E7-13039. National Vaccine Injury Compensation Program: Calculation of Average Cost of a Health Insurance Policy

AGENCY:

Health Resources and Services Administration (HRSA), HHS.

ACTION:

Final rule.

SUMMARY:

Subtitle 2 of Title XXI of the Public Health Service Act, as enacted by the National Childhood Vaccine Injury Act of 1986, as amended (the Act), governs the National Vaccine Injury Compensation Program (VICP). The VICP, administered by the Secretary of Health and Human Services (the Secretary), provides that a proceeding for compensation for a vaccine-related injury or death shall be initiated by service upon the Secretary, and the filing of a petition with the United States Court of Federal Claims (the Court). In some cases, the injured individual may receive compensation for future lost earnings, less appropriate taxes and the “average cost of a health insurance policy, as determined by the Secretary.” The final rule establishes the new method of calculating the average cost of a health insurance policy and determines the amount of the average cost of a health insurance policy to be deducted from the compensation award.

DATES:

This regulation is effective August 6, 2007.

FOR FURTHER INFORMATION CONTACT:

Tamara Overby, Chief, Policy Analysis Branch, Division of Vaccine Injury Compensation, Healthcare Systems Bureau, Health Resources and Services Administration (HRSA), Room 11C-26, Parklawn Building, 5600 Fishers Lane, Rockville, Maryland 20857; e-mail: [e-mail]; telephone number: [phone].

SUPPLEMENTARY INFORMATION:

On June 9, 2006, the Secretary published in the Federal Register (71 FR 33420), a Notice of Proposed Rulemaking (NPRM) to revise regulations for the National Vaccine Injury Compensation Program (VICP) to establish a new method of calculating the average cost of a health insurance policy. The public comment period on the NPRM closed on August 8, 2006.

The Secretary received one written comment. The one commenter stated that the proposed rule raises both Federalism and Constitutional issues. The Secretary has considered this comment and notes that section 2115(a)(3)(B) of the Public Health Service Act gives explicit authority to the Secretary to determine the average cost of a health insurance policy.

Based on the new methodology, the amount of a health insurance policy to be deducted from a compensation award for the 12-month period, October 1, 2006—September 30, 2007 is $363.12 per month. In August 2006, Medical Expenditure Panel Survey-Insurance Component (MEPS-IC), available at http://www.meps.ahrq.gov,, published the annual 2004 average total single premium per enrolled employee at private-sector establishments that provide health insurance. The figure published was $3,705. This figure is divided by 12 months to determine the cost per month of $308.75 which is the proposed new baseline figure for 2004. The baseline of $308.75 shall be increased or decreased by the percentage change reported by the most recent “Employer Health Benefits” Annual Survey, Kaiser Family Foundation and Health Research and Educational Trust (KFF/HRET) survey at http://www.kff.org. The percentage increase from 2004-2005 was 9.2 percent. By adding this percentage increase, the calculated average monthly cost of a health insurance policy in 2005 is $337.16. The KFF/HRET reported increase from 2005-2006 was 7.7 percent. By adding this percentage increase to the calculated $337.16 for 2005, the calculated average cost of a health insurance policy in 2006 is $363.12 per month.

Because the KFF/HRET survey is published annually, the Department will periodically (generally on an annual basis) recalculate the average cost of a health insurance policy by obtaining a new baseline from the latest MEPS-IC data and updating this baseline using the percentage change(s) reported by the most recent data from KFF/HRET or other authoritative source that may be more accurate or appropriate in the future. The updated calculation will be published as a notice in the Federal Register and filed with the Court.

Economic and Regulatory Impact

Regulatory Flexibility Act and Executive Order 12866

Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when rulemaking is necessary, to select regulatory approaches that provide the greatest net benefits (including potential economic, environmental, public health, safety distributive and equity effects). In addition, under the Regulatory Flexibility Act of 1980 (RFA), if a rule has a significant economic effect on a substantial number of small entities, the Secretary must specifically consider the economic effect of a rule on small entities and analyze regulatory options that could lessen the impact of the rule.

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget. Executive Order 12866 requires that all regulations reflect consideration of alternatives, of costs, of benefits, of incentives, of equity, and of available information. Regulations must meet certain standards, such as avoiding an unnecessary burden. Regulations that are “significant” because of cost, adverse effects on the economy, inconsistency with other agency actions, effects on the budget, or novel legal or policy issues, require special analysis.

The Secretary has determined that minimal resources, if any, are required to implement the provisions included in this regulation. Therefore, in accordance with the RFA, and the Small Business Regulatory Enforcement Fairness Act of 1996, which amended the RFA, the Secretary certifies that this Final Rule will not affect any entities defined as small under this Act and will not have a significant impact on a substantial number of small entities.

This Final Rule does not meet the criteria for a major rule as defined by Executive Order 12866. The Secretary has determined that this Final Rule is not a “major rule” within the meaning of the statute providing for Congressional Review of Agency Rulemaking, 5 U.S.C. 801. The Secretary conducted a cost analysis comparing the two methodologies using a single claim. This difference was multiplied by the annual average percent of claims compensated that include this calculation (20 percent) in which the award for lost wages is reduced by this more accurate amount, resulting in a slightly larger award. The new methodology is estimated to increase the annual total amount of awards by $50,000. Therefore, the additional cost to the Federal Government will be about $50,000 per year.

The table below compares the average cost of a health insurance policy using MEPS-IC only, KFF/HRET only and the new methodology.

Year	KFF/HRET only	MEPS-IC only	New methodology
2000	$202	$221.22	1 $206.44
2001	221	240.77	2 232.46
2002	255	265.75	3 276.98
2003	282	290.08	4 309.61
2004	308	308.75	5 336.59
2005	335	NA	6 352.25
2006	354	NA	7 363.12
1 1998 MEPS-IC increased by 1999 and 2000 percent changes from KFF/HRET.
2 1999 MEPS-IC increased by 2000 and 2001 percent changes from KFF/HRET.
3 2000 MEPS-IC increased by 2001 and 2002 percent changes from KFF/HRET.
4 2001 MEPS-IC increased by 2002 and 2003 percent changes from KFF/HRET.
5 2002 MEPS-IC increased by 2003 and 2004 percent changes from KFF/HRET.
6 2003 MEPS-IC increased by the 2004 and 2005 percent changes from KFF/HRET.
7 2004 MEPS-IC increased by the 2005 and 2006 percent changes from KFF/HRET.
N/A—Not available due to 2-year lag in reporting data.

The table below shows a comparison of the average cost of a health insurance policy using both methodologies, and the percent change between these methodologies.

Year	Old methodology	New methodology	Percent change (old vs. new)
2000	$276.28	$206.44	−25
2001	294.24	232.46	−21
2002	313.78	276.98	−12
2003	332.60	309.61	−7
2004	353.81	336.59	−5
2005	374.82	352.25	−6
2006	a 397.45	363.12	−9
a Revise this number when September 2006 CPI is published on October 31, 2006.

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.

Unfunded Mandates Reform Act of 1995

The Secretary has determined that this Final Rule will not have effects on State, local, and tribal governments and on the private sector such as to require consultation under the Unfunded Mandates Reform Act of 1995.

Federalism Impact Statement

The Secretary has also reviewed this Final Rule in accordance with Executive Order 13132 regarding federalism, and has determined that it does not have “federalism implications.” The Final Rule would not “have substantial direct effects on the States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

Impact on Family Well-Being

This Final Rule will not adversely affect the following elements of family well-being: family safety, family stability, marital commitment; parental rights in the education, nurture and supervision of their children; family functioning, disposable income or poverty; or the behavior and personal responsibility of youth, as determined under section 654(c) of the Treasury and General Government Appropriations Act of 1999.

Impact of the New Rule

This Final Rule revises § 100.2 to incorporate a new methodology for calculating the average cost of a health insurance policy. This new methodology will result in a more accurate reflection of the actual average cost of a health insurance policy as compared to the old methodology which resulted in a number that was too high.

Paperwork Reduction Act of 1980

This Final Rule has no information collection requirements.

List of Subjects in 42 CFR Part 100

• Biologics
• Compensation
• Health insurance
• Immunizations

Dated: January 28, 2007.

Elizabeth M. Duke,

Administrator, HRSA.

Approved: March 29, 2007.

Michael O. Leavitt,

Secretary.

Editorial Note:

This document was received at the Office of the Federal Register on June 29, 2007.

For the reasons stated above, HHS amends part 100 of 42 CFR as follows:

PART 100—VACCINE INJURY COMPENSATION

1. The authority section for 42 CFR part 100 is revised to read as follows:

Authority: Secs. 312 and 313 of Pub. L. 99-660, 100 Stat. 3779-3782 (42 U.S.C. 300aa-1 note); sec. 2114(c) and (e) of the PHS Act (42 U.S.C. 300aa-14(c) and (e)); sec. 2115(a)(3)(B) of the PHS Act (42 U.S.C. 300aa-15(a)(3)(B)); sec. 904(b) of Pub. L. 105-34, 111 Stat. 873; sec. 1503 of Pub. L. 105-277, 112 Stat. 2681-741; and sec. 523(a) of Pub. L. 106-170, 113 Stat. 1927-1928.

2. Section 100.2 is revised to read as follows:

§ 100.2

Average cost of a health insurance policy.

For purposes of determining the amount of compensation under the VICP, section 2115(a)(3)(B) of the PHS Act, 42 U.S.C. 300aa-15(a)(3)(B), provides that certain individuals are entitled to receive an amount reflecting lost earnings, less certain deductions. One of the deductions is the average cost of a health insurance policy, as determined by the Secretary. The Secretary has determined that the average cost of a health insurance policy is $363.12 for 2006. This figure is calculated periodically (generally on an annual basis) using the most recent Medical Expenditure Panel Survey-Insurance Component (MEPS-IC) data available as the baseline for the average monthly cost of a health insurance policy. This baseline is adjusted by the annual percentage increase/decrease obtained from the most recent annual Kaiser Family Foundation and Health Research and Educational Trust (KFF/HRET) Employer Health Benefits survey or other authoritative source that may be more accurate or appropriate in the future. The revised amount will be effective upon its delivery by the Secretary to the United States Court of Federal Claims, and the amount will be published as a notice in the Federal Register periodically (generally on an annual basis).