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GAL PROCESSING DOVER REC UET 2-1 O JUL 1 2 dot

TION &.
RMLIC1I0

PUBLIC Status: Posted
SUBMISSION Comments Due: September 15, 2010

RANCH,

As of: July 12, 2010

Posted: July 12, 2010

Submission Type: Web

Docket: IRS-2010-0010

Group|Health Plans and Health Insurance Coverage Rules Relating to Status as a Grandfathered
Health Plan Under the Patient Protection and Afforable Care Act

Comment On: IRS-2010-0010-0002
Group} Health Plans and Health Insurance Coverage: Status as Grandfathered Health Plan under
the Patient Protection and Affordable Care Act; Cross-Reference

Docu

ment: IRS-2010-0010-0006

Comment on FR Doc # 2010-14487

Submitter Information

Name: Unknown

See al

General Comment

tached file(s)

SS

Attachments

IRS-2010-0010-0006.1: Comment on FR Doc # 2010-14487

https://fdm

s.erulemaking.net/fdms-web-agency/component/submitterInfoCoverPage?Call=..._ 7/12/2010



I have had occasion to study the Interim Final Rules for Group Health plans and Health Insurance
Covernge Relating to Status as a Grandfathered Health Plan Under the Patient Protection and

Affore

sectio

lable Care Act (the “Rules”). I am writing to seek clarification regarding the application of
2718 of the Public Health Service Act (the “PHS Act”) to grandfathered plans that are self

insured. Set out below is a background explanation, the issue, and a suggested response.

1.

By its

issuers.

that a

Background

terms, section 2718 of the PHS Act applies to grandfathered health plans and health insurance
Section 1251(e) of the Patient Protection and Affordable Care Act (“PPACA”) provides
group health plan is a grandfathered health plan with respect to individuals enrolled on M.arch

23, 2010. Section 1301(b)(3) of PPACA defines group health plan by reference to section 2791 (a) of
the PHS Act. Section 2791(a)’s definition of group health plan includes self-insured plans. Thus,
self-insured group health plans are grandfathered health plans to the extent that an individual was

enroll

grand

Altho

d on March 23, 2010. Consequently, it appears that section 2718 of the PHS Act applies to
fathered health plans that are self-insured.

hgh section 2718, by its terms, appears applicable to grandfathered health plans that are self-

insured, a contrary provision of PPACA exempts all self-insured group health plans from

comp!

liance with section 2718. Section 1563(e) of PPACA adds section 715 to the Emp:oyee

Retirement Income Security Act (“ERISA”) and section 9815 to the Internal Revenue Code (the

“Cod
sectio}
plans

?’). Section 715 of ERISA exempts self-insured group health plans from compliance with
h 2718 of the PHS Act. Section 9815 of the Code also exempts self-insured group health
from compliance with section 2718 of the PHS Act. Together, these two sections appear to

exempt all self-insured group health plans from section 2718, including self-insured group health

plans
grand

that are grandfathered health plans, even though section 2718 expressly applies to all
fathered health plans.

PPAGA takes a contradictory position regarding the application of section 2718, and it appears that

the Ri

les do as well. The Rules’ preamble provides that section 2718 of the PHS Act applies to

insured grandfathered health plans. The Rules do not provide a definition of the term insured

grand}
that s|
or aft

fathered health plans. Sections 54.9815-1251T(d) and 2590.715-1251(d) of the Rules provide
ction 2718 of the PHS Act applies to grandfathered health plans for plan years beginning on
¢ September 23, 2010. No exception is provided for self-insured grandfathered health plans.

The Rules appear to take conflicting stances on section 2718; the preamble applies section 2718 to
insured grandfathered health plans only, but sections 54.9815-1251T(d) and 2590.715-1251(d) apply

sectio}
2.
Wheel
3,

Based
grand}

n 2718 to all grandfathered health plans.

Question

her section 2718 of the PHS Act applies to grandfathered health plans that are self-insured.
Suggested Response

on section 715 of ERISA and section 9815 of the Code, section 2718 should not apply to any
fathered health plan that is self-insured. This position should be made clear by amending

sections 54.9815-1251T(d) and 2590.715-1251 (d) of the Rules in the following manner.



(A) Provisions applicable to all grandfathered health plans, The provisions of PHS
Act section 2711 insofar as it relates to lifetime limits, and the provisions of PHS Act
sections 2712, 2714, 2715, and 2718, apply to grandfathered health plans for plan
years beginning on or after September 23, 2010, except that the provisions of PHS
Act section 2718 shall not apply to any grandfathered group health plan that is
self-insured. The provisions of PHS Act section 2708 apply to grandfathered health
plans for plan years beginning on or after January 1, 2014.