Non-Federal Government Exemptions


Reference

A state, municipal or other Non-Federal governmental employer that provides self-insured group health plan coverage to its employees (coverage that is not provided through an insurer) may elect to exempt its plan from certain requirements of Title XXVII of the Public Health Service Act (PHSA). Title XXVII was added to the PHSA by Title I of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and has been amended by several subsequent laws.

The ACA reduced the number of Title XXVII provisions that can be opted out of by sponsors of self-insured, Non-Federal governmental plans.

Exemptions

Non-Federal government employers (such as state, local and municipal government plans) that sponsor self-insured health plans can request an exemption from the following Title XXVII requirement categories.

  1. Newborn’s and Mother’s Health Protection Act (establishing standards related to providing certain benefits for newborns and mothers).
  2. Mental Health Parity and Addictions Equity Act (requiring parity in the application of certain limits to any mental health and substance use disorder benefits provided in a group health plan).
  3. Women’s Health and Cancer Rights Act (requiring coverage for reconstructive surgery following mastectomies).
  4. Michelle’s Law (requiring coverage of dependent students on a medically necessary leave of absence, to the extent that full-time student status is a prerequisite to eligibility. Because of dependent eligibility requirements under the ACA, this now only applies to full-time student criteria limitations for adult children age 26 and older.

Please note that the Non-Federal governmental plan exemption has never been and remains unavailable with respect to the requirements of the Genetic Information Nondiscrimination Act (“GINA”) that are part of the PHSA.

In addition, the PHSA exemption is limited to self-insured plans sponsored by Non-Federal governmental employers; it does not apply to insured plans sponsored by Non-Federal governmental employers or to self-insured plans sponsored by private employers.

Collectively Bargained Plans

Although an opt-out election is generally valid only for the duration of the plan year for which it was made, an opt-out election made pursuant to a collective bargaining agreement remains in effect “for the term of such agreement.” Although only one election is required for all group health plans subject to a collective bargaining agreement, the names of all group health plans covered by the election must be listed in the election document.

Multiple Group Health Plans

Sponsors of multiple group health plans not subject to collective bargaining will have to submit a separate election for each group health plan that wishes to be exempt from any of the four provisions.

Procedures and Requirements for Exemption Election

Initial Exemption

The following procedures and requirements apply with respect to a group health plan sponsor’s election to take advantage of the Non-Federal governmental plan exemption.