December 17, 2010 

VIA ELECTRONIC FILING – www.regulations.gov

The Honorable Kathleen Sebelius 

Secretary 

United States Department of Health and Human Services 

200 Independence Avenue SW 

Washington, DC 20201 

The Honorable Hilda L. Solis 

Secretary 

United States Department of Labor 

200 Constitution Ave., NW 

Washington, DC 20210 

The Honorable Timothy F. Geithner 

Secretary 

United States Department of the Treasury 

1500 Pennsylvania Avenue, NW 

Washington, D.C. 20220 

Re: Amendment to Interim Final Rules for Group Health Plans and Health Insurance 

Coverage Relating to Status as a Grandfathered Plan Under the Patient Protection 

and Affordable Care Act, 

HHS File Code OCIIO-9991-IFC2; DOL File No. RIN 1210-AB42; 

IRS File No. REG-118412-10 

Dear Secretaries Sebelius, Solis and Geithner: 

 The Council of Insurance Agents & Brokers (CIAB) appreciates this opportunity to 

provide comments on the Departments’ Amendment to the Interim Final Rule (IFR) relating to 

status as a grandfathered plan under the Patient Protection and Affordable Care Act (PPACA).1

 

As the premier association for commercial insurance and employee benefits intermediaries in the 

United States, CIAB represents leading commercial insurance agencies and brokerage firms, 

with members in over 3,000 locations placing more than $200 billion of U.S. insurance products 

and services, including group health insurance. Our members help employers provide their 

 1

 Amendment to the Interim Final Rules for Group Health Plans and Health Insurance 

Coverage Relating to Status as a Grandfathered Plan Under the Patient Protection and Affordable 

Care Act, 75 Fed. Reg. 70114 (Nov. 17, 2010) (hereafter, “Amended Grandfather IFR”). 

1
employees with the health coverage they need at a cost they can afford, serving tens of thousands

of employer-based health insurance plans covering millions of American workers. As such, our

membership has a thorough understanding of the group health insurance market, and has ha

unique opportunity to observe the c

d a 

hallenges group health plans have faced thus far in the 

PACA implementation process. 

Departments 

s 

er 

es for carriers to offer competitive options for 

group health plans in terms of cost and service. 

to 

rage effective prior to November 15, 2010, 

that plan could not benefit from the rule change. 

. The 

s 

ns 

at the provision allowing plan or policy 

hanges applies retroactively as well as prospectively. 

ate 

amended rule be applied retrospectively as well as prospectively, so that a plan’s decision on 

 

P

 In our comments on the Grandfather IFR,2

 we focused on the need to preserve healthy 

competition among carriers serving grandfathered group health plans, and urged the 

to eliminate the provision in the IFR precluding insured group plans from retaining 

grandfathered status if they simply changed health insurance carriers. We commend the 

Departments for amending the Grandfather IFR to adopt this recommendation, as we believe thi

change will better enable insured plans to shop for the best coverage for their employees rath

than locking them in to particular coverage with a particular carrier. We believe this added 

flexibility will also foster more positive incentiv

Our members are concerned, however, that the benefits of this judicious modification 

the Grandfather IFR will be diminished by the fact that the modification is only prospective, 

applicable to carrier or policy changes that are effective beginning on the date the Amended 

Grandfather IFR was publicly released, November 15, 2010. Thus, if a grandfathered insured 

plan changed carriers or policies with the new cove

The creation of two separate grandfather standards upon this basis is inequitable

inequity is especially acute in situations where carriers withdrew from markets leaving 

employers with no choice but to change carriers in order to maintain coverage for their 

employees (or other situations where employers were effectively compelled to make involuntary 

carrier or policy changes). In such cases, the prospective character of the amended rule leads to 

particularly harsh results by forcing plans to forego the choice of maintaining grandfather statu

because of two factors outside their control – the fact that circumstances required a change in 

carrier or policy, and the timing of the Departments’ decision to modify the rule. Insured plans 

do not regard the decision to forego grandfather status lightly because significant consideratio

must be balanced, not the least of which will be the need to perform the complex, potentially 

costly annual non-discrimination testing now required for non-grandfathered insured plans under 

Public Health Service Act Section 2716 as added by PPACA. We therefore recommend that the 

Departments adjust the Amended Grandfather IFR so th

c

 The CIAB appreciates this opportunity to comment on the Departments’ Amended 

Grandfather IFR. Once again, we commend the Departments for amending the rule to facilit

insured plans’ efforts to obtain the best coverage for their participants, and we urge that the 

2

 Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to 

Status as a Grandfathered Plan Under the Patient Protection and Affordable Care Act, 75 Fed. 

Reg. 34538 (June 17, 2010). 

2
3

whether to forego grandfather status is based on the plan’s considered judgment as to costs 

versus benefits, rather than mere timing. 

 Respectfully submitted, 

 Ken A. Crerar 

 President 

The Council of Insurance Agents & Brokers 

701 Pennsylvania Avenue, NW 

Suite 750 

Washington, DC 20004-2608 

(202) 783-4400 

ken.a.crerar@ciab.com