NU Online News Service, July 1, 5:25 p.m. — Dallas

The new federal health privacy rules could force brokers to change the way they help employers shop for coverage, according to a top federal health policy expert.

When the privacy rules take effect April 14, 2003, brokers will still be able to get and use enough personal health information to help group plan members resolve disputes with carriers, Janet Trautwein, vice president of government affairs at the National Association of Health Underwriters, Arlington, Va., said here at NAHU’s annual convention.

But, if the current interpretation of the rules stands, brokers and employers will no longer be able to get specific information about specific, named employees who have run up large claims, Trautwein warned.

Today, carriers often ask employers applying for coverage to describe which employees have had what conditions, and how much those conditions cost, to make forecasts of future claims as accurate as possible.

After April 2003, if the current interpretation of the health privacy rules prevails, “it’s not going to be that way,” Trautwein predicted.

Carriers would still be able to use personal health information in the underwriting process. But, because of the restrictions on brokers and employers, carriers might have to get personal, confidential medical statements directly from each employee, Trautwein said.

Trautwein suggested the rules could also cause huge headaches for employers that run their own self-funded health plans.

After April 2003, many of those employers will have to hire outside administrators simply to “build a firewall” between themselves and personal employee health information, Trautwein said.

Although managers might know from personal experience which employees incurred which large claims, “you can’t be able to figure that out from what they hand out” to insurers, Trautwein said.

The medical privacy rules are the result of the Health Insurance Portability and Accountability Act of 1996.

One section of the act required Congress to pass a health privacy act, or for the U.S. Department of Health and Human Services to establish a privacy regulation if Congress was unable to pass an act.

Congress was unable to pass an act, and HHS ended up publishing the final version of its rule in the Federal Register, at 65 FR 82462, in December 2000, according to NAHU research materials.

Brokers and employers that would like to know more than the privacy regulation allows should probably stifle the urge, because privacy advocates are looking for an excuse to lobby for much tougher rules, Trautwein said.

The privacy advocates “are just waiting for someone to mess up,” Trautwein said.