing discounts or rebates for wellness activities.
26 42 U.S.C. §300gg–28.
27 P.L. 110-381.
28 For the sake of simplicity, the use of the term premium in this report broadly applies not only to the final amounts
paid by consumers and others for coverage but also the prices for insurance products that health insurance issuers
determine as they develop final premium amounts.
29 42 U.S.C. §300gg-4(b). For information about identifying similarly situated individuals, see 45 C.F.R. §146.121(d).
30 42 U.S.C. §300gg-4(j).
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Federal Requirements on Private Health Insurance Plans
Rating Restrictions
Plans must use adjusted (or modified) community rating rules to determine premiums.31 Adjusted
community rating prohibits the use of health factors in the determination of premiums but allows
premium variation based on other factors. Premiums may vary based on the following four
factors:32
•
•
•
•
Type of Enrollment. Plans may vary premiums based on whether only an
individual enrolls in the plan or an individual and dependent(s) enrolls (e.g., selfonly coverage, family coverage).
Geographic Rating Area. Plans may vary premiums based on geographic
location. States are required to establish one or more geographic rating areas
within the state for the purposes of this provision. The rating areas must be based
on one of the following geographic boundaries: (1) counties, (2) three-digit zip
codes, or (3) metropolitan statistical areas (MSAs) and non-MSAs.33
Tobacco Use. Plans may not charge a tobacco user more than 1.5 times the
premium they charge an individual who does not use tobacco.
Age. Plans may not charge an older individual more than three times the
premium they charge a 21-year-old individual. All states must use a uniform age
rating curve to specify the rates across age bands (with exceptions for certain
states).34 For plan years beginning on or after January 1, 2018, plans must use
one age band for all individuals aged 0-14 years, one-year age bands for
individuals aged 15-63 years, and one age band for all individuals aged 64 years
and older.
Small-group and nongroup plans are subject to this requirement.
Rate Review
Under rate review, proposed annual health insurance rate increases that meet or exceed a federal
default threshold are reviewed by a state or the Centers for Medicare & Medicaid Services
31 42 U.S.C. §300gg.
32 Federal law allows states to impose additional rating requirements, provided the state requirements neither conflict
with federal law nor prevent the implementation of federal requirements. For more information about state rating
requirements, see Centers for Medicare & Medicaid Services (CMS), Center for Consumer Information & Insurance
Oversight (CCIIO), “Market Rating Reforms: State Specific Rating Variations,” at https://www.cms.gov/CCIIO/
Programs-and-Initiatives/Health-Insurance-Market-Reforms/state-rating.
33 45 C.F.R. §147.102(b). A three-digit zip code refers to the first three digits of a five-digit zip code. A three-digit zip
code represents a larger geographical area than a five-digit zip code, as all five-digit zip codes that share the same first
three numbers are included in the three-digit zip code.
34 For the federal default and state-specific age rating ratios, see CCIIO, “Market Rating Reforms: State Specific Age
Curve Variations,” at https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/staterating.html#age.
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Federal Requirements on Private Health Insurance Plans
(CMS).35 The federal default threshold is 15%.36 States have the option to apply for state-specific
thresholds.37
Plans subject to review are required to submit to CMS and the relevant state a justification for the
proposed rate increase prior to its implementation, and CMS and the state must publicly disclose
the information. The rate review process does not establish federal authority to deny
implementation of a proposed rate increase; instead, it is a sunshine provision designed to
publicly disclose rate increases that are determined to be unreasonable.
Small-group and nongroup plans are subject to this requirement.38
Single Risk Pool
A risk pool is used to develop premiums for coverage.39 A health insurance issuer must consider
all enrollees in specified plans offered by the issuer to comprise a single risk pool.40 Specifically,
an issuer must include all enrollees in nongroup plans offered by the issuer in a given state in one
risk pool. Similarly, an issuer must include all enrollees in small-group plans offered by the issuer
in a given state in a separate risk pool. (However, states have the option to merge their nongroup
and small-group markets; if a state does so, an issuer will have a single risk pool for all enrollees
in its nongroup and small-group plans.)
Small-group and nongroup plans are subject to this requirement.
Medical Loss Ratio
A medical loss ratio (MLR) is the percentage of a plan’s premium revenue spent on medical
claims (i.e., plan payments toward enrollees’ use of health care covered under the plan).41 The
MLR calculation includes adjustments for quality improvement expenditures, taxes, regulatory
fees, and other factors. Plans are required to report to the HHS Secretary their MLRs with respect
to each plan year. Plans must also meet certain minimum MLR requirements, or otherwise
provide rebates to enrollees.
Nongroup and small-group plans must meet a minimum MLR of 80%; for large groups, the
minimum MLR is 85%. States are permitted to increase the percentages. The HHS Secretary may
lower a state’s percentage for the nongroup market if HHS determines that application of a
minimum MLR of 80% would destabilize that state’s nongroup market.42 Plans whose MLR falls
35 42 U.S.C. §300gg-94. CMS identifies whether states have effective rate review systems. In states with effective rate
review systems, the state conducts review; in states that do not have effective rate review systems, CMS conducts the
review.
36 45 C.F.R. §§154.101 and 154.200. The federal default threshold was 10% in previous years. It was modified by
HHS, “HHS Notice of Benefit and Payment Parameters for 2019,” 83 Federal Register 16930, April 17, 2018.
37 Any state that wishes to apply a higher threshold than the federal default must submit a proposal for approval to the
HHS Secretary. Since states generally are allowed to enact stricter requirements compared with relevant federal
provisions, states may impose a rate review threshold that is lower than the federal default on their own without
approval from the Secretary. For more information, see CMS, CCIIO, “State-Specific Threshold Proposals,” at
https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/sst.
38 45 C.F.R. §§154.101 and 154.200.
39 See the appendix of CRS Report R47507, Private Health Insurance: A Primer for further discussion of health
insurance risk and risk pools.
40 42 U.S.C. §18032(c) and 45 C.F.R. §156.80.
41 42 U.S.C. §300gg-18.
42 To view a list of state requests for a medical loss ratio adjustment, see CMS, CCIIO, “State Requests for MLR
(continued...)
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Federal Requirements on Private Health Insurance Plans
below the specified limit must provide rebates to enrollees on a pro rata basis. Any required
rebates must be paid to enrollees by August of that year.
Large-group, small-group, and nongroup plans are subject to this requirement.
Covered Benefits
These requirements generally relate to benefits that plans cover (including services such as
physician visits, and items such as prescription drugs). Some of these provisions include
mandates to cover certain benefits; others do not mandate coverage but impose requirements
related to certain benefits, to the extent they are covered.
In addition to the requirements discussed in this section, certain provisions discussed elsewhere in
this report also have benefit coverage components (See, e.g., “Prohibition of Discrimination
Based on Salary.”)
Coverage of Essential Health Benefits
Plans must cover a core package of essential health benefits (EHB).43 The benefits that comprise
the EHB generally are not defined in federal law; rather, the law lists 10 broad categories in
which benefits must be covered and tasks the HHS Secretary with further defining the EHB.44
The Secretary’s definition of EHB must at least include the 10 categories and it must conform to
certain limitations and considerations (e.g., it must be equal in scope to the benefits provided
under a “typical employer plan”).45 To date, the HHS Secretary has directed each state to select an
EHB benchmark plan, within certain parameters, to serve as the basis for the state’s EHB.46 The
benchmark plan serves as a reference for applicable plans in that state, which must provide EHB
coverage that is “substantially equal” to such coverage in the benchmark plan, as specified in
regulations.47
Federal regulations have provided specific requirements regarding some EHB categories.48 For
example, current regulation provides that an applicable health plan meets the EHB requirements
for the prescription drugs category of EHB if it covers at least one drug in every U.S.
Pharmacopeia category and class or the same number of prescription drugs in each category and
class as the state-selected EHB benchmark plan.
Cost sharing is possible for most categories of EHB, although certain federal requirements limit
cost sharing on the EHB, as discussed in “Enrollee Cost-Sharing and Plan Payment for Benefits.”
Coverage and cost sharing for EHB services furnished by out-of-network providers may vary.
Adjustment,” at https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/
state_mlr_adj_requests.
43 42 U.S.C. §§300gg-6 and 18022.
44 The 10 categories of essential health benefits (EHB) are ambulatory patient services; emergency services;
hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral
health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive
and wellness services and chronic disease management; and pediatric services, including oral and vision care.
45 42 U.S.C. §18022(b).
46 45 C.F.R. §§156.100 et seq. For more information on the process for defining the EHB in each state, as well as each
state’s benchmark plan, see CMS, CCIIO, “Information on Essential Health Benefits (EHB) Benchmark Plans,” at
https://www.cms.gov/marketplace/resources/data/essential-health-benefits.
47 45 C.F.R. §156.115(a)(1).
48 See, for example, 45 C.F.R. §§156.115 and 156.122.
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Federal Requirements on Private Health Insurance Plans
Small-group and nongroup plans are subject to this requirement.
Coverage of Preventive Health Services Without Cost Sharing
Plans are required to cover certain preventive health services (and items) without cost sharing.
This requirement includes, at a minimum, four categories of statutorily required coverage:49
•
•
•
•
Evidence-based items or services recommended with an A or B rating by the U.S.
Preventive Services Task Force (USPSTF);50
Immunizations that have in effect a recommendation by the Advisory Committee
on Immunization Practices (ACIP) of the Centers for Disease Control and
Prevention (CDC), for a given individual;51
Evidence-informed preventive care and screenings for infants, children, and
adolescents, as recommended in guidelines supported by the Health Resources
and Services Administration (HRSA);52 and
Additional preventive care and screenings for women as recommended in
guidelines supported by HRSA.53
If there are changes in recommendations or guidelines in any of these categories (e.g., the
USPSTF announces a new A or B rating), plans generally are required to provide relevant
coverage as of plan years that begin on or after the date that is one year after the change.54
Although cost sharing generally is prohibited for specified preventive benefits, cost sharing for
office visits associated with a furnished preventive benefit may be allowed, as specified in
regulation.55 By regulation, plans generally are not required to cover preventive benefits without
cost sharing if the benefits are furnished out of network.56 Additionally, if a recommended
preventive service does not specify the frequency, method, treatment, or setting for the service,
49 42 U.S.C. §300gg-13; 45 C.F.R. §147.130. The complete list of preventive services required to be covered, per all of
the categories of recommendations, is available at HealthCare.gov, “Preventive Health Services,” at
http://www.healthcare.gov/coverage/preventive-care-benefits/.
50 U.S. Preventive Services Task Force, “A & B Recommendations,” at https://uspreventiveservicestaskforce.org/
uspstf/recommendation-topics/uspstf-a-and-b-recommendations.
51 Advisory Committee on Immunization Practices (ACIP), “ACIP Vaccine Recommendations and Guidelines:
Vaccine-Specific Recommendations,” at https://www.cdc.gov/acip-recs/hcp/vaccine-specific/. Also see CDC,
“Immunization Schedules,” at https://www.cdc.gov/vaccines/hcp/imz-schedules/. See 45 C.F.R. §147.130(a)(1)(ii)
regarding ACIP recommendations being considered “in effect” and “for routine use” for purpose of this coverage
requirement.
52 Health Resources and Services Administration (HRSA), “Bright Futures,” at https://mchb.hrsa.gov/programs-impact/
bright-futures. See linked “Periodicity Schedule.”
53 HRSA, “Women’s Preventive Services Guidelines,” at https://www.hrsa.gov/womens-guidelines. Also see Women’s
Preventive Services Initiative (WPSI), “Recommendations,” at https://www.womenspreventivehealth.org/
recommendations/. For additional information about this and the other categories of recommendations, see the “Federal
Regulation of Private Health Insurance” section of CRS Report R46785, Federal Support for Reproductive Health
Services: Frequently Asked Questions. That section of the report includes general discussion of the preventive services
coverage requirement and particular aspects of the requirement (such as coverage of contraceptive services and
supplies, per HRSA-supported recommendations on preventive services for women).
54 See 45 C.F.R. §147.130(b).
55 Whether cost sharing for office visits is allowed generally depends on whether the preventive service or item is the
primary purpose of the visit and whether the service or item is billed or tracked separately from the office visit. See 45
C.F.R. §147.130(a)(2).
56 45 C.F.R. §147.130(a)(3).
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Federal Requirements on Private Health Insurance Plans
then the plan can determine coverage limitations by relying on “reasonable medical management”
techniques.57
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Coverage of COVID-19 Vaccinations and Other Qualifying Preventive Services
Plans are required to cover Coronavirus Disease 2019 (COVID-19) vaccinations (if not otherwise
covered by the federal government) and vaccine administration fees (even if the vaccines are
federally covered) without consumer cost sharing. This requirement also applies to any
“qualifying coronavirus preventive service,” defined as “an item, service, or immunization that is
intended to prevent or mitigate coronavirus disease 2019” and that is recommended by the
USPSTF or ACIP, as specified.58 This requirement largely mirrors the existing requirement to
cover preventive services without cost sharing, described above. One difference is that this
coverage requirement is effective 15 business days after a relevant USPSTF or ACIP
recommendation.59
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Coverage for Individuals Participating in Approved Clinical Trials
Plans are subject to nondiscrimination and other provisions with respect to qualified individuals’
access to and costs associated with clinical trials.60 Specifically, plans cannot
•
•
•
prohibit qualified individuals from participating in an approved clinical trial;
deny, limit, or place conditions on the coverage of routine patient costs
associated with participation in an approved clinical trial; and
discriminate against qualified individuals on the basis of their participation in
approved clinical trials.61
In short, for a qualified individual participating in an approved clinical trial, a plan must provide
coverage for routine patient costs (all items and services that typically would be covered under
the plan for a qualified individual not enrolled in a clinical trial). Plans may impose consumer
cost-sharing requirements on this coverage. Coverage and cost sharing may vary for clinical trials
offered through an out-of-network provider. The costs of the trial’s “investigational item, device,
or service itself” and other specified costs are not required to be covered by the plan.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
57 45 C.F.R. §147.130(a)(4).
58 42 U.S.C. §300gg-13, Statutory Note, “Rapid Coverage of Preventive Services and Vaccines for Coronavirus.”
59 For additional discussion of this requirement, see CRS Report R46359, COVID-19 and Private Health Insurance
Coverage: Frequently Asked Questions. As that report also discusses, the Coronavirus Disease 2019 (COVID-19)
vaccination coverage requirement is not time-limited, but a separate requirement regarding private health insurance
coverage of COVID-19 testing is limited to the duration of the declared public health emergency. For that reason, the
testing coverage requirement is not otherwise included in this report. There are no federal requirements specific to
private health insurance coverage of COVID-19 treatments, but other requirements may be applicable (e.g., coverage of
the EHB).
60 For purposes of this provision, a qualified individual is an individual who (1) is eligible to participate in an approved
clinical trial for treatment of cancer or other life-threatening disease or condition and (2) has a referring health care
provider who either has concluded that the individual’s participation is appropriate or provides medical and scientific
information establishing that participation in a clinical trial would be appropriate.
61 42 U.S.C. §300gg-8.
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Federal Requirements on Private Health Insurance Plans
Coverage of Minimum Hospital Stay After Childbirth
Plans that provide coverage for maternity-related hospital stays generally are prohibited from
restricting coverage for the length of a hospital stay for childbirth for either the mother or the
newborn child to less than 48 hours following vaginal deliveries and to less than 96 hours
following caesarian deliveries.62 In addition, prior authorization requirements for these stays are
prohibited.63 Cost sharing is allowed for maternity-related hospital stays, as long as the cost
sharing for the portions of hospital stays following deliveries is not greater than cost sharing for
preceding portions of such stays.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Mental Health Parity
Federal parity law does not require plans to cover mental health and substance use disorder
(MH/SUD) benefits when such coverage is not otherwise required by federal or state law.
However, when a plan does cover both MH/SUD benefits and medical/surgical (M/S) benefits,
parity law generally prohibits the imposition of more restrictive limitations on the MH/SUD as
compared with the M/S benefits.64
Specifically, plans are prohibited from imposing more restrictive limits on MH/SUD benefits in
each of the following areas: aggregate lifetime limits and annual limits; financial requirements
(e.g., co-payments); quantitative treatment limitations (e.g., number of days or visits covered);
and nonquantitative treatment limitations, or NQTLs (e.g., preauthorization requirements).
Regulations also have established six classifications of benefits in which parity requirements
apply: (1) in-network inpatient, (2) out-of-network inpatient, (3) in-network outpatient, (4) out-ofnetwork outpatient, (5) emergency care, and (6) prescription drugs.65
In addition, plans are required to disclose certain information to enrollees and others upon
request, including the “criteria for medical necessity determinations” made with respect to
MH/SUD benefits.66
Finally, plans are required to conduct “comparative analyses of the design and application” of
their NQTLs and to make these analyses available to applicable federal and state authorities upon
request.67 The Secretaries of HHS, Labor, and the Treasury must annually request and review at
least 20 of these analyses and follow up on any parity violations identified.
Parity requirements apply to large-group plans, self-insured plans offered by large employers, and
nongroup plans. Primarily by incorporation of parity requirements into EHB requirements, smallgroup plans also are subject to parity law. Self-insured plans offered by small employers are
62 42 U.S.C. §300gg–25. There is an exception to the length-of-coverage requirement when providers make earlier
discharge decisions in consultation with mothers. Plans are prohibited from offering incentives or penalties to providers
or mothers to encourage shorter stays.
63 Some insurers include prior authorization requirements for certain covered benefits. For example, they may require
enrollees to obtain prior authorization from the insurer for routine hospital inpatient care, as a condition for covering
the care.
64 42 U.S.C. §300gg–26. For more information on parity requirements, see CRS Report R47402, Mental Health Parity
and Coverage in Private Health Insurance: Federal Requirements.
65
45 C.F.R. §146.136.
66 42 U.S.C. §300gg–26(a)(4).
67 42 U.S.C. §300gg–26(a)(8).
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exempt, and there is also an exemption for plans facing certain increased costs due to parity
implementation.68
Coverage of Reconstruction After Mastectomy
Plans that provide coverage for mastectomies also must cover prosthetic devices and
reconstructive surgery.69 Federal guidance has provided that this coverage requirement is
applicable to female and male enrollees, and the mastectomy does not need to have been
connected to a cancer diagnosis.70 Cost sharing is allowed if consistent with cost sharing for other
covered medical/surgical benefits.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Coverage of Pregnancy-Related Conditions
Certain employers offering health insurance are required to cover “expenses for pregnancyrelated conditions on the same basis as expenses for other medical conditions” for employees
enrolled in group plans.71 If the group plan offers coverage to employees’ spouses and
dependents, the requirement to cover pregnancy-related services also applies to employees’
spouses (but not necessarily to other dependents) enrolled in the plan.
This requirement applies to employers with 15 or more employees, whether their plans are fully
insured or self-insured.
Prohibition on Coverage Exclusions Based on Preexisting Health Conditions
Plans are prohibited from excluding coverage based on an enrollee’s preexisting health
conditions.72 This requirement does not mandate coverage for any specific benefit, if a plan
otherwise would not cover it. Rather, with respect to the benefits a plan does cover, the plan may
not exclude coverage of those benefits based on health conditions for any enrollee.73 A preexisting
health condition is a medical condition that was present before the date of enrollment for health
68 Although the small employer exemption initially applied to both fully insured and self-insured plans, EHB and parity
regulations have provided that plans subject to EHB requirements (including fully insured plans offered by small
employers) are also subject to parity requirements. Small employers (defined for this purpose as those with 50 or fewer
employees) that self-insure are still exempt from parity requirements. For discussion of these details and the separate
exemption regarding increased costs, see the Department of the Treasury, Department of Labor (DOL), and HHS,
“Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008;
Technical Amendment to External Review for Multi-State Plan Program,” 78 Federal Register 68239, November 13,
2013, starting at page 68248.
69 42 U.S.C. §300gg–27.
70 See Employee Benefits Security Administration, “Compliance Assistance Guide: Health Benefits Coverage Under
Federal Law.” September 2014, at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resourcecenter/publications/compliance-assistance-guide.pdf. Also see DOL, HHS, and Department of the Treasury, “FAQs
About Affordable Care Act Implementation Part 31, Mental Health Parity Implementation, And Women’s Health And
Cancer Rights Act Implementation,” April 20, 2016, at https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/
Downloads/FAQs-31_Final-4-20-16.pdf.
71 42 U.S.C. §2000e; 29 C.F.R. §1604.10, and 29 C.F.R. §1604, Appendix to Part 1604—Questions and Answers on
the Pregnancy Discrimination Act, P.L. 95-555, 92 Stat. 2076 (1978). See CRS Report R46785, Federal Support for
Reproductive Health Services: Frequently Asked Questions for additional information and citations.
72 42 U.S.C. §300gg-3.
73 Prior to the ACA, some plans were allowed to exclude benefits for preexisting conditions during what was referred to
as an exclusion period. This is different from a waiting period (see the “Waiting Period Limitation” section of this
report).
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Federal Requirements on Private Health Insurance Plans
coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or
received before such date.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Enrollee Cost Sharing and Plan Payment for Benefits
As enrollees receive benefits covered by a plan, the costs for those benefits are paid by the
enrollee and/or by the plan, depending on the plan’s terms. In addition to setting premiums and
determining covered benefits, plans set enrollees’ cost-sharing levels. Enrollee cost sharing, also
called out-of-pocket (OOP) costs, generally includes deductibles, coinsurance, and co-payments,
up to annual OOP limits.74 The terms of the plan also specify the amounts the plan will pay
providers for covered benefits.
The following requirements relate to enrollee cost sharing and/or the costs of the benefits that the
plans cover. They all reference the “Coverage of Essential Health Benefits” requirement
discussed in the prior section. Certain provisions discussed elsewhere in this report are also
relevant to other aspects of cost sharing or plan payments to providers, such as those relating to
out-of-network providers in “Health Care Provider Interactions.”
Maximum Annual Limitation on Cost Sharing
Plans must have annual limits on enrollee OOP costs that are no higher than federally set
amounts.75 In other words, once an enrollee’s OOP spending has met the federal annual limit (or a
plan’s own annual limit, if lower), the plan generally will pay 100% of covered applicable costs
for the remainder of the plan year.
HHS adjusts the limits each year through rulemaking and/or guidance using calculations required
by the ACA.76 In 2025, the limits cannot exceed $9,200 for self-only coverage and $18,400 for
coverage other than self-only.77 If a consumer is solely enrolled in a plan, the self-only limit
applies. If a consumer and one or more dependents are enrolled in a plan, both types of limits
apply.78
74 In general, beginning with each plan year, an enrollee pays 100% of costs for covered health care benefits until the
costs meet a certain threshold amount, called a deductible. Exceptions apply. After reaching the deductible, the enrollee
pays coinsurance (a percentage amount) or co-payments (a flat amount) for covered benefits and the plan pays the rest.
If an enrollee’s spending meets an annual out-of-pocket limit, the plan generally will pay 100% of covered costs for the
remainder of the plan year.
75 42 U.S.C. §300gg-6 and 18022.
76 See, for example, CMS, CCIIO, “Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing,
Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage for the 2025 Benefit
Year,” November 15, 2023, at https://www.cms.gov/files/document/2025-papi-parameters-guidance-2023-11-15.pdf.
77 See CRS Report R44065, Overview of Health Insurance Exchanges for these and prior year annual limits.
78 For example, for a family of three enrolled in a plan with the 2025 limits: Once individual 1 incurs $9,200 in cost
sharing for his or her benefits as specified above (generally, on in-network EHB), the plan is responsible for 100% of
the costs for such benefits for the rest of the plan year. However, if individuals 2 and 3 have incurred only $2,000 each
in cost sharing, they would still be responsible for cost sharing at that time. If any combination of the enrollees’ cost
sharing adds up to $18,400, then the plan would be responsible for 100% of all of the enrollees’ costs for covered
benefits for the rest of the plan year. For additional information about the annual OOP limit, see CMS, CCIIO,
“Embedded Self-Only Annual Limitation on Cost Sharing FAQs,” May 8, 2015, at https://www.dol.gov/sites/default/
files/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/hhs-guidance-embedded-selfonly-annual-limitation-on-cost-sharing-faqs.pdf.
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Federal Requirements on Private Health Insurance Plans
The limits generally apply only to in-network coverage of the EHB.79 However, certain
exceptions may apply.80
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.81
Minimum Actuarial Value Requirements
Plans must pay for covered benefits in compliance with minimum actuarial value (AV) standards.
AV estimates the “percentage of total average costs for covered benefits” to be paid by a plan.82 A
plan’s AV must comply with one of four levels corresponding with a precious metal designation
(i.e., platinum, gold, silver, or bronze).83 The four AV levels are 90% for platinum, 80% for gold,
70% for silver, and 60% for bronze.84
Given that plans and enrollees collectively pay total costs, AV is the plan counterpart to enrollee
cost-sharing expenses. The higher the AV percentage, the lower the cost sharing, on average. For
example, a silver plan expects to cover approximately 70% of total costs for covered benefits.
Because enrollees’ use of such benefits vary, a given enrollee’s actual cost sharing may be more
or less than 30% of costs associated with receipt of covered benefits. AV is not a measure of plan
generosity for an enrolled individual or family, nor is it a measure of premiums or benefits
packages.
AV calculations include only costs associated with a plan’s covered EHB that are furnished by innetwork providers, unless otherwise addressed in federal or state law.85
Small-group and nongroup plans are subject to this requirement.
Prohibition on Lifetime and Annual Coverage Limits
Plans are prohibited from setting lifetime or annual dollar limits on their coverage of the EHB,
generally whether provided in-network or out-of-network.86 In other words, plans may not limit
their spending for such benefits for any enrollee, either during the entire period an individual is
enrolled in the plan (lifetime coverage limits) or during a plan year (annual coverage limits).
Plans are permitted to place lifetime and annual coverage limits on covered benefits that are not
considered EHBs, to the extent that federal and state law otherwise permit such limits.
45 C.F.R. §156.130. Also see HHS, DOL, and Treasury, “Affordable Care Act Implementation FAQs – Set 18,”
January 9, 2014, at https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs18,
including questions 2 and 4. Hereinafter referred to as Tri-Agency FAQ 18.
80 See, for example, “Preventing Surprise Medical and Air Ambulance Bills.” Also see 45 C.F.R. §156.130(h)
regarding prescription drug coupons.
81 This requirement applies to EHB coverage, and large-group and self-insured plans are not required to cover the EHB.
The Tri-Agency FAQ 18, question 2, provides that such plans must use a permissible definition of EHB (including any
state-selected EHB benchmark plan) to determine whether they comply with this requirement. This is consistent with
regulations implementing the separate “Prohibition on Lifetime and Annual Coverage Limits”.
82 See the definition of actuarial value in the glossary on HealthCare.gov at https://www.healthcare.gov/glossary/
actuarial-value/.
83 42 U.S.C. §300gg-6 and 18022.
84 Regulations allow plans to fall within a specified actuarial value range and still comply with one of the four levels;
see 45 C.F.R. §156.140(c)(2).
85 45 C.F.R. §§156.20 and 156.135.
86 42 U.S.C. §300gg-11; 45 C.F.R. §147.126.
79
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Federal Requirements on Private Health Insurance Plans
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.87
Health Care Provider Interactions
These requirements relate to plan interactions and consumer interactions with providers,
including in the context of plan coverage and benefits for services furnished to enrollees by
certain out-of-network providers.
Certain requirements discussed in this section relate to provisions discussed elsewhere in this
report. (See, e.g., the relationship between “Provider Directory Requirements” and “Services
Provided Based on Incorrect Provider Directory Information.”)
Preventing Surprise Medical and Air Ambulance Bills
Plans are required to limit consumer cost sharing and to pay providers a specified amount when
enrollees receive certain out-of-network medical care:88
•
•
•
Out-of-network emergency services (if the plan covers services in an emergency
department of a hospital or an independent freestanding emergency department)
Nonemergency services provided by an out-of-network provider at an in-network
facility (when notice and consent requirements have not been satisfied)89
Out-of-network air ambulance services
When applicable, the cost-sharing requirement for these services cannot be greater than the cost
sharing that would have applied for the service had it been provided by an in-network provider.90
Generally, plans are required to calculate cost-sharing amounts based on the lesser of the billed
charge for the service or the plan’s median in-network rate for the service.91 Any cost-sharing
amounts paid by enrollees must be counted toward any in-network deductibles and in-network
OOP maximums.
The amount a plan is required to pay a provider for these out-of-network services is determined
according to a federal payment methodology.92 Under this methodology, the plan must make an
initial payment (or notice of denial of payment) to the out-of-network provider for services
rendered, after which the parties may negotiate to reach an agreed-upon payment amount. If
negotiations are unsuccessful, the parties may use an independent dispute resolution process,
wherein an arbitrator determines the final payment amount. However, if a state has its own
87 This requirement applies to EHB coverage, and large-group and self-insured plans are not required to cover the EHB.
Regulations provide that such plans must use a permissible definition of EHB (including any state-selected EHB
benchmark plan) to determine whether they comply with this requirement. See 45 C.F.R. §147.126(c).
88 42 U.S.C. §§300gg-111 and 300gg-112. For more information on the topic of surprise billing, including these federal
requirements, see CRS Report R46856, Surprise Billing in Private Health Insurance: Overview of Federal Consumer
Protections and Payment for Out-of-Network Services.
89 For notice and consent requirements, see 42 U.S.C. §300gg-132(d).
90 With covered, out-of-network air ambulance services specifically, the cost-sharing requirement must be the same as
the cost sharing for an in-network provider.
91 For applicable emergency services and covered nonemergency services provided by an out-of-network provider at an
in-network facility, if the service is provided in a state that has an applicable surprise billing law or an all-payer model
agreement, the cost-sharing amount is to be calculated in accordance with such law or agreement. See definition of
recognized amount at 45 C.F.R. §149.30, as referenced by 45 C.F.R §149.110(b)(3)(iii). For air ambulance services,
see 45 C.F.R. §149.130(b)(2).
92 For more information on the federal payment methodology, see CRS In Focus IF12073, Surprise Billing:
Independent Dispute Resolution Process.
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Federal Requirements on Private Health Insurance Plans
surprise billing law that pertains to a given plan type, provider type, and service, the state law
methodology would apply. In addition, if a state has an all-payer model agreement, the amount
designated under the agreement would apply.
In addition to the requirements above regarding out-of-network emergency benefits, plans must
comply with additional requirements relating to benefits for emergency services.93 If a plan
covers services in an emergency department of a hospital or emergency services in an
independent freestanding emergency department, the plan is required to cover those services
without the need for any prior authorization, without coverage limitations or requirements for outof-network providers and facilities that are more restrictive than the limitations or requirements
that apply to in-network emergency providers and facilities, and regardless of any other term or
condition of the plan (with limited exceptions).
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Continuity of Care
Plans are required to satisfy certain requirements when continuing care patients receive services
from a provider that initially was in network but subsequently became out of network during the
course of treatment (i.e., as a result of the termination of the contractual relationship between the
plan and provider).94 In these situations, plans must
•
•
•
notify the continuing care patient of the termination and the enrollee’s right to
elect continued transitional care from the now-out-of-network provider;
provide the continuing care patient with an opportunity to notify the plan of his
or her need for transitional care; and
permit the continuing care patient to continue his or her course of treatment from
the now out-of-network provider for, at most, 90 days and under the same terms
and conditions as applied when the provider was in network.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Services Provided Based on Incorrect Provider Directory Information
Plans must limit consumer cost sharing for covered, out-of-network services provided to enrollees
who relied on incorrect provider network information.95 If an enrollee receives a covered service
from an out-of-network provider that the enrollee thought was in network due to incorrect
information from the plan, the cost-sharing requirement cannot be greater than the cost sharing
that would have applied had the service been provided by an in-network provider. In addition,
plans must count any of these out-of-network cost-sharing amounts toward any in-network
deductibles and in-network OOP maximums.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
93 42 U.S.C. §300gg-111(a)(1).
94 42 U.S.C. §300gg-113. For purposes of this provision, a continuing care patient is an individual who satisfies one of
the following criteria: (1) is undergoing treatment for a serious and complex condition; (2) is undergoing institutional
or inpatient care; (3) is scheduled to undergo nonelective surgery; (4) is pregnant and undergoing a course of treatment
for the pregnancy; or (5) is or was determined to be terminally ill and is receiving treatment for such illness.
95 42 U.S.C. §300gg-115(b).
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Choice of Health Care Professionals
Plans are subject to three requirements relating to the choice of health care professionals.96 First,
plans that require or allow an enrollee to designate a participating primary care provider are
required to permit the designation of any participating primary care provider who is available to
accept the individual. Second, plans that require or allow an enrollee to designate a participating
primary care provider for an enrolled child are required to permit the designation of a
participating physician who specializes in pediatrics as the child’s primary care provider. Third,
plans that provide coverage for obstetrical or gynecological care cannot require authorization or
referral by the plan or any person (including a primary care provider) for a female enrollee who
seeks obstetrical or gynecological care from an in-network health care professional who
specializes in obstetrics or gynecology.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Nondiscrimination Regarding Health Care Providers
Plans may not discriminate, with respect to participation under the plan, against any health care
provider that is acting within the scope of that provider’s license or certification under applicable
state law.97 Federal law does not require that a plan contract with any health care provider willing
to abide by the plan’s terms and conditions, and it also does not prevent a plan or the HHS
Secretary from establishing varying reimbursement rates for providers based on quality or
performance measures.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Prohibition on Gag Clauses on Price and Quality Information
Plans are prohibited from entering into agreements with providers and other selected entities that
would directly or indirectly prevent the plan from
•
•
•
disclosing provider-specific cost or quality of care information to referring
providers, enrollees, plan sponsors, or individuals eligible to enroll in the plan;
electronically accessing de-identified claims and encounter data for each
enrollee;98 and
sharing such information with a business associate, consistent with applicable
privacy regulations.99
Plans are required to annually attest to the Departments of HHS, Labor, and the Treasury that the
plans are in compliance with this requirement.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Enrollee Information and Appeals
Requirements in this section relate to plan disclosure of certain information to enrollees (and
applicants, as specified) and to enrollees’ rights regarding appeals of coverage denials.
96 42 U.S.C. §300gg-117.
97
42 U.S.C. §300gg-5.
98 This component of the requirement applies to group health plans only.
99 42 U.S.C. §300gg-119. The term business associate is defined at 45 C.F.R. §160.103.
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In addition to the requirements discussed below, certain provisions discussed elsewhere in this
report also have enrollee information and appeals components (see, e.g., “Mental Health Parity”).
Summary of Benefits and Coverage and Uniform Glossary
Plans are required to provide a summary of benefits and coverage (SBC) to individuals at the time
of application, by the first day of coverage (if there are changes since the time of application),
prior to the time of renewal, and otherwise upon request.100 The SBC must meet certain
requirements with respect to the included content and the presentation of the content (e.g., it must
include uniform definitions of health insurance terms and a description of the coverage and cost
sharing for specified categories of benefits). Plans may provide the SBC in paper or electronic
form. Plans must notify enrollees of any material modifications (e.g., changes in benefits) no later
than 60 days prior to the date that the modifications would go into effect.
Plans also must provide a uniform glossary of terms commonly used in health insurance coverage
(e.g., coinsurance) to enrollees upon request.
Large-group, small-group, self-insured, and nongroup plans are subject to these requirements.
Advanced Explanation of Benefits
When an enrollee schedules to receive medical care from a provider and seeks to have the care
covered by a plan, providers are required to provide a good-faith estimate of expected charges for
such care to the enrollee’s plan.101 Upon receipt of this estimate, plans are required to develop a
notification, referred to as an advance explanation of benefits, and provide it to the enrollee
within designated timeframes.102 The advance explanation of benefits must contain specified
pieces of information, including the provider’s network status, the provider’s good-faith estimate
of expected charges, the plan’s estimated payment toward the expected charges, the enrollee’s
estimated cost sharing, an estimate of the amounts accumulated toward the enrollee’s deductible
and OOP limit, whether the scheduled care is subject to a medical management technique,103 and
a disclaimer that the information in the advance explanation of benefits comprises estimates that
are subject to change.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement. The
Departments of HHS, Labor, and the Treasury have deferred enforcement of this requirement
until the departments undertake notice and comment rulemaking.104 As of the date of this report,
regulations have not been issued.
100 42 U.S.C. §300gg-15; 45 C.F.R. §147.200. In addition, there is a separate requirement on group plans to provide a
Summary Plan Description (SPD) to enrollees. SPD requirements are applicable to employee benefit plans, which
includes group health plans but also may include other types of benefits (e.g., retirement plans). In general, this CRS
report focuses on requirements specific to health insurance and group health plans. For information about SPD and
other disclosure requirements on employee benefit plans, including certain additional disclosure requirements for group
health plans (such as the SBC requirement), see DOL, Employee Benefits Security Administration (EBSA), Reporting
and Disclosure Guide for Employee Benefit Plans, December 2022, at https://www.dol.gov/sites/dolgov/files/EBSA/
about-ebsa/our-activities/resource-center/publications/reporting-annual-disclosure.pdf.
101 Good-faith cost estimates are required to be provided when care is scheduled at least three business days in advance
(or upon request of the enrollee). 42 U.S.C. §300gg-136.
102 42 U.S.C. §300gg-111(f).
103 The term medical management technique includes concurrent review, prior authorization, and step-therapy or failfirst protocols. 42 U.S.C. §300gg-111(f)(1)(F).
104 DOL, HHS, and Treasury, “FAQs Part 49.”
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Federal Requirements on Private Health Insurance Plans
Plan Identification Card Information
Plans are required to include the following on any physical or electronic enrollee plan
identification cards: any deductible applicable to the plan, any OOP maximum limitation
applicable to the plan, and a consumer assistance telephone number and website.105
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Price Comparison Tool
Plans are required to disclose certain price comparison information to enrollees through a selfservice tool on a website; by telephone; and, upon request, in paper.106 Price comparison
information includes but is not limited to an estimate of the enrollee’s cost sharing for covered
items and services by billing code or descriptive term, amounts accumulated, in-network rates,
and out-of-network allowed amounts.107
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Provider Directory Requirements
Plans are required to establish and adhere to certain provider directory standards.108 These
standards require plans to establish a public, online database that contains provider directory
information for each provider with which they have a direct or indirect relationship. The
standards also require plans to establish a process to verify and update this information at least
once every 90 days. In addition, they require plans to establish a protocol to respond to enrollees
who request information (via phone or electronically) about a provider’s network status. Federal
law also requires that print directories include language indicating the date on which the
information was accurate and noting that enrollees should consult the online database or the plan
to obtain the most current provider directory information.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Disclosure of Patient Protections Against Balance Billing
Plans are required to disclose information on federal surprise billing requirements;109 applicable
state requirements addressing out-of-network provider charges, where appropriate; and the
appropriate state and federal agencies that an individual can contact if a provider is believed to
105 42 U.S.C. §300gg-111(e).
106 42 U.S.C. §§300gg-114 and 300gg-15a, and 45 C.F.R. §147.211.
107 Plans may limit price comparison information to a limited set of providers when providing information in paper
format. 45 C.F.R. §147.211.
108 42 U.S.C. §300gg-115(a).
109 More specifically, the requirements on plans at 42 U.S.C. §300gg-111 and the requirements on providers prohibiting
balance billing in certain circumstances at 42 U.S.C. §§300gg-131 and 300gg-132. The term balance billing, which is
one type of surprise bill, refers to amounts that an out-of-network provider can charge a consumer for care that is in
addition to the amount the consumer pays in out-of-network cost sharing and the amounts that the provider receives
from a plan for such services. For more information on the relationship between surprise bills and balance bills, see the
“Private Health Insurance Billing Overview” in CRS Report R46856, Surprise Billing in Private Health Insurance:
Overview of Federal Consumer Protections and Payment for Out-of-Network Services. For a discussion of the surprise
billing requirements at 42 U.S.C. §300gg-111 regarding out-of-network emergency services and covered,
nonemergency services provided by an out-of-network provider at an in-network facility (when notice and consent
requirements have not been satisfied), see “Preventing Surprise Medical and Air Ambulance Bills.”
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have violated such requirements.110 This information must be made publicly available, posted on
a public website of the plan, and included on each explanation of benefits for out-of-network
emergency services and covered, nonemergency services provided by an out-of-network provider
at an in-network facility.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Information on Prescription Drugs
Plans (including the pharmacy benefit managers contracted with them) are prohibited from
restricting pharmacies from informing health plan enrollees of the difference in OOP costs they
would pay for a prescription drug using their health plan coverage versus going “outside” of their
health plan benefit to purchase a prescription drug.111 Stated another way, this requirement aims
to end what some refer to as gag clauses in contracts between pharmacies and plans or pharmacy
benefit managers and to allow pharmacies to inform health plan enrollees if it would be less
expensive for them to obtain their prescription without using their health plan benefit.112
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Disclosure to Enrollees of Individual Market Coverage
Plans are required to disclose to enrollees any direct or indirect compensation provided to agents
or brokers associated with enrolling individuals in such coverage.113 Plans must make this
disclosure prior to an individual finalizing a plan selection and must include the disclosure on any
documentation confirming the individual’s enrollment. The plan also must annually report similar
information to HHS.
Nongroup plans are subject to this requirement.
Appeals Process and External Review
Plans must implement an effective appeals process for coverage determinations and claims.114 At
a minimum, plans must
•
•
•
have an internal claims appeals process;
provide notice to enrollees regarding available internal and external appeals
processes and the availability of any applicable assistance; and
allow an enrollee to review his or her file, present evidence and testimony, and
receive continued coverage pending the outcome.
110 42 U.S.C. §300gg-115(c).
111 42 U.S.C. §300gg-19b. Pharmacy benefit managers (PBMs) are intermediaries between health plans and
pharmacies, drug wholesalers, and manufacturers. PBMs perform functions such as designing drug formularies,
negotiating prices, and administering prescription drug payment systems.
112 For more information on prescription drug coupons and patient assistance programs, see CRS Report R44264,
Prescription Drug Discount Coupons and Patient Assistance Programs (PAPs).
113 42 U.S.C. §300gg-46. Separately, disclosure provisions require those providing “brokerage services” or
“consulting” to group health plans to disclose specified information, including information regarding direct and indirect
compensation, to plan fiduciaries. See 29 U.S.C. §1108(b)(2).
114 42 U.S.C. §300gg-19(a).
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Federal Requirements on Private Health Insurance Plans
Plans also must implement either a state or a federal external review process for coverage
determinations and claims.115
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Federal and Public Reporting Requirements
The following requirements relate to the reporting of specified information to the federal
government and/or the public disclosure of certain information.
In addition to the requirements discussed in this section, certain provisions discussed elsewhere in
this report also have federal and public reporting requirement components (see, e.g., “Mental
Health Parity”).
Reporting Requirements Regarding Quality of Care
The HHS Secretary was required to develop quality reporting requirements for use by specified
plans, concluding no later than two years after enactment of the ACA.116 The Secretary also was
required to publish regulations governing acceptable provider reimbursement structures not later
than two years after ACA enactment. No later than 180 days after these regulations were
promulgated, the U.S. Government Accountability Office was required to conduct a study
regarding the impact of these activities on the quality and cost of health care. To date, the HHS
Secretary has not published the required final regulations.
However, the Department of Labor’s (DOL’s) Employee Benefits Security Administration
published a proposed rule on July 21, 2016, that would modify current annual reporting
requirements for pension and other employee benefit plans under ERISA Titles I and IV.117 Under
these modified requirements, plans would report on the financial condition and operations of the
plan, among other things, using standardized forms (Form 5500 Annual Return/Report or the
Form 5500-SF). This rule proposes that a group health plan subject to ERISA that complies with
these reporting requirements would satisfy the quality reporting requirements in PHSA Section
2717, as incorporated in ERISA. To date, this proposal has not been finalized through
rulemaking.
Once the reporting requirements are implemented, plans would submit annually, to the HHS
Secretary (and to DOL and the Department of the Treasury) and to enrollees, a report addressing
whether plan benefits and reimbursement structures do the following:
•
•
•
Improve health outcomes through the use of quality reporting, case management,
care coordination, and chronic disease management
Implement activities to prevent hospital readmissions, improve patient safety, and
reduce medical errors
Implement wellness and health-promotion activities118
115 42 U.S.C. §300gg-19(b).
116 42 U.S.C. §300gg-17.
117 DOL, Employee Benefits Security Administration, “Annual Reporting and Disclosure,” Proposed Rule, 81 Federal
Register 47495, July 21, 2016.
118 Wellness and health-promotion activities include personalized wellness and prevention services, specifically efforts
related to smoking cessation, weight management, stress management, physical fitness, nutrition, heart disease
prevention, healthy lifestyle support, and diabetes prevention. These services may be made available by entities (e.g.,
health care providers) that conduct health risk assessments or provide ongoing face-to-face, telephonic, or web-based
intervention efforts for program participants.
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Federal Requirements on Private Health Insurance Plans
The HHS Secretary is required to make these reports available to the public and is permitted to
impose penalties for noncompliance.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Reporting Requirements Regarding Air Ambulances
HHS, in consultation with the Department of Transportation, was required to issue rulemaking no
later than one year after enactment of the No Surprises Act indicating how plans should submit
specified air ambulance information to the federal government.119 A proposed rule regarding this
requirement was published on September 16, 2021, but a final rule had not been published as of
the date of this report.120
Once the final rule is promulgated, plans would be required to report air ambulance claims data
and other specified information regarding air ambulance providers to the federal government for
two consecutive plan years.121
HHS, in consultation with the Department of Transportation, is required to summarize the
information submitted by plans to develop a report that is made available to the public.122
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Reporting Requirements Regarding Pharmacy Benefits and Drug Costs
Plans are required to annually submit specified information on prescription drug and total health
care spending to HHS, DOL, and Treasury.123 This information includes, but is not limited to, the
plan’s 50 brand prescription drugs most frequently dispensed by pharmacies; the plan’s 50 most
costly prescription drugs by total annual spending; the plan’s 50 prescription drugs with the
greatest increase in plan spending; total health care spending broken down by specified
categories; and the impacts of rebates, fees, and other remuneration paid by drug manufactures to
the plan (or its administrators or service providers) on plan premiums and cost-sharing.124
HHS, DOL, and Treasury are required to biannually issue a public, online report on prescription
drug reimbursements, prescription drug pricing trends, and the role of prescription drug costs in
contributing to premium increases or decreases.
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
119 Section 106(d) of the No Surprises Act, part of the Consolidated Appropriations Act, 2021 (P.L. 116-260).
120 Office of Personnel Management; Treasury, Internal Revenue Service; DOL, Employee Benefits Security
Administration; HHS, CMS, “Requirements Related to Air Ambulance Services, Agent and Broker Disclosures, and
Provider Enforcement,” Proposed Rule, 86 Federal Register 51730, September 16, 2021.
121 42 U.S.C. §300gg-118.
122 Section 106(c) of the No Surprises Act, part of the Consolidated Appropriations Act, 2021 (P.L. 116-260).
123 42 U.S.C. §300gg-120.
124 Regulations provide further specification for how plans are to meet this requirement. See Office of Personnel
Management; Treasury, Internal Revenue Service; DOL, Employee Benefits Security Administration; HHS, CMS,
“Prescription Drug and Health Care Spending,” Interim Final Rule, 86 Federal Register 66662, November 23, 2021.
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Federal Requirements on Private Health Insurance Plans
Transparency in Coverage
Plans are required to satisfy certain disclosure and reporting requirements relating to price
transparency.125 Plans are required to publicly post on a website, and to monthly update, three
machine-readable files that separately include
•
•
•
in-network rates with providers for all covered services and items (except
prescription drugs that are subject to a fee-for-service reimbursement
arrangement),
out-of-network allowed amounts and billed charges for covered services and
items during a specific time period, and
negotiated rates and historical net prices for covered prescription drugs.
Plans are currently posting in-network rate and out-of-network allowed amount files. The
Departments intend to develop an implementation timeline for the prescription drug machinereadable file, which had yet to be developed by the date of this report.126
Large-group, small-group, self-insured, and nongroup plans are subject to this requirement.
Author Information
Ryan J. Rosso, Coordinator
Analyst in Health Care Financing
Bernadette Fernandez
Specialist in Health Care Financing
Vanessa C. Forsberg
Analyst in Health Care Financing
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
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copy or otherwise use copyrighted material.
125 42 U.S.C. §300gg-15a and 45 C.F.R. §147.212.
126 DOL, HHS, and Department of the Treasury, “FAQs About Affordable Care Act Implementation Part 61,”
September 27, 2023, at https://www.cms.gov/files/document/faqs-about-affordable-care-act-implementation-part61.pdf.
Congressional Research Service
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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.