Treas. Reg. § 54.9831-1

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Special rules relating to group health plans.

CFR 2008 annual edition (revised as of 2008-04-01) · superseded Apr 1, 2010 · last amended by T.D. 9299, 71 FR 75057, Dec. 13, 2006

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(a) Group health plan

(1) Defined. A group health plan means a plan (including a self-insured plan) of, or contributed to by, an employer (including a self-employed person) or employee organization to provide health care (directly or otherwise) to the employees, former employees, the employer, others associated or formerly associated with the employer in a business relationship, or their families.

(2) Determination of number of plans. [Reserved]

(b) General exception for certain small group health plans. The requirements of §§ 54.9801-1 through 54.9801-6, 54.9802-1, 54.9802-2, 54.9811-1T, 54.9812-1T, and 54.9833-1 do not apply to any group health plan for any plan year if, on the first day of the plan year, the plan has fewer than two participants who are current employees.

(1) In general. The requirements of §§ 54.9801-1 through 54.9801-6, 54.9802-1, 54.9802-2, 54.9811-1T, 54.9812-1T, and 54.9833-1 do not apply to any group health plan in relation to its provision of the benefits described in paragraph (c)(2), (3), (4), or (5) of this section (or any combination of these benefits).

(2) Benefits excepted in all circumstances. The following benefits are excepted in all circumstances—

(i) Coverage only for accident (including accidental death and dismemberment);

(ii) Disability income coverage;

(iii) Liability insurance, including general liability insurance and automobile liability insurance;

(iv) Coverage issued as a supplement to liability insurance;

(v) Workers' compensation or similar coverage;

(vi) Automobile medical payment insurance;

(vii) Credit-only insurance (for example, mortgage insurance); and

(viii) Coverage for on-site medical clinics.

(3) Limited excepted benefits

(i) In general. Limited-scope dental benefits, limited-scope vision benefits, or long-term care benefits are excepted if they are provided under a separate policy, certificate, or contract of insurance, or are otherwise not an integral part of a group health plan as described in paragraph (c)(3)(ii) of this section. In addition, benefits provided under a health flexible spending arrangement are excepted benefits if they satisfy the requirements of paragraph (c)(3)(v) of this section.

(ii) Not an integral part of a group health plan. For purposes of this paragraph (c)(3), benefits are not an integral part of a group health plan (whether the benefits are provided through the same plan or a separate plan) only if the following two requirements are satisfied—

(A) Participants must have the right to elect not to receive coverage for the benefits; and

(B) If a participant elects to receive coverage for the benefits, the participant must pay an additional premium or contribution for that coverage.

(iii) Limited scope

(A) Dental benefits. Limited scope dental benefits are benefits substantially all of which are for treatment of the mouth (including any organ or structure within the mouth).

(B) Vision benefits. Limited scope vision benefits are benefits substantially all of which are for treatment of the eye.

(iv) Long-term care. Long-term care benefits are benefits that are either—

(A) Subject to State long-term care insurance laws;

(B) For qualified long-term care services, as defined in section 7702B(c)(1), or provided under a qualified long-term care insurance contract, as defined in section 7702B(b); or

(v) Health flexible spending arrangements. Benefits provided under a health flexible spending arrangement (as defined in section 106(c)(2)) are excepted for a class of participants only if they satisfy the following two requirements—

(A) Other group health plan coverage, not limited to excepted benefits, is made available for the year to the class of participants by reason of their employment; and

(B) The arrangement is structured so that the maximum benefit payable to any participant in the class for a year cannot exceed two times the participant's salary reduction election under the arrangement for the year (or, if greater, cannot exceed $500 plus the amount of the participant's salary reduction election). For this purpose, any amount that an employee can elect to receive as taxable income but elects to apply to the health flexible spending arrangement is considered a salary reduction election (regardless of whether the amount is characterized as salary or as a credit under the arrangement).

(4) Noncoordinated benefits

(i) Excepted benefits that are not coordinated. Coverage for only a specified disease or illness (for example, cancer-only policies) or hospital indemnity or other fixed indemnity insurance is excepted only if it meets each of the conditions specified in paragraph (c)(4)(ii) of this section. To be hospital indemnity or other fixed indemnity insurance, the insurance must pay a fixed dollar amount per day (or per other period) of hospitalization or illness (for example, $100/day) regardless of the amount of expenses incurred.

(ii) Conditions. Benefits are described in paragraph (c)(4)(i) of this section only if—

(A) The benefits are provided under a separate policy, certificate, or contract of insurance;

(B) There is no coordination between the provision of the benefits and an exclusion of benefits under any group health plan maintained by the same plan sponsor; and

(C) The benefits are paid with respect to an event without regard to whether benefits are provided with respect to the event under any group health plan maintained by the same plan sponsor.

(iii) Example. The rules of this paragraph (c)(4) are illustrated by the following example:

Example.
(i) Facts. An employer sponsors a group health plan that provides coverage through an insurance policy. The policy provides benefits only for hospital stays at a fixed percentage of hospital expenses up to a maximum of $100 a day.
(ii) Conclusion. In this Example, even though the benefits under the policy satisfy the conditions in paragraph (c)(4)(ii) of this section, because the policy pays a percentage of expenses incurred rather than a fixed dollar amount, the benefits under the policy are not excepted benefits under this paragraph (c)(4). This is the result even if, in practice, the policy pays the maximum of $100 for every day of hospitalization.

(5) Supplemental benefits.

(i) The following benefits are excepted only if they are provided under a separate policy, certificate, or contract of insurance—

(A) Medicare supplemental health insurance (as defined under section 1882(g)(1) of the Social Security Act; also known as Medigap or MedSupp insurance);

(B) Coverage supplemental to the coverage provided under Chapter 55, Title 10 of the United States Code (also known as TRICARE supplemental programs); and

(C) Similar supplemental coverage provided to coverage under a group health plan. To be similar supplemental coverage, the coverage must be specifically designed to fill gaps in primary coverage, such as coinsurance or deductibles. Similar supplemental coverage does not include coverage that becomes secondary or supplemental only under a coordination-of-benefits provision.

(ii) The rules of this paragraph (c)(5) are illustrated by the following example:

Example.
(i) Facts. An employer sponsors a group health plan that provides coverage for both active employees and retirees. The coverage for retirees supplements benefits provided by Medicare, but does not meet the requirements for a supplemental policy under section 1882(g)(1) of the Social Security Act.
(ii) Conclusion. In this Example, the coverage provided to retirees does not meet the definition of supplemental excepted benefits under this paragraph (c)(5) because the coverage is not Medicare supplemental insurance as defined under section 1882(g)(1) of the Social Security Act, is not a TRICARE supplemental program, and is not supplemental to coverage provided under a group health plan.

(d) Treatment of partnerships. For purposes of this part:

(1) Treatment as a group health plan. (See 29 CFR 2590.732(d)(1) and 45 CFR 146.145(d)(1), under which a plan providing medical care, maintained by a partnership, and usually not treated as an employee welfare benefit plan under ERISA is treated as a group health plan for purposes of Part 7 of Subtitle B of Title I of ERISA and Title XXVII of the PHS Act.)

(2) Employment relationship. In the case of a group health plan, the term employer also includes the partnership in relation to any bona fide partner. In addition, the term employee also includes any bona fide partner. Whether or not an individual is a bona fide partner is determined based on all the relevant facts and circumstances, including whether the individual performs services on behalf of the partnership.

(3) Participants of group health plans. In the case of a group health plan, the term participant also includes any individual described in paragraph (d)(3)(i) or (ii) of this section if the individual is, or may become, eligible to receive a benefit under the plan or the individual's beneficiaries may be eligible to receive any such benefit.

(i) In connection with a group health plan maintained by a partnership, the individual is a partner in relation to the partnership.

(ii) In connection with a group health plan maintained by a self-employed individual (under which one or more employees are participants), the individual is the self-employed individual.

(e) Determining the average number of employees. [Reserved]

Source credit, amendments & notes

[T.D. 9166, 69 FR 78746, Dec. 30, 2004; 70 FR 21146, Apr. 25, 2005, as amended by T.D. 9299, 71 FR 75057, Dec. 13, 2006]

Treas. Reg. § 54.9831-1 — Special rules relating to group health plans. · CFR 2008 annual edition (revised as of 2008-04-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr26-54.9831-1&asof=2007-04-01 · printed Oct 16, 2026

Cited by (code & regs)

Treas. Reg. § 54.9812-1 Parity in mental health and substance use disorde…
Treas. Reg. § 54.9801-4 Rules relating to creditable coverage.
Treas. Reg. § 54.9801-2 Definitions.
Treas. Reg. § 54.9825-2T Applicability (temporary).
Treas. Reg. § 54.9816-2T Applicability (temporary).
Treas. Reg. § 54.9801-2T Definitions (temporary).

Guidance addressing this section

IRS / Treasury

Notices

Notice 2026-32 Jun 15, 2026 — This notice provides that a broker-dealer that carries customer accounts and receives or holds funds or securities for those customers may, in lieu of demonstr… (c)(3)(viii)

Proposed Rules

91 FR 27140Proposed May 13, 2026 — Excepted Fertility Benefits Comments due Jul 13, 2026 (c)(3)(ii)(A)(c)(3)(iii)(c)(3)(ix)(B)(c)(3)(ix)(E)(c)(3)(v)(c)(3)(vii)(B)
88 FR 44596Proposed Jul 12, 2023 — Short-Term, Limited-Duration Insurance; Independent, Noncoordinated Excepted Benefits Coverage; Level-Funded Plan Arrangements; and Tax Treatment of Certain Ac… Comments due Sep 11, 2023 (c)(4)(c)(4)(i)(c)(4)(ii)(A)(c)(4)(ii)(B)(c)(4)(ii)(C)(c)(4)(ii)(D)
81 FR 38020Proposed Jun 10, 2016 — Expatriate Health Plans, Expatriate Health Plan Issuers, and Qualified Expatriates; Excepted Benefits; Lifetime and Annual Limits; and Short-Term, Limited-Dura… Comments due Aug 9, 2016 (a)(a)(1)(b)(c)(c)(3)(v)(c)(4)

Revenue Procedures

Rev. Proc. 2021-25 May 24, 2021 — This revenue procedure provides the 2022 inflation adjusted amounts for Health Savings Accounts (HSAs) as determined under § 223 of the Internal Revenue Code a… (c)(3)(viii)(c)(3)(viii)(B)(1)
Rev. Proc. 2020-43 Nov 2, 2020 — This revenue procedure provides the inflation-adjusted maximum dollar amount that may be made newly available for excepted benefit health reimbursement arrange… (c)(3)(c)(3)(viii)(c)(3)(viii)(B)(c)(3)(viii)(B)(1)

Final Rules

79 FR 59130 Oct 1, 2014 — Amendments to Excepted Benefits (c)(3)(v)(c)(4)(c)(5)

Also cited in 33 other documents

IRS / Treasury

Final Rules

89 FR 77586 Sep 23, 2024 — Requirements Related to the Mental Health Parity and Addiction Equity Act (c)(3)(vi)(B)
89 FR 23338 Apr 3, 2024 — Short-Term, Limited-Duration Insurance and Independent, Noncoordinated Excepted Benefits Coverage (c)(4)(c)(4)(ii)(D)(c)(4)(iii)(c)(4)(iv)(c)(5)
86 FR 66662 Nov 23, 2021 — Prescription Drug and Health Care Spending (c)
86 FR 55980 Oct 7, 2021 — Requirements Related to Surprise Billing; Part II (c)
86 FR 36872 Jul 13, 2021 — Requirements Related to Surprise Billing; Part I (a)(c)
85 FR 72158 Nov 12, 2020 — Transparency in Coverage (c)(3)(ii)
84 FR 28888 Jun 20, 2019 — Health Reimbursement Arrangements and Other Account-Based Group Health Plans (c)(3)(v)(c)(3)(v)(A)(c)(3)(vii)(c)(3)(vii)(A)(c)(3)(vii)(B)(c)(3)(vii)(F)
83 FR 38212 Aug 3, 2018 — Short-Term, Limited-Duration Insurance (c)(3)(vii)(c)(5)(i)(C)
81 FR 75316 Oct 31, 2016 — Excepted Benefits; Lifetime and Annual Limits; and Short-Term, Limited-Duration Insurance (c)(3)(v)(c)(5)(i)(C)
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… (c)(3)(v)
80 FR 13995 Mar 18, 2015 — Amendments to Excepted Benefits (c)(3)(c)(3)(v)(c)(4)(c)(5)
79 FR 10296 Feb 24, 2014 — Ninety-Day Waiting Period Limitation and Technical Amendments to Certain Health Coverage Requirements Under the Affordable Care Act
78 FR 68240 Nov 13, 2013 — Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008; Technical Amendment to External Review for Multi-… (b)(c)
77 FR 8668 Feb 14, 2012 — Summary of Benefits and Coverage and Uniform Glossary (c)
75 FR 37188 Jun 28, 2010 — Patient Protection and Affordable Care Act: Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient Protections (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…
75 FR 5410 Feb 2, 2010 — Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (b)

Notices

Notice 2024-35 May 6, 2024 — This notice provides relief with respect to certain required minimum distributions (RMDs) that are not made in 2024. This relief was provided with respect to c… (c)(4)(c)(4)(ii)(D)(c)(4)(iii)(c)(4)(iv)(c)(5)

Proposed Rules

88 FR 51552Proposed Aug 3, 2023 — Requirements Related to the Mental Health Parity and Addiction Equity Act Comments due Oct 2, 2023 (c)(3)(vi)(B)
84 FR 51471Proposed Sep 30, 2019 — Application of the Employer Shared Responsibility Provisions and Certain Nondiscrimination Rules to Health Reimbursement Arrangements and Other Account-Based G… Comments due Dec 30, 2019 (c)(3)(viii)(c)(3)(viii)(A)
83 FR 54420Proposed Oct 29, 2018 — Health Reimbursement Arrangements and Other Account-Based Group Health Plans Comments due Dec 28, 2018 (c)(3)(v)(c)(3)(v)(B)(c)(3)(vii)(c)(3)(vii)(B)(2)
83 FR 7437Proposed Feb 21, 2018 — Short-Term, Limited-Duration Insurance Comments due Apr 23, 2018 (c)(c)(3)(vii)(c)(5)(i)(C)
79 FR 78578Proposed Dec 30, 2014 — Summary of Benefits and Coverage and Uniform Glossary Comments due Mar 2, 2015 (c)
79 FR 76931Proposed Dec 23, 2014 — Amendments to Excepted Benefits Comments due Jan 22, 2015 (c)(3)(v)(c)(4)(c)(5)
78 FR 77632Proposed Dec 24, 2013 — Amendments to Excepted Benefits Comments due Feb 24, 2014 (c)(3)(v)(c)(4)(c)(5)
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
REG-130370-04Proposed Feb 22, 2005 — Proposed regulations under section 9801of the Code would provide guidance on the HIPAA portability requirements relating to interaction with the Family and Med…

Announcements

Ann. 2005-33 May 9, 2005 — This document contains corrections to final regulations (T.D. 9166, 2005-8 I.R.B. 558) under section 9801 of the Code governing portability requirements for gr… (c)(3)(iii)

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… (a)(c)

Department of Labor (EBSA)

Final Rules

89 FR 34106 Apr 30, 2024 — Definition of “Employer”-Association Health Plans (d)(2)

Proposed Rules

88 FR 87968Proposed Dec 20, 2023 — Definition of “Employer”-Association Health Plans Comments due Feb 20, 2024 (d)(2)
83 FR 614Proposed Jan 5, 2018 — Definition of “Employer” Under Section 3(5) of ERISA-Association Health Plans Comments due Mar 6, 2018 (a)

Technical Releases

TR 2013-03 Sep 13, 2013 — Technical Release 2013-03 (c)(c)(3)(v)

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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.

Effective	Through	Source	Amended by
Apr 1, 2005	Mar 31, 2006	CFR 2005 annual edition (revised as of 2005-04-01) run 127	T.D. 9166, 69 FR 78746, Dec. 30, 2004	View
Apr 1, 2006	Mar 31, 2007	CFR 2006 annual edition (revised as of 2006-04-01) run 127	70 FR 21146, Apr. 25, 2005	View · Redline (sign in)
Apr 1, 2007	Mar 31, 2010	CFR 2008 annual edition (revised as of 2008-04-01) run 127	T.D. 9299, 71 FR 75057, Dec. 13, 2006	View · Redline (sign in)
Apr 1, 2010	Mar 31, 2014	CFR 2013 annual edition (revised as of 2013-04-01) run 127	T.D. 9464, 74 FR 51678, Oct. 7, 2009	View · Redline (sign in)
Apr 1, 2014	Mar 31, 2015	CFR 2014 annual edition (revised as of 2014-04-01) run 127	T.D. 9464, 74 FR 51678, Oct. 7, 2009	View · Redline (sign in)
Apr 1, 2015	Mar 31, 2016	CFR 2015 annual edition (revised as of 2015-04-01) run 127	T.D. 9697, 79 FR 59135, Oct. 1, 2014	View · Redline (sign in)
Apr 1, 2016	Dec 29, 2016	CFR 2016 annual edition (revised as of 2016-04-01) run 127	T.D. 9714, 80 FR 14004, Mar. 18, 2015	View · Redline (sign in)
Dec 30, 2016	Jun 19, 2019	eCFR amendment effective 2016-12-30 run 6	T.D. 9791, 81 FR 75324, Oct. 31, 2016	View · Redline (sign in)
Jun 20, 2019	Aug 18, 2019	eCFR amendment effective 2019-06-20 run 6	T.D. 9791, 81 FR 75324, Oct. 31, 2016	View · Redline (sign in)
Aug 19, 2019	Apr 2, 2024	eCFR editorial change effective 2019-08-19 run 6	T.D. 9867, 84 FR 28999, June 20, 2019	View · Redline (sign in)
Apr 3, 2024	Jun 16, 2024	eCFR amendment effective 2024-04-03 run 6	T.D. 9867, 84 FR 28999, June 20, 2019	View · Redline (sign in)
Jun 17, 2024	current	eCFR amendment effective 2024-06-17 run 6	T.D. 9990, 89 FR 23412, Apr. 3, 2024	View · Redline (sign in)

Provision-level history (blame)