August 13, 2010 

VIA ELECTRONIC MAIL 

Jay Angoff 

Director 

Office of Consumer Information and Insurance Oversight 

Department of Health and Human Services 

Attention: OCIIO-9991-IFC 

P.O. Box 8016 

Baltimore, MD 21244-1850 

REF: OCIIO-9991-IFC 

RE: 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. 

Dear Mr. Angoff: 

Catholic Health Initiatives (CHI) appreciates the opportunity to provide comments regarding rules for 

grandfathered health plan status under the Patient Protection and Affordable Care Act. CHI is a faithbased, mission-driven health system that includes 73 hospitals, 40 long-term care, assisted-living and 

residential units, over 60,000 employees, and two community health service organizations in 18 states. 

CHI is focused on ensuring access to our health care benefit among our employees, particularly lowerwage employees, while also keeping health care costs as affordable and sustainable as possible. This 

priority is highlighted by our efforts in subsidizing coverage for eligible employees through CHI’s 

Health Care Assistance Program, as well as making preventive care free, lowering generic drug 

copays and subsidizing benefits when incurred within our own hospitals and associated facilities. 

To maintain the affordability of CHI’s health plan for CHI and its employees, CHI instituted a number 

of plan design changes in January of 2010. Not only did we invest in some of the benefit 

enhancements outlined above (i.e. free preventive care, lower cost generics, etc.), but we also shifted 

our office visit cost-sharing from a flat dollar copay approach to a percentage-based coinsurance 

approach. This benefit change was done to enhance cost transparency and create a stronger sense of 

consumerism among our members – two critical elements to creating a more sustainable health care 

environment into the future. In fact, due to this change to coinsurance, out-of-pocket costs for our 

employees have actually fallen so far in 2010 for many of our employees compared to 2009. 
However, an unintended consequence of this shift in plan design strategy is the very real possibility 

that CHI may lose its grandfathered status under the Patient Protection and Affordable Care Act 

recently signed into law. Unfortunately, any change to coinsurance (which, as we understand it today, 

is not distinguished between inpatient, outpatient, professional, etc.) results in a loss of grandfathered 

status. 

This is troubling to CHI since we are strongly considering making a small change to our office visit 

coinsurance benefit by increasing the coinsurance for specialist visits in 2011 by 5%. This slight 

change is meant to more closely align 2011 out-of-pocket expenses for members with the flat dollar 

copay structure we previously sponsored. This alteration to our health care design (one of four 

“small” tweaks we are making for 2011 – the other three are benefit enhancements) falls well within 

the “safe harbor” afforded to employers sponsoring a flat dollar copay which allows for an increase in 

copays of $5 plus medical inflation for 2011. 

After extensive analysis, we have found that the median impact to CHI members as a result of the 5% 

increase in specialist coinsurance is roughly $4.50 per visit – well within the context of the flat dollar 

copay “safe harbor.” 

We respectfully ask that consideration be given to distinguishing changes to coinsurance, particularly 

for professional office visits (within similar “safe harbor” limits), in order to allow organizations in 

similar circumstances to CHI to maintain grandfathered status. 

Thank you for allowing us to provide input on this important issue. Please feel free to contact me at 

303-383-2642, or Allan Calonge, Director Health & Welfare Plans, at 859-594-3122, if you would 

like to discuss our comments further. 

Sincerely, 

Herbert J. Vallier 

Senior Vice President & Chief Human Resources Officer 

Catholic Health Initiatives