From: Anne Lennan

To: EBSA, E-OHPSCA - EBSA

Subject: RIN 1210-AB41

Date: Wednesday, August 11, 2010 8:52:51 PM

August 11, 2010

Office of Health Plan Standards and Compliance Assistance

EBSA

Room N-5653

Department of Labor

200 Constitution Avenue, NW

Washington, DC 20210

ATTN: RIN 1210-AB41

These comments and requests for clarifications on the interim final rules for group health

plans and health insurance issuers relating to dependent coverage of children to age 26

under the Patient Protection and Affordable Care Act are submitted on behalf of the

Society of Professional Benefit Administrators (SPBA).

SPBA is the national association of Third Party Administration (TPA) firms that are hired

by employers and employee benefit plans to provide outside professional management of

their employee benefit plans. It is estimated that 55% of US workers in non-federal health

coverage are in plans administered by some form of TPA. The clients of TPA firms include

every size and format of employment, including large and small employers,

state/county/city plans, union, non-union, collectively bargained multiemployer plans, as

well as plans representing religious entities.

In General

According to the interim final rule, a group health plan that makes available dependent

coverage of children must make such coverage available for children until attainment of 26

years of age. May a plan exclude children serving in the armed forces under age 26?

Many group health plans have a requirement that a dependent is a resident of the same

country in which the participant resides. For example, some employees have large families

in Mexico where the dependents are not US citizens. May plans retain US residency as a

condition of dependent eligibility. Or, may plans redefine child to include dependents who

are US residents?

May a plan document continue to exclude stepchildren where the employee or spouse

does not have financial responsibility?

If a newly eligible dependent is totally disabled, and an eligibility provision of the plan

allows coverage for totally disabled individuals beyond the limiting age, must the plan allow

this new individual to stay on the plan once they reach the age of 26? In essence, if

continued coverage for the disabled individual rests solely on the limiting age of the plan,

must the new limiting age of 26 be the age used in determining whether someone was

totally disabled?

The standard meaning of placed for adoption involves a childs financial dependency on the

employee. May financial dependency still be used as an eligibility threshold in the case of

children who are placed for adoption?

Coverage of Grandchildren Not Required
If a group health plan voluntarily decides to cover grandchildren, may the plan impose

eligibility thresholds that are prohibited for other children (i.e., age requirements, financial

dependency, residency, etc.)? May the benefits for grandchildren be less than the benefits

for other children?

Transitional Rules

Under the transitional rules for individuals whose coverage ended by reason of reaching a

dependent eligibility threshold, a group plan is required to give a qualifying child an

opportunity to enroll. The interim final rules anticipate that this enrollment opportunity will

only apply to children who are young adults. Children under the age of 18 may have lost

coverage or were denied coverage because they no longer satisfied a condition under the

plan, such as residency, etc.

We request the agencies to clarify in future guidance whether or not the transitional rules

apply to non-adult children. Is there any time limit on how far back a plan must offer the

opportunity to enroll? What if a dependent lost eligibility status eight years ago or more?

Any child enrolling in a group health plan pursuant to the transitional rules must be treated

as if the child were a special enrollee. In future guidance, please explain how preexisting

condition provisions may be applied to children enrolling under the transitional rules in light

of the new prohibition of preexisting conditions on children under age 19.

If a child was dropped from coverage as the dependent of an active employee due to

reaching a dependent eligibility threshold and the employee subsequently had a COBRA

qualifying event, must the COBRA plan offer a transitional enrollment opportunity?

Special Rule for Grandfathered Group Health Plans

For plan years beginning before January 1, 2014, a group health plan that qualifies as a

grandfathered health plan may exclude an adult child who has not attained age 26 from

coverage only if the adult child is eligible to enroll in an eligible employer-sponsored health

plan other than a group health plan of a parent.

If an adult child is eligible for employer-sponsored coverage based on his own employment

but has no enrollment opportunity under his plan, will his eligibility remove the obligation

on the parents plan to enroll the adult child? The transitional enrollment opportunity

created under PPACA only applies to individuals whose coverage ended (or was denied

coverage, or was not eligible for coverage) by reason of reaching a dependent eligibility

threshold. The adult child may not be enrolled in his own employers plan due to cost, but

not due to reaching a dependent eligibility threshold. It is our understanding that the adult

childs plan provided through the adult childs employment is not required to offer a new

enrollment opportunity.

Is loss of eligibility under a parents plan due to eligibility under another employersponsored plan other than a group health plan of a parent a COBRA qualifying event?

-- 

Anne C. Lennan

Vice President

SPBA

Two Wisconsin Circle, Suite 670

Chevy Chase, MD 20815
301-718-7722

anne@spbatpa.org