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[Billing Codes: 4120-01-P; 4830-01-P; 4510-29-P] - page 29 / 83





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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.


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