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Treas. Reg. § 54.9802-1

Prohibiting discrimination against participants and beneficiaries based on a health factor.
CFR 2001 annual edition (revised as of 2001-04-01) · superseded Apr 1, 2002 · last amended by 66 FR 14077, Mar. 9, 2001
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(a) Health factors.
(1) The term health factor means, in relation to an individual, any of the following health status-related factors:
(i) Health status;
(ii) Medical condition (including both physical and mental illnesses);
(iii) Claims experience;
(iv) Receipt of health care;
(v) Medical history;
(vi) Genetic information;
(vii) Evidence of insurability; or
(viii) Disability.
(2) Evidence of insurability includes—
(i) Conditions arising out of acts of domestic violence; and
(ii) [Reserved] For further guidance, see § 54.9802-1T(a)(2)(ii).
(b) Prohibited discrimination in rules for eligibility
(1) In general
(i) A group health plan may not establish any rule for eligibility (including continued eligibility) of any individual to enroll for benefits under the terms of the plan that discriminates based on any health factor that relates to that individual or a dependent of that individual. This rule is subject to the provisions of paragraph (b)(2) of this section (explaining how this rule applies to benefits), paragraph (b)(3) of this section (allowing plans to impose certain preexisting condition exclusions), paragraph (d) of this section (containing rules for establishing groups of similarly situated individuals), paragraph (e) of this section (relating to nonconfinement, actively-at-work, and other service requirements), paragraph (f) of this section (relating to bona fide wellness programs), and paragraph (g) of this section (permitting favorable treatment of individuals with adverse health factors).
(ii) [Reserved] For further guidance, see § 54.9802-1T(b)(1)(ii).
(iii) The rules of this paragraph (b)(1) are illustrated by the following examples:

Example 1.

(i) Facts. An employer sponsors a group health plan that is available to all employees who enroll within the first 30 days of their employment. However, employees who do not enroll within the first 30 days cannot enroll later unless they pass a physical examination.

(ii) Conclusion. In this Example 1, the requirement to pass a physical examination in order to enroll in the plan is a rule for eligibility that discriminates based on one or more health factors and thus violates this paragraph (b)(1).

Example 2.

[Reserved]

(2) Application to benefits
(i) General rule
(A) Under this section, a group health plan is not required to provide coverage for any particular benefit to any group of similarly situated individuals.
(B) [Reserved] For further guidance, see § 54.9802-1T(b)(2)(i)(B).
(C) [Reserved] For further guidance, see § 54.9802-1T(b)(2)(i)(C).
(D) [Reserved] For further guidance, see § 54.9802-1T(b)(2)(i)(D).
(ii) Cost-sharing mechanisms and wellness programs. A group health plan with a cost-sharing mechanism (such as a deductible, copayment, or coinsurance) that requires a higher payment from an individual, based on a health factor of that individual or a dependent of that individual, than for a similarly situated individual under the plan (and thus does not apply uniformly to all similarly situated individuals) does not violate the requirements of this paragraph (b)(2) if the payment differential is based on whether an individual has complied with the requirements of a bona fide wellness program.
(iii) Specific rule relating to source-of-injury exclusions. [Reserved] For further guidance, see § 54.9802-1T(b)(2)(iii).
(3) Relationship to section 9801(a), (b), and (d). [Reserved] For further guidance, see § 54.9802-1T(b)(3).
(c) Prohibited discrimination in premiums or contributions
(1) In general
(i) A group health plan may not require an individual, as a condition of enrollment or continued enrollment under the plan, to pay a premium or contribution that is greater than the premium or contribution for a similarly situated individual (described in paragraph (d) of this section) enrolled in the plan based on any health factor that relates to the individual or a dependent of the individual.
(ii) [Reserved] For further guidance, see § 54.9802-1T(c)(1)(ii).
(2) Rules relating to premium rates
(i) Group rating based on health factors not restricted under this section. Nothing in this section restricts the aggregate amount that an employer may be charged for coverage under a group health plan.
(ii) List billing based on a health factor prohibited. [Reserved] For further guidance, see § 54.9802-1T(c)(2)(ii).
(3) Exception for bona fide wellness programs. Notwithstanding paragraphs (c)(1) and (2) of this section, a plan may establish a premium or contribution differential based on whether an individual has complied with the requirements of a bona fide wellness program.
(d) Similarly situated individuals. [Reserved] For further guidance, see § 54.9802-1T(d).
(e) Nonconfinement and actively-at-work provisions. [Reserved] For further guidance, see § 54.9802-1T(e).
(f) Bona fide wellness programs. [Reserved]
(g) Benign discrimination permitted. [Reserved] For further guidance, see § 54.9802-1T(g).
(h) No effect on other laws. [Reserved] For further guidance, see § 54.9802-1T(h).
(i) Effective dates
(1) Final rules apply May 8, 2001. This section applies May 8, 2001.
(2) Cross-reference to temporary rules applicable for plan years beginning on or after July 1, 2001. See § 54.9802-1T(i)(2), which makes the rules of that section applicable for plan years beginning on or after July 1, 2001.
(3) Cross-reference to temporary transitional rules for individuals previously denied coverage based on a health factor. See § 54.9802-1T(i)(3) for transitional rules that apply with respect to individuals previously denied coverage under a group health plan based on a health factor.

Effective Date Note:

By T.D. 8931, 66 FR 1396, Jan. 8, 2001, § 54.9802-1 was added, effective Mar. 9, 2001. At 66 FR 14076, 14077, Mar. 9, 2001, the effective date was delayed until May 8, 2001 and paragraph (i)(1) was amended by removing the date “March 9, 2001” each place it appears and adding, in its place, “May 8, 2001”.

Source credit, amendments & notes

[T.D. 8931, 66 FR 1396, Jan. 8, 2001, as amended at 66 FR 14077, Mar. 9, 2001]

Treas. Reg. § 54.9802-1 — Prohibiting discrimination against participants and beneficiaries based on a health factor. · CFR 2001 annual edition (revised as of 2001-04-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr26-54.9802-1&asof=2001-04-01 · printed Oct 16, 2026
On this page
  • (a) Health factors.
  • (b) Prohibited discrimination in rules for eligibility
  • (c) Prohibited discrimination in premiums or contributions
  • (d) Similarly situated individuals.
  • (e) Nonconfinement and actively-at-work provisions.
  • (f) Bona fide wellness programs.
  • (g) Benign discrimination permitted.
  • (h) No effect on other laws.
  • (i) Effective dates
Cited by (code & regs)
Guidance addressing this section
IRS / Treasury
Final Rules
Proposed Rules
  • 77 FR 70620Proposed Nov 26, 2012 — Incentives for Nondiscriminatory Wellness Programs in Group Health Plans Comments due Jan 25, 2013 (b)(2)(ii)(d)(f)
Also cited in 14 other documents
Department of Labor (EBSA)
Proposed Rules
  • 91 FR 46602Proposed Jul 23, 2026 — Electronic Disclosure by Group Health Plans Under ERISA Comments due Sep 21, 2026 (f)(3)(v)
  • 83 FR 614Proposed Jan 5, 2018 — Definition of “Employer” Under Section 3(5) of ERISA-Association Health Plans Comments due Mar 6, 2018 (a)(b)(1)(ii)
Final Rules
  • 83 FR 28912 Jun 21, 2018 — Definition of “Employer” Under Section 3(5) of ERISA-Association Health Plans
IRS / Treasury
Final Rules
  • 84 FR 28888 Jun 20, 2019 — Health Reimbursement Arrangements and Other Account-Based Group Health Plans (a)(a)(1)(d)(f)(1)(i)
  • 80 FR 72192 Nov 18, 2015 — Final Rules for Grandfathered Plans, Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, Dependent Coverage, Appeals, and Patient Protec… (d)
  • 80 FR 13995 Mar 18, 2015 — Amendments to Excepted Benefits
  • 79 FR 10296 Feb 24, 2014 — Ninety-Day Waiting Period Limitation and Technical Amendments to Certain Health Coverage Requirements Under the Affordable Care Act (b)(2)(i)(D)(d)
  • 76 FR 37208 Jun 24, 2011 — Group Health Plans and Health Insurance Issuers: Rules Relating to Internal Claims and Appeals and External Review Processes (f)(2)(iv)(A)
  • 75 FR 34538 Jun 17, 2010 — Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Aff… (d)
Proposed Rules
  • 83 FR 54420Proposed Oct 29, 2018 — Health Reimbursement Arrangements and Other Account-Based Group Health Plans Comments due Dec 28, 2018 (a)(d)
  • 79 FR 76931Proposed Dec 23, 2014 — Amendments to Excepted Benefits Comments due Jan 22, 2015
  • 78 FR 77632Proposed Dec 24, 2013 — Amendments to Excepted Benefits Comments due Feb 24, 2014
  • 78 FR 17313Proposed Mar 21, 2013 — Ninety-Day Waiting Period Limitation and Technical Amendments to Certain Health Coverage Requirements Under the Affordable Care Act Comments due May 20, 2013 (d)
Treasury Decisions
  • T.D. 9166 Feb 22, 2005 — Final regulations under section 9801 of the Code provide guidance on the Health Insurance Portability and Accountability Act of 1996 (HIPAA) portability requir… (d)

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Each row is a version of the text as published by the official source. Code dates are the edition/release point that first reflected the change; regulation dates are eCFR effective dates. The library checks the official sources automatically, so new versions appear here on their own; “run” opens the sync that recorded a version.

EffectiveThroughSourceAmended by
Apr 1, 2001Mar 31, 2002CFR 2001 annual edition (revised as of 2001-04-01) run 12766 FR 14077, Mar. 9, 2001View
Apr 1, 2002Mar 31, 2007CFR 2006 annual edition (revised as of 2006-04-01) run 12766 FR 14077, Mar. 9, 2001View · Redline (sign in)
Apr 1, 2007Mar 31, 2010CFR 2008 annual edition (revised as of 2008-04-01) run 12772 FR 7929, Feb. 22, 2007View · Redline (sign in)
Apr 1, 2010Mar 31, 2014CFR 2013 annual edition (revised as of 2013-04-01) run 127T.D. 9464, 74 FR 51678, Oct. 7, 2009View · Redline (sign in)
Apr 1, 2014Mar 31, 2015CFR 2014 annual edition (revised as of 2014-04-01) run 127T.D. 9620, 78 FR 33176, June 3, 2013View · Redline (sign in)
Apr 1, 2015currenteCFR editorial change effective 2016-12-30 run 6T.D. 9656, 79 FR 10305, Feb. 24, 2014View · Redline (sign in)
Provision-level history (blame)