Business Regulatory Enforcement Fairness Act of 1995
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq) requires that, whenever an
agency is required to publish a general notice of proposed rulemaking, the agency shall prepare
and make available for public comment an initial regulatory flexibility analysis. The analysis
describes the impact of the rule on small entities and identifies any significant alternatives to the
rule which accomplish the stated objectives of the applicable law and which would minimize the
impact on small entities. For purposes of the RFA, States and individuals are not considered
small entities. Small employers and small group health plans are considered small entities.
Since these rules are being issued as interim final rules and not as a Notice of Proposed
Rulemaking (NPRM), the RFA does not apply and a regulatory flexibility analysis is not required.
Nonetheless, the Departments have considered the likely impact of the rules on small entities and
believe that the rules will not have a significant impact on a substantial number of small entities for
the following reasons: 1) the major provisions of the rules mirror the statutory provisions, which
are largely self-executing and do not afford the Departments substantial discretion to exercise
regulatory flexibility; 2) the interpretations or clarifications to the statutory provisions that are
made by these rules are minor and will not have a significant impact; and 3) because most States
have laws that apply in place of the NMHPA standards, in those States the interim rules will not
apply to insurance issuers, which are subject to State law, and will have no impact on group
health plans that purchase insurance in those States. Therefore the main impact of these rules will
be on group health plans that self-insure. Because small plans are more likely to purchase State-
regulated insurance than to self-insure, they will be less likely to be affected by these rules.