August 16, 2010 

 

 Mr. Jim Mayhew 

Office of Consumer Information and Insurance Oversight 

Department of Health & Human Services 

Attention: OCIIO-9991-IFC 

P.O. Box 8016 

Baltimore, MD 21244-1850 

Electronic Submission, regulations.gov 

Document ID HHS-OS-2010-0015-0001 

Attention: Grandfathered Plans 

Dear Mr. Mayhew: 

The Bazelon Center for Mental Health Law—the nation’s leading national 

legal-advocacy organization representing children and adults with mental 

illnesses—is pleased to submit the following comments on the Interim Final 

Rules for Group Health Plans and Health Insurance Coverage Relating to 

Status as a Grandfathered Health Plan Under the Affordable Care Act. We 

appreciate the opportunity to provide feedback on these most important 

regulations. 

General Comments

We strongly support the Departments’ efforts to provide robust regulations 

that ensure the protection of health insurance consumers, and continued 

access to high quality, affordable care. We applaud the efforts of the 

Departments to honor the intention of the Affordable Care Act to preserve 

an individual’s right to maintain their current health insurance plan, to 

reduce short term disruptions in the market, and to ease the transition to 

market reforms that phase in over time. 

Many Americans remain happy with their insurance coverage, and it is 

important that consumers continue to have access to the benefits that they 

enjoy. In light of this, we commend the Departments for seeking to make 

certain that consumers are also afforded certain protections when choosing 

to retain grandfathered coverage, including requiring the disclosure of 

information about an individual’s plan status, and ensuring that plans are 

not significantly altered without affecting their status as a grandfathered 

plan. 

Civil Rights and Human Dignity 

BOARD OF TRUSTEES 

Nikki Heidepriem, Chair 

Fabiani & Company, Washington DC 

Anita L. Allen 

University of Pennsylvania Law School 

David B. Apatoff 

Arnold & Porter, Washington DC 

Eileen A. Bazelon 

Department of Psychiatry 

Medical College of Pennsylvania 

Rhonda Robinson-Beale 

OptumHealth Behavioral Solutions

Robert A. Burt 

Yale Law School 

Jacqueline Dryfoos 

New York NY

Kenneth R. Feinberg 

Feinberg Rozen, LLP, Washington DC 

Howard H. Goldman 

Department of Psychiatry 

University of Maryland School of Medicine 

Emily Hoffman

Cleveland, Ohio

Jacki McKinney 

National Association of People of Color 

Consumer/Survivor Network 

Martha L. Minow 

Harvard Law School 

Stephen J. Morse 

University of Pennsylvania Law School 

Joseph G. Perpich 

JG Perpich LLC, Bethesda MD 

Paul Recer 

Science and medi al journalis c t 

Washington DC

Harvey Rosenthal 

New York Association 

of Psychiatric Rehabilitation Services 

Elyn R. Saks 

University of Southern California 

Gould School of Law 

W. Allen Schaffer, MD 

Bangor, ME

Cynthia M. Stinger 

Washington Group International 

Martin Tolchin 

Journalist and author, Washington DC 

Sally Zinman 

Mental Health Consultant 

Berkeley, CA 

HONORARY TRUSTEE 

Miriam Bazelon Knox 

Washington DC 

TRUSTEES EMERITI 

Mary Jane England 

Regis College 

H. Rutherford Turnbull, III 

Beach Center for Families and 

Disability, University of Kansas 

PRESIDENT & DIRECTOR 

Robert Bernstein, PhD 

Affiliations listed for informational purposes only

1101 Fifteenth Street NW, Suite 1212, Washington DC 20005 u 202-467-5730 (voice) 202-223-0409 (fax) u www.bazelon.org 
Additional Comments

The Bazelon Center would like to submit additional comments on the following aspects of the 

interim final regulations: 

I. Disclosure Requirements 

II. Changes in Plan Structure 

III. Mental Health Parity 

IV. Monitoring and Oversight 

Disclosure 

We applaud the Departments for ensuring that consumers are well informed about their plan’s 

grandfathered status, and value the inclusion of model language to facilitate this disclosure. 

Consumers may find it challenging to fully appreciate the different rules that apply to 

grandfathered plans and to non-grandfathered plans, and we commend the Departments for 

acknowledging that they must be provided with adequate information about their benefits in 

order to make informed choices. 

In response to the request for comments regarding this model disclosure, we recommend that 

language be included in the rule that affirms the requirement in §2715 of the ACA mandating 

that pan documentation must be presented in a “culturally and linguistically appropriate manner 

and” utilize terminology understandable by the average plan enrollee. We urge that this standard 

be applied to the disclosure of grandfathered status that is required under the interim final rule. 

We also urge the Departments to consider requiring that this disclosure be communicated to 

enrollees annually. 

We believe that the model disclosure language provided in the regulation can be strengthened in 

several other ways. First, the disclosure statement could be improved by incorporating the 

definition of a grandfathered plan as defined in Paragraph (a) of 26 CFR 54.9815–1251T, 29 

CFR 2590.715–1251, and 45 CFR 147.140 of the interim final regulations. Currently, the model 

language simply indicates that grandfathered plans can maintain certain basic health coverage 

that was already in effect when that law was enacted. Many consumers, however, may be 

unaware of when the law was enacted, and thus it is important to provide consumers with the 

definition under law, which acknowledges the March 23, 2010 proviso.

Also, the disclosure statement could be strengthened by expressly stating which consumer 

protections in the ACA apply to grandfathered plans, and which do not. This will help to reduce 

consumer confusion about the differences between grandfathered and non-grandfathered plans 

and further clarify what protections apply to their coverage. 

Finally, the disclosure statement would be more helpful to plans and consumers alike if it 

included language to the effect that grandfathered plans are required to comply with the mental 

health parity law (see below) and other significant protections enacted prior to the enactment of 

the ACA. 
Changes in Plan Structure 

We commend the Departments for ensuring that plans comply with a number of vital consumer 

protections in order to preserve their grandfathered plan status. We agree that the elimination of 

all or substantially all benefits necessary to diagnose or treat a particular condition, including a 

mental health or substance use condition, should trigger a loss of grandfathered status.. We are 

particularly pleased to see the specific inclusion of a scenario involving mental health treatments 

among the examples of this prohibition. We also agree that an alteration in employer 

contribution rates is just cause for the loss of grandfathered status. 

Additionally, we applaud the inclusion of limitations on changes in cost-sharing, including 

coinsurance, copayments and deductibles, which may impose a greater burden on beneficiaries. 

Research has shown that co-payments that people from seeking care, and all forms of costsharing present particular challenges for people with little discretionary income, including those 

with mental illnesses. 

In response to the solicitation of comments on whether the list of plan changes provided in the 

interim final rule is appropriate and what other changes, if any, should be added to this list, we

urge the Departments to consider issuing additional guidance clarifying that other major plan 

changes that would have a significant harmful impact on access to care and would also prompt 

the loss of grandfathered status. We suggest inclusion of the following: 

 Restrictive changes in plan structure, such as changing from a Preferred Provider 

Organization (PPO) to a Health Maintenance Organization (HMO), should cause the 

termination of a plan’s grandfathered status. Such changes may affect beneficiaries’ 

access to services by, for instance, modifying the network of specialty providers to which 

they have access (including specialty mental health providers). 

 Switching from a fully insured health plan to a self-insured plan, which may lead to 

adverse selection of plans in the fully-insured market. 

 Making substantial modifications to provider networks which may limit the number of 

providers (including primary care, mental health and addiction service providers) 

accessible to plan beneficiaries. It is reasonable to allow some network modification to 

account for normal fluctuations in provider networks, or if providers are limited in a 

certain geographic region. However, major changes in network often result in treatment 

delays and interruptions for beneficiaries or negatively affect continuity of care, and thus 

must be considered when evaluating the preservation of grandfathered status. 

 Changes to a plan’s prescription drug formulary. These changes may have a significant 

impact on individuals with mental illnesses who often experience multiple chronic 

conditions and rely on a number of medications to manage their illnesses. Changes that 

would affect grandfathered status should include changing the formulary in a way that 

increases enrollees’ cost-sharing requirements, restricting the formulary by shifting from 

open formulary to a closed or tiered formulary, restricting a formulary to generic 
medications only, and additional practices that significantly restrict enrollees’ access to 

medications, including those prescribed for the treatment of mental health and substance 

use disorders. 

A final clarification that may be necessary involves the reference to “all or substantially all 

benefits to diagnose or treat a particular condition.” The interim final regulations fail to define 

what standards will be used to determine what benefits should be included among those essential 

to diagnose or treat a condition, and by whom the determination will be made. We recommend 

that a clear definition be included that will describe the process or method by which such 

benefits will qualify as necessary. 

Implementing Mandates Not Required in Grandfather Plans 

We commend the Departments’ assessment that plans should not lose grandfathered status if 

they voluntarily comply with provisions in the Affordable Care Act beyond those that are 

required by law, such as increasing the scope of benefits or making changes in order to comply 

with federal or state law. Allowing insurers to offer consumers more robust benefits or those 

protections that will become mandatory for non-grandfathered plans under the ACA should be 

encouraged. Additionally, state laws that impose requirements on health insurance issuers that 

are more stringent than the requirements of the ACA must not superseded by the Act. However, 

we also believe that the regulations should explicitly state that any change in coverage that does 

not prove beneficial to plan members should result in the loss of grandfathered status. 

Mental Health Parity 

We commend the Departments for requiring that grandfathered plans comply with the mental 

health and addiction parity provisions of the ACA. The MHPAEA eliminates barriers that have 

prevented thousands of individuals with mental illnesses and substance use disorders from 

accessing critically important treatment services. We also ask any that information 

communicated to plans, plan enrollees, and the public clearly and explicitly acknowledges and 

explains the law’s mental health and addiction parity requirements. 

Monitoring and Oversight 

We also encourage the Departments to promulgate further guidance regarding the monitoring of 

health plans for violations that would result in the loss of a plan’s grandfathered status. There is 

a great need for a strong, well-defined mechanism for enforcement and oversight of plans, and 

the interim final regulations do not describe such a means. The regulations should also clarify 

who may submit challenges to a plan’s grandfathered status (consumers, providers, state 

agencies, or advocacy organizations), as well as what entity will be responsible for reviewing 

such claims. 

We are particularly concerned about the monitoring of self-insured ERISA plans. It may prove 

especially difficult for the Department of Labor to adequately regulate and enforce applicable 

provisions in the law and regulations in the large self-insurance market, given the competing 

priorities of this considerable Department. The system for reporting concerns and the process by 
which concerns will be reviewed must be further delineated to ensure transparency, adequate 

enforcement, and plan accountability. 

We thank you again for the opportunity to comment on these regulations, and appreciate your 

consideration of our proposed recommendations. We welcome the opportunity to discuss any of 

these thoughts in greater detail. Please contact Allison Wishon Siegwarth at 202-467-5730 x 113 

or allisonw@bazelon.org for additional information or further clarification. 

 

Sincerely, 

Chris Koyanagi 

Policy Director