November 6, 2008

Agencies Finalize Rules on Maternity Hospital Length of Stay

The IRS, DOL and HHS have issued final rules relating to the federal Newborns’ and Mothers’ Health Protection Act of 1996 (“Newborns’ Act”).  These rules are substantially the same as the interim regulations issued several years ago.  Nevertheless, it is a good time to review plans to ensure compliance. 

The Newborns’ Act requires individual and group health plans, both fully insured and self-funded, to provide coverage for a 48-hour inpatient hospital stay for natural birth (or, 96-hour inpatient stay for cesarean section), unless the health care provider, in consultation with the mother, decide that a shorter length will work.  One of the clarifications in the final regulations relates to defining the term, ‘health care provider’.  The final regulations state that a health care provider, for purposes of determining the length of stay, does not include the insurer or other payor. 

Summary plan descriptions, or other explanatory documents relevant to government entities not subject to ERISA, must explain this benefit to plan participants and beneficiaries.  The final rules include modified model language that can be used.

For insured plans subject to state law, any state law that is more generous than the federal law must be likewise explained; and if the provision of both laws are relevant, this must be explained as well.

These final rules become applicable to individual and group health plans for plan years beginning on or after January 1, 2009.


The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

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