Private Health Insurance: Federal Role in Enforcing New Standards Continues to Evolve

In recent years, Congress passed the Health Insurance Portability and Accountability Act (HIPAA) and three subsequent laws that create new federal standards for private health insurance which covers nearly 175 million Americans under the age of 65. These laws include standards guaranteeing access to health insurance for small employers and individuals with existing health conditions as well as requirements for health plans regarding mental health services, hospital care for mothers and newborns following childbirth, and reconstructive surgery following a mastectomy. Since HIPAA's enactment in 1996, federal agencies' enforcement roles have continued to evolve as they have established new or expanded existing enforcement activities to ensure compliance with standards under HIPAA and the related federal laws. Agency officials state that they have enough staff resources and expertise to carry out their current enforcement responsibilities. The Health Care Financing Administration's future role depends on the actions of states in enforcing the federal standards, as well as on congressional decisions about whether to reauthorize the Mental Health Parity Act or to enact additional patient protection legislation. In addition, the scope of the Department of Labor's future enforcement activities may depend on the extent of noncompliance found in its reviews of a nationwide random sample of employer-sponsored health plans. The audit results could cause Labor to refer noncompliant plans to Treasury for the imposition of an excise tax. Thus, although the agencies have been able to carry out their required enforcement roles, the continuing scope and extent of these roles will depend on the actions of employers, carriers, states, and Congress.