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Statement of Need: HIPAA added a new part 7 to title I of ERISA, containing provisions designed to improve the availability and portability of health insurance coverage. Part 7 includes provisions limiting exclusions for preexisting conditions and providing credit for prior coverage, guaranteeing availability of health coverage for small employers, prohibiting discrimination against employees and dependents based on health status, and guaranteeing renewability of health coverage to employers and individuals. Section 702(g)(4), also added by HIPAA, provides that the Secretary shall, consistent with section 104 of HIPAA, first issue by not later than April 1, 1997, such regulations as may be necessary to carry out these provisions.

Alternatives: Regulatory alternatives will be developed once determinations have been made, in conjunction with other concerned agencies, with regard to the scope and nature of the regulatory guidance which will be necessary to carry out the new provisions.

Anticipated Costs and Benefits: Preliminary Estimates of the anticipated costs and benefits of the regulatory actions found to be necessary to implement the new provision will be developed once decisions are reached on which specific actions are necessary.

Risks: Failure to provide regulatory guidance necessary to carry out these important health care reforms would adversely impact the availability and portability of health insurance coverage for American families.