70114 Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Rules and Regulations 

VI. What references are on display? 

The following reference has been 

placed on display in the Division of 

Dockets Management (HFA–305), Food 

and Drug Administration, 5630 Fishers 

Lane, Rm. 1061, Rockville, MD 20852, 

and may be seen by interested persons 

between 9 a.m. and 4 p.m., Monday 

through Friday. 

1. Petition from Spiracur, Inc., 

November 3, 2008. 

List of Subjects in 21 CFR Part 878 

Medical devices. 

■ Therefore, under the Federal Food, 

Drug, and Cosmetic Act and under 

authority delegated to the Commissioner 

of Food and Drugs, 21 CFR part 878 is 

amended as follows: 

PART 878—GENERAL AND PLASTIC 

SURGERY DEVICES 

■ 1. The authority citation for 21 CFR 

part 878 continues to read as follows: 

Authority: 21 U.S.C. 351, 360, 360c, 360e, 

360j, 360l, 371. 

■ 2. Section 878.4683 is added to 

subpart E to read as follows: 

§ 878.4683 Non-Powered suction 

apparatus device intended for negative 

pressure wound therapy. 

(a) Identification. A non-powered 

suction apparatus device intended for 

negative pressure wound therapy is a 

device that is indicated for wound 

management via application of negative 

pressure to the wound for removal of 

fluids, including wound exudate, 

irrigation fluids, and infectious 

materials. It is further indicated for 

management of wounds, burns, flaps, 

and grafts. 

(b) Classification. Class II (special 

controls). The special control for this 

device is FDA’s ‘‘Class II Special 

Controls Guidance Document: Nonpowered Suction Apparatus Device 

Intended for Negative Pressure Wound 

Therapy (NPWT).’’ See § 878.1(e) for the 

availability of this guidance document. 

Dated: November 10, 2010. 

Nancy K. Stade, 

Deputy Director for Policy, Center for Devices 

and Radiological Health. 

[FR Doc. 2010–28873 Filed 11–16–10; 8:45 am] 

BILLING CODE 4160–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 54 

[TD 9506] 

RIN 1545–BJ91 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Part 2590 

RIN 1210–AB42 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Office of Consumer Information and 

Insurance Oversight 

45 CFR Part 147 

RIN 0950–AA17 

[OCIIO–9991–IFC2] 

Amendment to the Interim Final Rules 

for Group Health Plans and Health 

Insurance Coverage Relating to Status 

as a Grandfathered Health Plan Under 

the Patient Protection and Affordable 

Care Act 

AGENCY: Internal Revenue Service, 

Department of the Treasury; Employee 

Benefits Security Administration, 

Department of Labor; Office of 

Consumer Information and Insurance 

Oversight, Department of Health and 

Human Services. 

ACTION: Amendment to interim final 

rules with request for comments. 

SUMMARY: This document contains an 

amendment to interim final regulations 

implementing the rules for group health 

plans and health insurance coverage in 

the group and individual markets under 

provisions of the Patient Protection and 

Affordable Care Act regarding status as 

a grandfathered health plan; the 

amendment permits certain changes in 

policies, certificates, or contracts of 

insurance without loss of grandfathered 

status. 

DATES: Effective Date. This amendment 

to the interim final regulations is 

effective on November 15, 2010. 

Comment Date. Comments are due on 

or before December 17, 2010. 

ADDRESSES: Written comments may be 

submitted to any of the addresses 

specified below. Any comment that is 

submitted to any Department will be 

shared with the other Departments. 

Please do not submit duplicates. 

All comments will be made available 

to the public. Warning: Do not include 

any personally identifiable information 

(such as name, address, or other contact 

information) or confidential business 

information that you do not want 

publicly disclosed. All comments may 

be posted on the Internet and can be 

retrieved by most Internet search 

engines. Comments may be submitted 

anonymously. 

Department of Labor. Comments to 

the Department of Labor, identified by 

RIN 1210–AB42, by one of the following 

methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: EOHPSCA1251amend.EBSA@dol.gov. 

• Mail or Hand Delivery: Office of 

Health Plan Standards and Compliance 

Assistance, Employee Benefits Security 

Administration, Room N–5653, U.S. 

Department of Labor, 200 Constitution 

Avenue NW., Washington, DC 20210, 

Attention: RIN 1210–AB42. 

Comments received by the 

Department of Labor will be posted 

without change to http:// 

www.regulations.gov and http:// 

www.dol.gov/ebsa, and available for 

public inspection at the Public 

Disclosure Room, N–1513, Employee 

Benefits Security Administration, 200 

Constitution Avenue, NW., Washington, 

DC 20210. 

Department of Health and Human 

Services. In commenting, please refer to 

file code OCIIO–9991–IFC2. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (please choose only one of the 

ways listed): 

• Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the instructions under the ‘‘More Search 

Options’’ tab. 

• By regular mail. You may mail 

written comments to the following 

address ONLY: Office of Consumer 

Information and Insurance Oversight, 

Department of Health and Human 

Services, Attention: OCIIO–9991–IFC2, 

Room 445–G, Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

• By express or overnight mail. You 

may send written comments to the 

following address only: Office of 

Consumer Information and Insurance 

Oversight, Department of Health and 

Human Services, Attention: OCIIO– 


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Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Rules and Regulations 70115 

1The term ‘‘group health plan’’ is used in title 

XXVII of the PHS Act, part 7 of ERISA, and chapter 

100 of the Code, and is distinct from the term 

‘‘health plan,’’ as used in other provisions of title I 

of the Affordable Care Act. The term ‘‘health plan,’’ 

as used in those provisions, does not include selfinsured group health plans. 

2The subregulatory guidance took the form of 

‘‘frequently asked questions’’ (FAQs). The 

September 20, 2010 FAQs are available at http:// 

www.dol.gov/ebsa/faqs/faq-aca.html and http:// 

www.hhs.gov/ociio/regulations/questions.html. 

3The October 8, 2010 FAQs are available at 

http://www.dol.gov/ebsa/faqs/faq-aca2.html and 

http://www.hhs.gov/ociio/regulations/

implementation_faq.html. 

4The October 12, 2010 FAQs are available at 

http://www.dol.gov/ebsa/faqs/faq-aca3.html and 

http://www.hhs.gov/ociio/regulations/ 

implementation_faq.html. 

5The October 28, 2010 FAQs are available at 

http://www.dol.gov/ebsa/faqs/faq-aca4.html and 

http://www.hhs.gov/ociio/regulations/ 

implementation_faq.html. 

9991–IFC2, Room 445–G, Hubert H. 

Humphrey Building, 200 Independence 

Avenue, SW., Washington, DC 20201. 

• By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments before the close 

of the comment period to the following 

address: Office of Consumer Information 

and Insurance Oversight, Department of 

Health and Human Services, Attention: 

OCIIO–9991–IFC2, Room 445–G, Hubert 

H. Humphrey Building, 200 

Independence Avenue, SW., 

Washington, DC 20201. 

(Because access to the interior of the 

Hubert H. Humphrey Building is not 

readily available to persons without 

Federal government identification, 

commenters are encouraged to leave 

their comments in the OCIIO drop slots 

located in the main lobby of the 

building. A stamp-in clock is available 

for persons wishing to retain a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

Comments mailed to the address 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

Comments received timely will also 

be available for public inspection as 

they are received, generally beginning 

approximately three weeks after 

publication of a document, at the 

headquarters of the Centers for Medicare 

& Medicaid Services, 7500 Security 

Boulevard, Baltimore, Maryland 21244, 

Monday through Friday of each week 

from 8:30 a.m. to 4 p.m. EST. To 

schedule an appointment to view public 

comments, phone 1–800–743–3951. 

Internal Revenue Service. Comments 

to the IRS, identified by REG–118412– 

10, by one of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: CC:PA:LPD:PR (REG–118412– 

10), room 5205, Internal Revenue 

Service, P.O. Box 7604, Ben Franklin 

Station, Washington, DC 20044. 

• Hand or courier delivery: Monday 

through Friday between the hours of 8 

a.m. and 4 p.m. to: CC:PA:LPD:PR 

(REG–118412–10), Courier’s Desk, 

Internal Revenue Service, 1111 

Constitution Avenue, NW., Washington, 

DC 20224. 

All submissions to the IRS will be 

open to public inspection and copying 

in room 1621, 1111 Constitution 

Avenue, NW., Washington, DC from 9 

a.m. to 4 p.m. 

FOR FURTHER INFORMATION CONTACT: 

Amy Turner or Beth Baum, Employee 

Benefits Security Administration, 

Department of Labor, at (202) 693–8335; 

Karen Levin, Internal Revenue Service, 

Department of the Treasury, at (202) 

622–6080; Lisa Campbell, Office of 

Consumer Information and Insurance 

Oversight, Department of Health and 

Human Services, at (301) 492–4100. 

Customer Service Information: 

Individuals interested in obtaining 

information from the Department of 

Labor concerning employment-based 

health coverage laws may call the EBSA 

Toll-Free Hotline at 1–866–444–EBSA 

(3272) or visit the Department of Labor’s 

Web site (http://www.dol.gov/ebsa). In 

addition, information from HHS on 

private health insurance for consumers 

can be found on the Centers for 

Medicare & Medicaid Services (CMS) 

Web site (http://www.cms.hhs.gov/ 

HealthInsReformforConsume/ 

01_Overview.asp) and the Office of 

Consumer Information & Insurance 

Oversight (OCIIO) Web site (http:// 

www.hhs.gov/OCIIO). 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Patient Protection and Affordable 

Care Act (the Affordable Care Act), 

Public Law 111–148, was enacted on 

March 23, 2010; the Health Care and 

Education Reconciliation Act (the 

Reconciliation Act), Public Law 111– 

152, was enacted on March 30, 2010. 

The Affordable Care Act and the 

Reconciliation Act reorganize, amend, 

and add to the provisions in part A of 

title XXVII of the Public Health Service 

Act (PHS Act) relating to group health 

plans and health insurance issuers in 

the group and individual markets. The 

term ‘‘group health plan’’ includes both 

insured and self-insured group health 

plans.1 The Affordable Care Act adds 

section 715(a)(1) to the Employee 

Retirement Income Security Act (ERISA) 

and section 9815(a)(1) to the Internal 

Revenue Code (the Code) to incorporate 

the provisions of part A of title XXVII 

of the PHS Act into ERISA and the 

Code, and make them applicable to 

group health plans, and health 

insurance issuers providing health 

insurance coverage in connection with 

group health plans. The PHS Act 

sections incorporated by this reference 

are sections 2701 through 2728. PHS 

Act sections 2701 through 2719A are 

substantially new, though they 

incorporate some provisions of prior 

law. PHS Act sections 2722 through 

2728 are sections of prior law 

renumbered, with some, mostly minor, 

changes. Section 1251 of the Affordable 

Care Act, as modified by section 10103 

of the Affordable Care Act and section 

2301 of the Reconciliation Act, specifies 

that certain plans or coverage existing as 

of the date of enactment (that is, 

grandfathered health plans) are subject 

to only certain provisions. 

The Departments of Health and 

Human Services, Labor, and the 

Treasury (the Departments) previously 

issued interim final regulations 

implementing section 1251 of the 

Affordable Care Act; these interim final 

regulations were published in the 

Federal Register on June 17, 2010 (75 

FR 34538). Additionally, on September 

20, 2010,2 October 8, 2010,3 October 12, 

2010,4 and October 28, 2010,5 the 

Departments issued subregulatory 

guidance on a number of issues 

pertaining to the implementation of the 

Affordable Care Act, including several 

clarifications relating to the interim 

final regulations on grandfathered 

health plans. 

Section 1251 of the Affordable Care 

Act, as modified by section 10103 of the 

Affordable Care Act and section 2301 of 

the Reconciliation Act, provides that 

certain plans or coverage existing as of 

March 23, 2010 (the date of enactment 

of the Affordable Care Act) are subject 

to only certain provisions of the 

Affordable Care Act. The statute and the 

interim final regulations refer to these 

plans or health insurance coverage as 

grandfathered health plans. The statute 

and the interim final regulations 

provide that a group health plan or 

group or individual health insurance 

coverage is a grandfathered health plan 

with respect to individuals enrolled on 

March 23, 2010 regardless of whether an 

individual later renews the coverage. 

The interim final regulations specify 

certain changes to a plan or coverage 

that would cause it to no longer be a 

grandfathered health plan. 

In addition, the statute and the 

interim final regulations provide that a 

group health plan that provided 

coverage on March 23, 2010 generally is 

also a grandfathered health plan with 


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70116 Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Rules and Regulations 

6 In accordance with statutory provisions relating 

to collectively bargained group health plans, the 

interim final regulations include an exception for a 

group health plan governed by a collective 

bargaining agreement that was in effect on March 

23, 2010. In such a case, the grandfathered group 

health plan is permitted to change issuers, or 

change from a self-insured plan to an insured plan, 

or make a change described under paragraph (g)(1) 

of the interim final regulations (which would 

otherwise end grandfather status) and remain a 

grandfathered health plan for the remainder of the 

duration of the collective bargaining agreement. 

7Of course, with respect to changes to group 

health insurance coverage on or after March 23, 

2010 but before June 14, 2010, the Departments’ 

enforcement safe harbor remains in effect for good 

faith efforts to comply with a reasonable 

interpretation of the statute. 

8As noted below, the Departments are inviting 

comments on this amendment to the interim final 

regulations. 

respect to new employees (whether 

newly hired or newly enrolled) and 

their families that enroll in the 

grandfathered health plan after March 

23, 2010. The interim final regulations 

clarify that, in such cases, any health 

insurance coverage provided under the 

group health plan in which an 

individual was enrolled on March 23, 

2010 is also a grandfathered health plan. 

Paragraph (g)(1) of the interim final 

regulations includes rules for 

determining when changes to the terms 

of a plan or health insurance coverage 

cause the plan or coverage to cease to 

be a grandfathered health plan. In 

addition to the changes described in 

paragraph (g)(1) of the interim final 

regulations that cause a plan to cease to 

be a grandfathered health plan, 

paragraph (a)(1)(ii) of the interim final 

regulations provides that if an employer 

or employee organization enters into a 

new policy, certificate, or contract of 

insurance after March 23, 2010, the 

policy, certificate, or contract of 

insurance is not a grandfathered health 

plan with respect to individuals in the 

group health plan. For example, under 

the interim final regulations, if a group 

health plan changes issuers after March 

23, 2010, the group health plan ceases 

to be a grandfathered health plan, even 

if the plan otherwise would be a 

grandfathered health plan under the 

standards set forth in paragraph (g)(1).6

In contrast, under the interim final 

regulations, a change in third-party 

administrator (TPA) by a self-insured 

group health plan does not cause the 

plan to relinquish grandfather status, 

provided that the change of TPA does 

not result in any other change that 

would cause loss of grandfather status 

under paragraph (g)(1). 

II. Overview of Amendment to the 

Interim Final Regulations 

The Departments have received 

comments on paragraph (a)(1)(ii) of the 

interim final regulations, which 

provides that a group health plan will 

relinquish grandfather status if it 

changes issuers or policies. The 

comments expressed four principal 

concerns about this provision of the 

regulations. First, commenters raised 

the concern that this provision treats 

insured group health plans, which 

cannot change issuers or policies 

without ceasing to be a grandfathered 

health plan, differently from selfinsured group health plans, which can 

change TPAs without relinquishing 

grandfather status, as long as any other 

plan change (such as cost sharing or 

employer contributions) does not 

exceed the standards of paragraph (g)(1) 

of the interim final regulations. Second, 

commenters raised questions about 

circumstances in which a group health 

plan changes its issuer involuntarily (for 

example, the issuer withdraws from the 

market) yet the plan sponsor wants to 

maintain its grandfather status with a 

new issuer. Third, commenters noted 

that the provision would unnecessarily 

restrict the ability of issuers to reissue 

policies to current plan sponsors for 

administrative reasons unrelated to any 

change in the underlying terms of the 

health insurance coverage (for example, 

to transition the policy to a subsidiary 

of the original issuer or to consolidate 

a policy with its various riders or 

amendments) without loss of 

grandfather status. Finally, commenters 

expressed concern that the provision 

terminating grandfather status upon any 

change in issuer gives issuers undue 

and unfair leverage in negotiating the 

price of coverage renewals with the 

sponsors of grandfathered health plans, 

and that this interferes with the health 

care cost containment that tends to 

result from price competition. 

The interim final regulations issued 

on June 17, 2010 were based on an 

interpretation of the language in section 

1251 of the Affordable Care Act 

providing that grandfather status is 

based on ‘‘coverage under a group health 

plan or health insurance coverage in 

which such individual was enrolled on 

the date of the enactment of the Act.’’ In 

adopting the interim final regulations, 

the Departments did not consider a new 

insurance policy issued after March 23, 

2010 to be a grandfathered health plan 

(except for the special rule for a group 

health plan maintained pursuant to a 

collective bargaining agreement) 

because ‘‘coverage’’ under the new 

policy was not in place on that date. 

Following review of the comments 

submitted on this issue and further 

review and consideration of the 

provisions of section 1251 of the 

Affordable Care Act, the Departments 

have determined it is appropriate to 

amend the interim final regulations to 

allow a group health plan to change 

health insurance coverage (that is, to 

allow a group health plan to enter into 

a new policy, certificate, or contract of 

insurance) without ceasing to be a 

grandfathered health plan, provided that 

the plan continues to comply fully with 

the standards set forth in paragraph 

(g)(1). For purposes of section 1251 of 

the Affordable Care Act, the 

Departments now conclude that it is 

reasonable to construe the statutory 

term ‘‘group health plan’’ to apply the 

grandfather provisions uniformly to 

both self-insured and insured group 

health plans (and, consequently, to 

health insurance coverage offered in 

connection with a group health plan). 

Where insured coverage is provided not 

through a group health plan but instead 

in the individual market, a change in 

issuer would still be a change in the 

health insurance coverage in which the 

individual was enrolled on March 23, 

2010, and thus the new individual 

policy, certificate, or contract of 

insurance would not be a grandfathered 

health plan. 

This amendment modifies paragraph 

(a)(1) of the interim final regulations, 

which previously caused a group health 

plan to cease to be a grandfathered 

health plan if the plan entered into a 

new policy, certificate, or contract of 

insurance. The modification provides 

that a group health plan does not cease 

to be grandfathered health plan coverage 

merely because the plan (or its sponsor) 

enters into a new policy, certificate, or 

contract of insurance after March 23, 

2010 7 (for example, a plan enters into 

a contract with a new issuer or a new 

policy is issued with an existing issuer). 

The amendment applies to such changes 

to group health insurance coverage that 

are effective on or after November 15, 

2010, the date the amendment to the 

interim final regulations was made 

available for public inspection; the 

amendment does not apply retroactively 

to such changes to group health 

insurance coverage that were effective 

before this date.8 For this purpose, the 

date the new coverage becomes effective 

is the operative date, not the date a 

contract for a new policy, certificate or 

contract of insurance is entered into. 

Therefore, for example, if a plan enters 

into an agreement with an issuer on 

September 28, 2010 for a new policy to 

be effective on January 1, 2011, then 

January 1, 2011 is the date the new 

policy is effective and, therefore, the 

relevant date for purposes of 

determining the application of the 


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Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Rules and Regulations 70117 

amendment to the interim final 

regulations. If, however, the plan 

entered into an agreement with an 

issuer on July 1, 2010 for a new policy 

to be effective on September 1, 2010, 

then the amendment would not apply 

and the plan would cease to be a 

grandfathered health plan. 

Notwithstanding the ability to change 

health insurance coverage pursuant to 

the modification made by the 

amendment, if the new policy, 

certificate, or contract of insurance 

includes changes described in 

paragraph (g)(1) of the interim final 

regulations, the plan ceases to be a 

grandfathered health plan. In applying 

this amendment, as with other 

provisions of the interim final 

regulations, the rules apply separately to 

each benefit package made available 

under a group health plan. 

The amendment also provides that, to 

maintain status as a grandfathered 

health plan, a group health plan that 

enters into a new policy, certificate, or 

contract of insurance must provide to 

the new health insurance issuer (and the 

new health insurance issuer must 

require) documentation of plan terms 

(including benefits, cost sharing, 

employer contributions, and annual 

limits) under the prior health coverage 

sufficient to determine whether any 

change described in paragraph (g)(1) is 

being made. This documentation may 

include a copy of the policy or summary 

plan description. The amendment also 

makes minor conforming changes to 

other provisions of the interim final 

regulations. 

Thus, a plan can retain its grandfather 

status if it changes its carrier, so long as 

it has not made any other changes that 

would revoke its status. This 

amendment is being issued on an 

interim final basis to notify plans as 

soon as possible of the change and is 

effective prospectively to minimize 

disruption to participants and 

beneficiaries. The Departments are 

continuing to review and evaluate the 

comments received in response to the 

June 17, 2010 interim final regulations. 

In addition, the Departments invite 

comments on this amendment to the 

interim final regulations, including the 

prospective effective date of the rule 

and how that affects plans with different 

plan years. Final regulations on 

grandfathered health plans will be 

published in the near future. 

III. Interim Final Rules and Waiver of 

Delay of Effective Date 

Section 9833 of the Code, section 734 

of ERISA, and section 2792 of the PHS 

Act authorize the Secretaries of the 

Treasury, Labor, and HHS (collectively, 

the Secretaries) to promulgate any 

interim final rules that they determine 

are appropriate to carry out the 

provisions of chapter 100 of the Code, 

part 7 of subtitle B of title I of ERISA, 

and part A of title XXVII of the PHS Act, 

which include PHS Act sections 2701 

through 2728 and the incorporation of 

those sections into ERISA section 715 

and Code section 9815. The rule set 

forth in this amendment governs the 

applicability of the requirements in 

these sections and is therefore 

appropriate to carry them out. 

Therefore, the foregoing interim final 

rule authority applies to this 

amendment. 

In addition, under Section 553(b) of 

the Administrative Procedure Act (APA) 

(5 U.S.C. 551 et seq.) a general notice of 

proposed rulemaking is not required 

when an agency, for good cause, finds 

that notice and public comment thereon 

are impracticable, unnecessary, or 

contrary to the public interest. Although 

the provisions of the APA that 

ordinarily require a notice of proposed 

rulemaking do not apply here because of 

the specific authority granted by section 

9833 of the Code, section 734 of ERISA, 

and section 2792 of the PHS Act, even 

if the APA were applicable, the 

Secretaries have determined that it 

would be impracticable and contrary to 

the public interest to delay putting the 

provisions of this amendment to the 

June 17, 2010 interim final regulations 

in place until an additional public 

notice and comment process was 

completed. 

As noted in the preamble to the June 

17, 2010 interim final regulations, 

numerous provisions of the Affordable 

Care Act are applicable for plan years 

(in the individual market, policy years) 

beginning on or after September 23, 

2010, six months after date of 

enactment. Because grandfathered 

health plans are exempt from many of 

these provisions while group health 

plans and group and individual health 

insurance coverage that are not 

grandfathered health plans must comply 

with them, it was critical for plans and 

issuers to receive clear guidance as to 

whether they were so exempt as soon as 

possible; accordingly, the June 17, 2010 

interim final regulations were published 

without prior notice and comment. 

While the Affordable Care Act 

provisions have become effective with 

respect to certain plans and coverage, 

the majority of plans and coverage have 

not yet become subject to the Act. It is 

critical to provide those plans with the 

guidance in these interim final rules 

immediately. In addition, the provisions 

of this amendment essentially are the 

product of prior notice and comment, as 

they are a logical outgrowth of the June 

17, 2010 interim final regulations which 

provided an opportunity for public 

comment, and are being issued in 

response to public comments received. 

For the foregoing reasons, the 

Departments have determined that it is 

impracticable and contrary to the public 

interest to engage in full notice and 

comment rulemaking before putting 

these regulations into effect, and that it 

is in the public interest to promulgate 

interim final regulations. 

In addition, under Section 553(d) of 

the APA, regulations are to be published 

at least 30 days before they take effect. 

Again, under section 553(d)(3), this 

requirement may be waived ‘‘for good 

cause found and published with the 

rule.’’ For the reasons set forth above, 

the Departments have determined that 

there is good cause for waiver of the 30 

day delay of effective date requirement 

in section 553(d). 

IV. Economic Impact and Paperwork 

Burden 

A. Overview and Need for Regulatory 

Action—Department of Labor and 

Department of Health and Human 

Services 

As stated earlier in this preamble, the 

Departments of Health and Human 

Services, Labor, and the Treasury (the 

Departments) previously issued interim 

final regulations implementing section 

1251 of the Affordable Care Act that 

were published in the Federal Register 

on June 17, 2010 (75 FR 34538). 

Paragraph (a)(1)(ii) of the interim final 

regulations provides that if a group 

health plan changes the issuer providing 

the insured health coverage after March 

23, 2010, the group health plan ceases 

to be a grandfathered health plan. 

Paragraph (g)(1) of the interim final 

regulations includes rules for 

determining when changes to the terms 

of a plan or health insurance coverage 

cause a plan or coverage to cease to be 

a grandfathered health plan. 

As described earlier in this preamble, 

comments expressed a number of 

concerns regarding the change in issuer 

rule. Among other concerns, comments 

stated that the change in issuer rule 

provides issuers with undue leverage in 

negotiating the price of coverage 

renewals with grandfathered health 

plans, because a change in carrier would 

result in plans relinquishing their 

grandfathered status. Therefore, in 

effect, the provision could impede 

employers’ efforts to obtain group health 

insurance coverage for their employees 

at the lowest cost. Commenters also 

expressed concern that the rule creates 

an unlevel playing field for self-insured 


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70118 Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Rules and Regulations 

9The Departments applied the same methodology 

that was used in estimating the hour and cost 

burden associated with the information collection 

requests (ICRs) contained in the interim final 

regulations to make this estimate. 

and fully-insured group health plans, 

because the former could change plan 

administrators without relinquishing 

their grandfathered health plan status, 

while the latter could not change issuers 

without relinquishing such status. 

After reviewing the comments 

concerning this issue and further 

analyzing the statutory provision, the 

Departments have determined that it is 

appropriate to amend the interim final 

regulations to allow group health plans 

to change a health insurance policy or 

issuer providing health insurance 

coverage without ceasing to be a 

grandfathered health plan, provided that 

the standards set forth under paragraph 

(g)(1) of the interim final regulations are 

met. The Departments expect that this 

amendment will result in a small 

increase in the number of plans 

retaining their grandfathered status 

relative to the estimates made in the 

interim final regulations. The 

Departments did not produce a range of 

estimates for the number of affected 

entities given considerable uncertainty 

about the behavioral response to this 

amendment. For a further discussion, 

see Section II. Overview of Amendment 

to the Interim Final Regulations, above. 

B. Executive Order 12866—Department 

of Labor and Department of Health and 

Human Services 

Under Executive Order 12866 (58 FR 

51735), ‘‘significant’’ regulatory actions 

are subject to review by the Office of 

Management and Budget (OMB). 

Section 3(f) of the Executive Order 

defines a ‘‘significant regulatory action’’ 

as an action that is likely to result in a 

rule (1) having an annual effect on the 

economy of $100 million or more in any 

one year, or adversely and materially 

affecting a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

State, local or tribal governments or 

communities (also referred to as 

‘‘economically significant’’); (2) creating 

a serious inconsistency or otherwise 

interfering with an action taken or 

planned by another agency; (3) 

materially altering the budgetary 

impacts of entitlement grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or (4) 

raising novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in the Executive Order. OMB 

has determined that this amendment to 

the interim final regulations is 

significant within the meaning of 

section 3(f)(4) of the Executive Order. 

Accordingly, OMB has reviewed the 

amendment pursuant to the Executive 

Order. 

C. Regulatory Flexibility Act— 

Department of Labor and Department of 

Health and Human Services 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) (RFA) imposes 

certain requirements with respect to 

Federal rules that are subject to the 

notice and comment requirements of 

section 553(b) of the APA (5 U.S.C. 551 

et seq.) and that are likely to have a 

significant economic impact on a 

substantial number of small entities. 

Under Section 553(b) of the APA, a 

general notice of proposed rulemaking 

is not required when an agency, for 

good cause, finds that notice and public 

comment thereon are impracticable, 

unnecessary, or contrary to the public 

interest. The interim final regulations 

were exempt from the APA, because the 

Departments made a good cause finding 

that a general notice of proposed 

rulemaking is not necessary earlier in 

this preamble. Therefore, the RFA did 

not apply and the Departments were not 

required to either certify that the 

regulations or this amendment would 

not have a significant economic impact 

on a substantial number of small entities 

or conduct a regulatory flexibility 

analysis. 

Nevertheless, the Departments 

carefully considered the likely impact of 

the amendment on small entities and 

believe that the amendment will have a 

positive impact on small plans, because 

such plans are more likely to be fullyinsured. The Departments estimated in 

the regulatory impact analysis for the 

interim final regulations that small 

plans were more likely to relinquish 

grandfathered health plan status due to 

changes in issuers or policies than large 

plans. Therefore, this amendment to the 

interim final regulations will benefit 

small plans that want to retain their 

grandfathered health plan status while 

still changing health insurance issuers. 

This change should give employers 

greater flexibility to keep premiums 

affordable for the same plan. 

D. Special Analyses—Department of the 

Treasury 

Notwithstanding the determinations 

of the Department of Labor and 

Department of Health and Human 

Services, for purposes of the Department 

of the Treasury, it has been determined 

that this Treasury decision is not a 

significant regulatory action for 

purposes of Executive Order 12866. 

Therefore, a regulatory assessment is not 

required. It has also been determined 

that section 553(b) of the Administrative 

Procedure Act (5 U.S.C. chapter 5) does 

not apply to these regulations. For the 

applicability of the RFA, refer to the 

Special Analyses section in the 

preamble to the cross-referencing notice 

of proposed rulemaking published 

elsewhere in this issue of the Federal 

Register. Pursuant to section 7805(f) of 

the Code, these temporary regulations 

have been submitted to the Chief 

Counsel for Advocacy of the Small 

Business Administration for comment 

on their impact on small businesses. 

E. Paperwork Reduction Act 

As part of their continuing efforts to 

reduce paperwork and respondent 

burden, the Departments conduct a 

preclearance consultation program to 

provide the general public and Federal 

agencies with an opportunity to 

comment on proposed and continuing 

collections of information in accordance 

with the Paperwork Reduction Act of 

1995 (PRA) (44 U.S.C. 3506(c)(2)(A)). 

This helps to ensure that requested data 

can be provided in the desired format, 

reporting burden (time and financial 

resources) is minimized, and collection 

requirements on respondents can be 

properly assessed. 

As discussed earlier in this preamble, 

the amendment to the interim final 

regulation adds a new disclosure 

requirement that requires the group 

health plan that is changing health 

insurance coverage to provide to the 

succeeding health insurance issuer (and 

the succeeding health insurance issuer 

must require) documentation of plan 

terms (including benefits, cost sharing, 

employer contributions, and annual 

limits) under the prior health insurance 

coverage sufficient to make a 

determination whether the standards of 

paragraph (g)(1) are exceeded. The 

Departments expect that this 

amendment will result in a small 

increase in the number of plans 

retaining their grandfathered status 

relative to the estimates made in the 

interim final regulations. Although the 

Departments did not produce a range of 

estimates for the number of affected 

entities due to the considerable 

uncertainty regarding the behavioral 

response to this amendment, the 

Departments estimate that the new 

disclosure requirement associated with 

the amendment will result in a total 

hour burden of 3,845 hours and a total 

cost burden of $260,000.9 The 

Departments welcome comments on this 

estimate. 

The Office of Management and Budget 

has approved revisions to the ICRs 

contained under OMB Control Numbers 


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Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Rules and Regulations 70119 

1210–0140 (Department of Labor), 

1545–2178 (Department of the Treasury; 

Internal Revenue Service), and 0938– 

1093 (Department of Health and Human 

Services) reflecting this estimate. A 

copy of the ICR may be obtained by 

contacting the PRA addressee: G. 

Christopher Cosby, Office of Policy and 

Research, U.S. Department of Labor, 

Employee Benefits Security 

Administration, 200 Constitution 

Avenue, NW., Room N–5718, 

Washington, DC 20210. Telephone: 

(202) 693–8410; Fax: (202) 219–2745. 

These are not toll-free numbers. E-mail: 

ebsa.opr@dol.gov. ICRs submitted to 

OMB also are available at reginfo.gov 

(http://www.reginfo.gov/public/do/ 

PRAMain). 

F. Congressional Review Act 

This amendment to the interim final 

regulations is subject to the 

Congressional Review Act provisions of 

the Small Business Regulatory 

Enforcement Fairness Act of 1996 (5 

U.S.C. 801 et seq.) and has been 

transmitted to Congress and the 

Comptroller General for review. The 

interim final rule is not a ‘‘major rule’’ 

as that term is defined in 5 U.S.C. 804, 

because it does not result in (1) an 

annual effect on the economy of $100 

million or more; (2) a major increase in 

costs or prices for consumers, 

individual industries, or Federal, State, 

or local government agencies, or 

geographic regions; or (3) significant 

adverse effects on competition, 

employment, investment, productivity, 

innovation, or on the ability of United 

States-based enterprises to compete 

with foreign-based enterprises in 

domestic and export markets. 

G. Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act 

of 1995 (Pub. L. 104–4) requires 

agencies to prepare several analytic 

statements before proposing any rules 

that may result in annual expenditures 

of $100 million (as adjusted for 

inflation) by State, local and tribal 

governments or the private sector. This 

amendment to the interim final 

regulations is not subject to the 

Unfunded Mandates Reform Act, 

because they are being issued as an 

interim final regulation. However, 

consistent with the policy embodied in 

the Unfunded Mandates Reform Act, 

this amendment to the interim final 

regulations has been designed to be the 

least burdensome alternative for State, 

local and tribal governments, and the 

private sector, while achieving the 

objectives of the Affordable Care Act. 

H. Federalism Statement—Department 

of Labor and Department of Health and 

Human Services 

Executive Order 13132 outlines 

fundamental principles of federalism, 

and requires the adherence to specific 

criteria by Federal agencies in the 

process of their formulation and 

implementation of policies that have 

‘‘substantial direct effects’’ on the States, 

the relationship between the national 

government and States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Federal agencies 

promulgating regulations that have 

these federalism implications must 

consult with State and local officials, 

and describe the extent of their 

consultation and the nature of the 

concerns of State and local officials in 

the preamble to the regulation. 

In the Departments’ view, this 

amendment to the regulation has 

federalism implications, because it has 

direct effects on the States, the 

relationship between the national 

government and States, or on the 

distribution of power and 

responsibilities among various levels of 

government. However, in the 

Departments’ view, the federalism 

implications of the regulation is 

substantially mitigated because, with 

respect to health insurance issuers, the 

Departments expect that the majority of 

States will enact laws or take other 

appropriate action resulting in their 

meeting or exceeding the Federal 

standard. 

In general, through section 514, 

ERISA supersedes State laws to the 

extent that they relate to any covered 

employee benefit plan, and preserves 

State laws that regulate insurance, 

banking, or securities. While ERISA 

prohibits States from regulating a plan 

as an insurance or investment company 

or bank, the preemption provisions of 

ERISA section 731 and PHS Act section 

2724 (implemented in 29 CFR 

2590.731(a) and 45 CFR 146.143(a)) 

apply so that the HIPAA requirements 

(including those of the Affordable Care 

Act) are not to be ‘‘construed to 

supersede any provision of State law 

which establishes, implements, or 

continues in effect any standard or 

requirement solely relating to health 

insurance issuers in connection with 

group health insurance coverage except 

to the extent that such standard or 

requirement prevents the application of 

a requirement’’ of a Federal standard. 

The conference report accompanying 

HIPAA indicates that this is intended to 

be the ‘‘narrowest’’ preemption of State 

laws. (See House Conf. Rep. No. 104– 

736, at 205, reprinted in 1996 U.S. Code 

Cong. & Admin. News 2018.) States may 

continue to apply State law 

requirements except to the extent that 

such requirements prevent the 

application of the Affordable Care Act 

requirements that are the subject of this 

rulemaking. State insurance laws that 

are more stringent than the Federal 

requirements are unlikely to ‘‘prevent 

the application of’’ the Affordable Care 

Act, and be preempted. Accordingly, 

States have significant latitude to 

impose requirements on health 

insurance issuers that are more 

restrictive than the Federal law. 

In compliance with the requirement 

of Executive Order 13132 that agencies 

examine closely any policies that may 

have federalism implications or limit 

the policy making discretion of the 

States, the Departments have engaged in 

efforts to consult with and work 

cooperatively with affected State and 

local officials, including attending 

conferences of the National Association 

of Insurance Commissioners and 

consulting with State insurance officials 

on an individual basis. It is expected 

that the Departments will act in a 

similar fashion in enforcing the 

Affordable Care Act requirements. 

Throughout the process of developing 

this amendment, to the extent feasible 

within the specific preemption 

provisions of HIPAA as it applies to the 

Affordable Care Act, the Departments 

have attempted to balance the States’ 

interests in regulating health insurance 

issuers, and Congress’ intent to provide 

uniform minimum protections to 

consumers in every State. By doing so, 

it is the Departments’ view that they 

have complied with the requirements of 

Executive Order 13132. 

Pursuant to the requirements set forth 

in section 8(a) of Executive Order 

13132, and by the signatures affixed to 

these regulations, the Departments 

certify that the Employee Benefits 

Security Administration and the Office 

of Consumer Information and Insurance 

Oversight have complied with the 

requirements of Executive Order 13132 

for the attached amendment to the 

interim final regulations in a meaningful 

and timely manner. 

V. Statutory Authority 

The Department of the Treasury 

temporary regulations are adopted 

pursuant to the authority contained in 

sections 7805 and 9833 of the Code. 

The Department of Labor interim final 

regulations are adopted pursuant to the 

authority contained in 29 U.S.C. 1027, 

1059, 1135, 1161–1168, 1169, 1181– 

1183, 1181 note, 1185, 1185a, 1185b, 

1191, 1191a, 1191b, and 1191c; sec. 


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70120 Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Rules and Regulations 

101(g), Pub. L. 104–191, 110 Stat. 1936; 

sec. 401(b), Pub. L. 105–200, 112 Stat. 

645 (42 U.S.C. 651 note); sec. 512(d), 

Pub. L. 110–343, 122 Stat. 3881; sec. 

1001, 1201, and 1562(e), Pub. L. 111– 

148, 124 Stat. 119, as amended by 

Public Law 111–152, 124 Stat. 1029; 

Secretary of Labor’s Order 6–2009, 74 

FR 21524 (May 7, 2009). 

The Department of Health and Human 

Services interim final regulations are 

adopted pursuant to the authority 

contained in sections 2701 through 

2763, 2791, and 2792 of the PHS Act (42 

U.S.C. 300gg through 300gg–63, 300gg– 

91, and 300gg–92), as amended. 

List of Subjects 

26 CFR Part 54 

Excise taxes, Health care, Health 

insurance, Pensions, Reporting and 

recordkeeping requirements. 

29 CFR Part 2590 

Continuation coverage, Disclosure, 

Employee benefit plans, Group health 

plans, Health care, Health insurance, 

Medical child support, Reporting and 

recordkeeping requirements. 

45 CFR Part 147 

Health care, Health insurance, 

Reporting and recordkeeping 

requirements, and State regulation of 

health insurance. 

Approved: November 8, 2010. 

Steven T. Miller, 

Deputy Commissioner for Services and 

Enforcement, Internal Revenue Service. 

Michael F. Mundaca, 

Assistant Secretary of the Treasury (Tax 

Policy). 

Signed this 5th day of November 2010. 

Phyllis C. Borzi, 

Assistant Secretary, Employee Benefits 

Security Administration, Department of 

Labor. 

Approved: November 9, 2010. 

Jay Angoff, 

Director, Office of Consumer Information and 

Insurance Oversight. 

Approved: November 9, 2010. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

Department of the Treasury 

Internal Revenue Service 

26 CFR Chapter I 

■ Accordingly, 26 CFR part 54 is 

amended as follows: 

PART 54—PENSION EXCISE TAXES 

■ Paragraph 1. The authority citation 

for part 54 continues to read in part as 

follows: 

Authority: 26 U.S.C. 7805. * * * 

■ Par. 2. Section 54.9815–1251T is 

amended by: 

■ 1. Revising paragraph (a)(1). 

■ 2. Redesignating paragraphs (a)(3) 

introductory text, (a)(3)(i), and (a)(3)(ii) 

as paragraphs (a)(3)(i), (a)(3)(i)(A) and 

(a)(3)(i)(B), respectively. 

■ 3. Adding new paragraph (a)(3)(ii). 

■ 4. Removing paragraphs (a)(5) and 

(f)(2). 

■ 5. Redesignating paragraph (f)(1) as 

paragraph (f). 

■ 6. Revising the last sentence in newlydesignated paragraph (f). 

■ 7. Revising paragraph (g)(4) Example 

9. 

The revisions and addition reads as 

follows: 

§ 54.9815–1251T Preservation of right to 

maintain existing coverage (temporary). 

(a) Definition of grandfathered health 

plan coverage—(1) In general—(i) 

Grandfathered health plan coverage. 

Grandfathered health plan coverage 

means coverage provided by a group 

health plan, or a health insurance 

issuer, in which an individual was 

enrolled on March 23, 2010 (for as long 

as it maintains that status under the 

rules of this section). A group health 

plan or group health insurance coverage 

does not cease to be grandfathered 

health plan coverage merely because 

one or more (or even all) individuals 

enrolled on March 23, 2010 cease to be 

covered, provided that the plan has 

continuously covered someone since 

March 23, 2010 (not necessarily the 

same person, but at all times at least one 

person). In addition, subject to the 

limitation set forth in paragraph 

(a)(1)(ii) of this section, a group health 

plan (and any health insurance coverage 

offered in connection with the group 

health plan) does not cease to be a 

grandfathered health plan merely 

because the plan (or its sponsor) enters 

into a new policy, certificate, or contract 

of insurance after March 23, 2010 (for 

example, a plan enters into a contract 

with a new issuer or a new policy is 

issued with an existing issuer). For 

purposes of this section, a plan or health 

insurance coverage that provides 

grandfathered health plan coverage is 

referred to as a grandfathered health 

plan. The rules of this section apply 

separately to each benefit package made 

available under a group health plan or 

health insurance coverage. 

(ii) Changes in group health insurance 

coverage. Subject to paragraphs (f) and 

(g)(2) of this section, if a group health 

plan (including a group health plan that 

was self-insured on March 23, 2010) or 

its sponsor enters into a new policy, 

certificate, or contract of insurance after 

March 23, 2010 that is effective before 

November 15, 2010, then the plan 

ceases to be a grandfathered health plan. 

* * * * * 

(3)(i) * * * 

(ii) Change in group health insurance 

coverage. To maintain status as a 

grandfathered health plan, a group 

health plan that enters into a new 

policy, certificate, or contract of 

insurance must provide to the new 

health insurance issuer (and the new 

health insurance issuer must require) 

documentation of plan terms (including 

benefits, cost sharing, employer 

contributions, and annual limits) under 

the prior health coverage sufficient to 

determine whether a change causing a 

cessation of grandfathered health plan 

status under paragraph (g)(1) of this 

section has occurred. 

* * * * * 

(f) * * * After the date on which the 

last of the collective bargaining 

agreements relating to the coverage that 

was in effect on March 23, 2010 

terminates, the determination of 

whether health insurance coverage 

maintained pursuant to a collective 

bargaining agreement is grandfathered 

health plan coverage is made under the 

rules of this section other than this 

paragraph (f) (comparing the terms of 

the health insurance coverage after the 

date the last collective bargaining 

agreement terminates with the terms of 

the health insurance coverage that were 

in effect on March 23, 2010). 

(g) * * * 

(4) * * * 

Example 9. (i) Facts. A group health plan 

not maintained pursuant to a collective 

bargaining agreement offers three benefit 

packages on March 23, 2010. Option F is a 

self-insured option. Options G and H are 

insured options. Beginning July 1, 2013, the 

plan increases coinsurance under Option H 

from 10% to 15%. 

(ii) Conclusion. In this Example 9, the 

coverage under Option H is not 

grandfathered health plan coverage as of July 

1, 2013, consistent with the rule in paragraph 

(g)(1)(ii) of this section. Whether the coverage 

under Options F and G is grandfathered 

health plan coverage is determined 

separately under the rules of this paragraph 

(g). 

Department of Labor 

Employee Benefits Security 

Administration 

29 CFR Chapter XXV 

■ 29 CFR part 2590 is amended as 

follows: 


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PART 2590—RULES AND 

REGULATIONS FOR GROUP HEALTH 

PLANS 

■ 1. The authority citation for part 2590 

continues to read as follows: 

Authority: 29 U.S.C. 1027, 1059, 1135, 

1161–1168, 1169, 1181–1183, 1181 note, 

1185, 1185a, 1185b, 1191, 1191a, 1191b, and 

1191c; sec. 101(g), Pub. L.104–191, 110 Stat. 

1936; sec. 401(b), Pub. L. 105–200, 112 Stat. 

645 (42 U.S.C. 651 note); sec. 512(d), Pub. L. 

110–343, 122 Stat. 3881; sec. 1001, 1201, and 

1562(e), Pub. L. 111–148, 124 Stat. 119, as 

amended by Pub. L. 111–152, 124 Stat. 1029; 

Secretary of Labor’s Order 6–2009, 74 FR 

21524 (May 7, 2009). 

■ 2. Section 2590.715–1251 is amended 

by: 

■ 1. Revising paragraph (a)(1). 

■ 2. Redesignating paragraphs (a)(3), 

(a)(3)(i) and (a)(3)(ii) as paragraphs 

(a)(3)(i), (a)(3)(i)(A) and (a)(3)(i)(B), 

respectively. 

■ 3. Adding new paragraph (a)(3)(ii). 

■ 4. Removing paragraphs (a)(5) and 

(f)(2). 

■ 5. Redesignating paragraph (f)(1) as 

paragraph (f). 

■ 6. Revising the last sentence in newlydesignated paragraph (f). 

■ 7. Revising paragraph (g)(4) Example 

9. 

The revisions and addition reads as 

follows: 

§ 2590.715–1251 Preservation of right to 

maintain existing coverage. 

(a) Definition of grandfathered health 

plan coverage—(1) In general—(i) 

Grandfathered health plan coverage. 

Grandfathered health plan coverage 

means coverage provided by a group 

health plan, or a health insurance 

issuer, in which an individual was 

enrolled on March 23, 2010 (for as long 

as it maintains that status under the 

rules of this section). A group health 

plan or group health insurance coverage 

does not cease to be grandfathered 

health plan coverage merely because 

one or more (or even all) individuals 

enrolled on March 23, 2010 cease to be 

covered, provided that the plan has 

continuously covered someone since 

March 23, 2010 (not necessarily the 

same person, but at all times at least one 

person). In addition, subject to the 

limitation set forth in paragraph 

(a)(1)(ii) of this section, a group health 

plan (and any health insurance coverage 

offered in connection with the group 

health plan) does not cease to be a 

grandfathered health plan merely 

because the plan (or its sponsor) enters 

into a new policy, certificate, or contract 

of insurance after March 23, 2010 (for 

example, a plan enters into a contract 

with a new issuer or a new policy is 

issued with an existing issuer). For 

purposes of this section, a plan or health 

insurance coverage that provides 

grandfathered health plan coverage is 

referred to as a grandfathered health 

plan. The rules of this section apply 

separately to each benefit package made 

available under a group health plan or 

health insurance coverage. 

(ii) Changes in group health insurance 

coverage. Subject to paragraphs (f) and 

(g)(2) of this section, if a group health 

plan (including a group health plan that 

was self-insured on March 23, 2010) or 

its sponsor enters into a new policy, 

certificate, or contract of insurance after 

March 23, 2010 that is effective before 

November 15, 2010, then the plan 

ceases to be a grandfathered health plan. 

* * * * * 

(3)(i) * * * 

(ii) Change in group health insurance 

coverage. To maintain status as a 

grandfathered health plan, a group 

health plan that enters into a new 

policy, certificate, or contract of 

insurance must provide to the new 

health insurance issuer (and the new 

health insurance issuer must require) 

documentation of plan terms (including 

benefits, cost sharing, employer 

contributions, and annual limits) under 

the prior health coverage sufficient to 

determine whether a change causing a 

cessation of grandfathered health plan 

status under paragraph (g)(1) of this 

section has occurred. 

* * * * * 

(f) * * * After the date on which the 

last of the collective bargaining 

agreements relating to the coverage that 

was in effect on March 23, 2010 

terminates, the determination of 

whether health insurance coverage 

maintained pursuant to a collective 

bargaining agreement is grandfathered 

health plan coverage is made under the 

rules of this section other than this 

paragraph (f) (comparing the terms of 

the health insurance coverage after the 

date the last collective bargaining 

agreement terminates with the terms of 

the health insurance coverage that were 

in effect on March 23, 2010). 

(g) * * * 

(4) * * * 

Example 9. (i) Facts. A group health plan 

not maintained pursuant to a collective 

bargaining agreement offers three benefit 

packages on March 23, 2010. Option F is a 

self-insured option. Options G and H are 

insured options. Beginning July 1, 2013, the 

plan increases coinsurance under Option H 

from 10% to 15%. 

(ii) Conclusion. In this Example 9, the 

coverage under Option H is not 

grandfathered health plan coverage as of July 

1, 2013, consistent with the rule in paragraph 

(g)(1)(ii) of this section. Whether the coverage 

under Options F and G is grandfathered 

health plan coverage is determined 

separately under the rules of this paragraph 

(g). 

Department of Health and Human 

Services 

45 CFR Chapter I 

■ Accordingly, 45 CFR part 147 is 

amended as follows: 

PART 147—HEALTH INSURANCE 

REFORM REQUIREMENTS FOR THE 

GROUP AND INDIVIDUAL HEALTH 

INSURANCE MARKETS 

■ 1. The authority citation for part 147 

continues to read as follows: 

Authority: Secs. 2701 through 2763, 2791, 

and 2792 of the Public Health Service Act (42 

U.S.C. 300gg through 300gg–63, 300gg–91, 

and 300gg–92), as amended. 

■ 2. Section 147.140 is amended by: 

■ 1. Revising paragraph (a)(1). 

■ 2. Redesignating paragraphs (a)(3), 

(a)(3)(i) and (a)(3)(ii) as paragraphs 

(a)(3)(i), (a)(3)(i)(A) and (a)(3)(i)(B), 

respectively. 

■ 3. Adding new paragraph (a)(3)(ii). 

■ 4. Removing paragraphs (a)(5) and 

(f)(2). 

■ 5. Redesignating paragraph (f)(1) as 

paragraph (f). 

■ 6. Revising the last sentence in newlydesignated paragraph (f). 

■ 7. Revising paragraph (g)(4) Example 

9. 

The revisions and addition reads as 

follows: 

§ 147.140 Preservation of right to maintain 

existing coverage. 

(a) Definition of grandfathered health 

plan coverage—(1) In general—(i) 

Grandfathered health plan coverage. 

Grandfathered health plan coverage 

means coverage provided by a group 

health plan, or a group or individual 

health insurance issuer, in which an 

individual was enrolled on March 23, 

2010 (for as long as it maintains that 

status under the rules of this section). A 

group health plan or group health 

insurance coverage does not cease to be 

grandfathered health plan coverage 

merely because one or more (or even all) 

individuals enrolled on March 23, 2010 

cease to be covered, provided that the 

plan has continuously covered someone 

since March 23, 2010 (not necessarily 

the same person, but at all times at least 

one person). In addition, subject to the 

limitation set forth in paragraph 

(a)(1)(ii) of this section, a group health 

plan (and any health insurance coverage 

offered in connection with the group 

health plan) does not cease to be a 

grandfathered health plan merely 

because the plan (or its sponsor) enters 

into a new policy, certificate, or contract 

of insurance after March 23, 2010 (for 


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70122 Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Rules and Regulations 

example, a plan enters into a contract 

with a new issuer or a new policy is 

issued with an existing issuer). For 

purposes of this section, a plan or health 

insurance coverage that provides 

grandfathered health plan coverage is 

referred to as a grandfathered health 

plan. The rules of this section apply 

separately to each benefit package made 

available under a group health plan or 

health insurance coverage. 

(ii) Changes in group health insurance 

coverage. Subject to paragraphs (f) and 

(g)(2) of this section, if a group health 

plan (including a group health plan that 

was self-insured on March 23, 2010) or 

its sponsor enters into a new policy, 

certificate, or contract of insurance after 

March 23, 2010 that is effective before 

November 15, 2010, then the plan 

ceases to be a grandfathered health plan. 

* * * * * 

(3)(i) * * * 

(ii) Change in group health insurance 

coverage. To maintain status as a 

grandfathered health plan, a group 

health plan that enters into a new 

policy, certificate, or contract of 

insurance must provide to the new 

health insurance issuer (and the new 

health insurance issuer must require) 

documentation of plan terms (including 

benefits, cost sharing, employer 

contributions, and annual limits) under 

the prior health coverage sufficient to 

determine whether a change causing a 

cessation of grandfathered health plan 

status under paragraph (g)(1) of this 

section has occurred. 

* * * * * 

(f) * * * After the date on which the 

last of the collective bargaining 

agreements relating to the coverage that 

was in effect on March 23, 2010 

terminates, the determination of 

whether health insurance coverage 

maintained pursuant to a collective 

bargaining agreement is grandfathered 

health plan coverage is made under the 

rules of this section other than this 

paragraph (f) (comparing the terms of 

the health insurance coverage after the 

date the last collective bargaining 

agreement terminates with the terms of 

the health insurance coverage that were 

in effect on March 23, 2010). 

(g) * * * 

(4) * * * 

Example 9. (i) Facts. A group health plan 

not maintained pursuant to a collective 

bargaining agreement offers three benefit 

packages on March 23, 2010. Option F is a 

self-insured option. Options G and H are 

insured options. Beginning July 1, 2013, the 

plan increases coinsurance under Option H 

from 10% to 15%. 

(ii) Conclusion. In this Example 9, the 

coverage under Option H is not 

grandfathered health plan coverage as of July 

1, 2013, consistent with the rule in paragraph 

(g)(1)(ii) of this section. Whether the coverage 

under Options F and G is grandfathered 

health plan coverage is determined 

separately under the rules of this paragraph 

(g). 

[FR Doc. 2010–28861 Filed 11–15–10; 4:15 pm] 

BILLING CODE 4830–01–4510–29–4120–01–P 

DEPARTMENT OF JUSTICE 

Office of the Attorney General 

28 CFR Part 0 

[AG Order No. 3229–2010] 

Office of Tribal Justice 

AGENCY: Department of Justice. 

ACTION: Final rule. 

SUMMARY: This rule will amend part 0 of 

title 28 of the Code of Federal 

Regulations to reflect the establishment 

of the Office of Tribal Justice as a 

distinct component of the Department of 

Justice. The Office of Tribal Justice was 

created by the Attorney General to 

provide a channel for Tribes to 

communicate their concerns to the 

Department, to help coordinate policy 

on Indian affairs both within the 

Department and with other Federal 

agencies, and to ensure that the 

Department and its components work 

with Tribes on a government-togovernment basis. This rule, which sets 

forth the Office’s organization, mission 

and functions, amends the Code of 

Federal Regulations in order to reflect 

accurately the Department’s internal 

management structure. 

DATES: Effective Date: November 17, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

Tracy Toulou, Director, Office of Tribal 

Justice, U.S. Department of Justice, RFK 

Main Justice Building, Room 2318, 950 

Pennsylvania Avenue, NW., 

Washington, DC 20530. Telephone: 

(202) 514–8812. 

SUPPLEMENTARY INFORMATION: 

Background 

In 1995 the Attorney General 

established the Office of Tribal Justice 

(OTJ) to provide a principal point of 

contact within the Department of Justice 

to listen to the concerns of Indian tribes 

and other parties interested in Indian 

affairs and to communicate the 

Department’s policies to the Tribes and 

the public; to promote internal 

uniformity of Department of Justice 

policies and litigation positions relating 

to Indian country; and to coordinate 

with other Federal agencies and with 

State and local governments on their 

initiatives in Indian country. On 

November 5, 2009, the President 

directed all Federal agencies to develop 

a consultation and coordination policy 

that ensures effective communication 

with Tribes. The Director of OTJ, in 

consultation with Tribes and with other 

Department components, developed the 

Department’s comprehensive plan in 

response to the President’s directive, 

and is designated as the Department 

official responsible for following 

through on the plan and reporting 

requirements associated with the 

President’s directive. The Director of 

OTJ also is the Department official 

responsible for certifying to the Office of 

Management and Budget that the 

requirements of Executive Order 13175, 

Consultation and Coordination with 

Indian Tribal Governments, have been 

met with regard to any regulation or 

legislation proposed by the Department. 

On July 29, 2010, President Obama 

signed into law the Tribal Law and 

Order Act of 2010, Public Law 111–211. 

Section 214 of the Tribal Law and Order 

Act amends title I of the Indian Tribal 

Justice Technical and Legal Assistance 

Act of 2000, to provide that ‘‘[n]ot later 

than 90 days after the date of enactment 

of the Tribal Law and Order Act of 2010, 

the Attorney General shall establish the 

Office of Tribal Justice as a component 

of the Department.’’ This rule 

implements fully that statutory 

directive. 

Administrative Procedure Act 5 U.S.C. 

553 

This rule is a rule of agency 

organization and procedure, and relates 

to the internal management of the 

Department of Justice. It is therefore 

exempt from the requirements of notice 

and comment and a delayed effective 

date. 5 U.S.C. 553(b), (d). 

Regulatory Flexibility Act 

The Attorney General, in accordance 

with the Regulatory Flexibility Act (5 

U.S.C. 605(b)), has reviewed this rule 

and by approving it certifies that this 

rule will not have a significant 

economic impact on a substantial 

number of small entities because it 

pertains to personnel and administrative 

matters affecting the Department. 

Further, a Regulatory Flexibility 

Analysis was not required to be 

prepared for this final rule since the 

Department was not required to publish 

a general notice of proposed rulemaking 

for this matter. 

Executive Order 12866 

This action has been drafted and 

reviewed in accordance with Executive 


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