For Tax Professionals  
REG-109708-97 October 30, 1998

HIPAA Newborns' & Mothers' Health Protection Act

DEPARTMENT OF THE TREASURY
Internal Revenue Service 26 CFR Part 54 [Reg-109708-97] RIN 1545-
AV12

TITLE: HIPAA Newborns' and Mothers' Health Protection Act

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to
temporary regulations.

SUMMARY: Elsewhere in this issue of the Federal Register, the IRS is
issuing temporary regulations relating to minimum hospital length-
of-stay requirements imposed on group health plans with respect to
mothers and newborns. The hospital length-of-stay requirements were
added to the Internal Revenue Code by section 1531 of the Taxpayer
Relief Act of 1997. The IRS is issuing the temporary regulations at
the same time that the Pension and Welfare Benefits Administration
of the U.S. Department of Labor and the Health Care Financing
Administration of the U.S. Department of Health and Human Services
are issuing substantially similar interim final regulations relating
to hospital length-of-stay requirements added by the Newborns' and
Mothers' Health Protection Act of 1996 to the Employee Retirement
Income Security Act of 1974 and the Public Health Service Act. The
temporary regulations provide guidance to employers and group health
plans relating to the new hospital length-of-stay requirements. The
text of those temporary regulations also serves as the text of these
proposed regulations.

DATES: Written comments and requests for a public hearing must be
received by January 25, 1999.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-109708-97), room
5226, Internal Revenue Service, POB 7604, Ben Franklin Station,
Washington, DC 20044.

Submissions may be hand-delivered to: CC:DOM:CORP:R (REG-109708-97),
room 5226, Internal Revenue Service, 1111 Constitution Avenue, NW.,
Washington, DC.

Alternatively, taxpayers may submit comments electronically via the
Internet by selecting the "Tax Regs" option on the IRS Home Page, or
by submitting comments directly to the IRS Internet site at:
http://www.irs.ustreas.gov/prod/tax_regs/comments.html FOR FURTHER
INFORMATION CONTACT: Russ Weinheimer, (202) 622-4695 (not a toll-
free number).

SUPPLEMENTARY INFORMATION:

Background

The temporary regulations published elsewhere in this issue of the
Federal Register add 54.9811-1T to the Miscellaneous Excise Tax
Regulations. These regulations are being published as part of a
joint rulemaking with the Department of Labor and the Department of
Health and Human Services (the joint rulemaking).

The text of those temporary regulations also serves as the text of
these proposed regulations. The preamble to the temporary
regulations explains the temporary regulations.

Special Analyses

This regulation is not subject to the Unfunded Mandates Reform Act
of 1995 because the regulation is an interpretive regulation. It has
also been determined that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) does not apply to this
regulation, and because the regulation does not impose a collection
of information on small entities, the Regulatory Flexibility Act (5
U.S.C. chapter 6) does not apply. For further information and for
analyses relating to the joint rulemaking, see the preamble to the
joint rulemaking. Pursuant to section 7805(f) of the Internal
Revenue Code, this notice of proposed rulemaking will be submitted
to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.

Comments and Requests for a Public Hearing

Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed
original and eight (8) copies) that are submitted timely to the IRS.
All comments will be available for public inspection and copying. A
public hearing may be scheduled if requested in writing by a person
that timely submits written comments. If a public hearing is
scheduled, notice of the date, time, and place for the hearing will
be published in the Federal Register.

Drafting Information

The principal author of these proposed regulations is Russ
Weinheimer, Office of the Chief Counsel (Employee Benefits and
Exempt Organizations), IRS. However, other personnel from the IRS
and Treasury Department participated in their development. The
proposed regulations, as well as the temporary regulations, have
been developed in coordination with personnel from the U.S.
Department of Labor and the U.S. Department of Health and Human
Services.

List of Subjects in 26 CFR Part 54 Excise taxes, Health insurance,
Pensions, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations Accordingly, 26 CFR part 54
is proposed to be amended as follows:

PART 54--PENSION EXCISE TAXES

Paragraph 1. The authority citation for part 54 is amended by adding
an entry in numerical order to read as follows:

Authority: 26 U.S.C. 7805 * * *

Section 54.9811-1 also issued under 26 U.S.C. 9833. * * *.Par. 2.
Section 54.9811-1 is added to read as follows:

54.9811-1 Standards relating to benefits for mothers and newborns.

[The text of this proposed section is the same as the text of
54.9811-1T published elsewhere in this issue of the Federal
Register].

Deputy Commissioner of Internal Revenue
Michael P. Dolan


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