New Federal Insur.Law

January 8, 2001

New federal rules legalize insurance discrimination

Motorcyclists and others involved in recreational activities could be left without vital health-care coverage as a result of new regulations released by a group of federal agencies last week, reports the American Motorcyclist Association (AMA). Ironically, the rules, written in response to federal legislation banning health-insurance discrimination, could end up having precisely the opposite effect.

The new regulations, issued jointly by three federal agencies, are the culmination of a rulemaking process that has dragged on for nearly five years since Congress passed the Health Insurance Portability and Accountability Act of 1996. And, the AMA notes, the final version of the regulations appears to directly contradict the will of Congress in passing that law.

The purpose of the original legislation was to protect workers from discrimination in the health insurance they receive through their employers. As written by Congress, the bill would have prohibited employers from denying health coverage based on a worker's pre-existing medical conditions or participation in legal recreational activities. The official language in the Congressional Record from that time noted that the law "is intended to ensure, among other things, that individuals are not excluded from health-care coverage due to their participation in activities such as motorcycling, snowmobiling, all-terrain vehicle riding, horseback riding, skiing and other similar activities."

The AMA worked hard to get that language included in the Congressional Record after uncovering incidents in which employers were discriminating against motorcyclists, leaving them without coverage anytime they were involved in recreational pursuits. The AMA noted that the cases of discrimination it had uncovered extended health-care protection to employees involved in illegal activities, like driving a car while drunk, but cut them off from many legal activities.

Since the passage of the original bill, the AMA has repeatedly called on the federal agencies involved--the Internal Revenue Service, the Pension and Welfare Benefits Administration, and the Health Care Finance Administration--to release the regulations that would govern enforcement of the law. The agencies delayed the process until the closing days of the Clinton administration, finally releasing regulations on Jan. 5.

The new regulations at first state that an employer cannot refuse health-care coverage to an employee on the basis of participation in recreational activities. But they go on to say that health-care benefits can be denied for injuries sustained in connection with those recreational activities.

"To say that an employer can't deny health-care coverage to motorcyclists, but can deny coverage of any injury related to motorcycling makes this entire law meaningless," said Ed Moreland, the AMA's vice president of government relations. "Instead of creating a law specifically ending health-care discrimination, as Congress intended, these agencies have legalized discrimination.

"These rules open the door to the elimination of health coverage for all types of legal recreational activities, from motorcycle riding to running or walking. That's the exact opposite of what Congress had in mind."

The AMA is urging all motorcyclists--and those involved in any other type of recreational activity--to protest these regulations during a public-comment period that remains open through April 9. However, the AMA notes that by the time comments are sent in, the new Bush administration will be taking charge in Washington, meaning that different officials may be in charge at these agencies.

"We believe that the change of administrations in Washington gives us a chance to appeal this arbitrary set of regulations," said Moreland. "We are in a position to ask new administrators to undo the mistakes of their predecessors."

Comments can be sent to the following three agencies. Comments sent by regular mail should include a signed original and three copies. E-mail comments do not require multiple copies.

Internal Revenue Service
P.O. Box 7604, Ben Franklin Station
Washington, DC 20044
www.irs.gov/tax_regs/regslist.html

U.S. Department of Labor
Pension and Welfare Benefits Administration
200 Constitution Ave. NW, Room C-5331
Washington, DC 20210
Attn.: Non-discrimination Comments
e-mail: [email protected]

Health Care Financing Administration
Department of Health and Human Services
Attention: HCFA-2022-IFC
P.O. Box 26688
Baltimore, MD 21207