August 16, 2010
OCIIO-9991-IFC
Page 3

Thank you for this opportunity to express AACOM’s views on this important issue. If you have
questions or need further information, please do not hesitate to contact Susan Eads Role of
AACOM at srole@aacom.org or 301-968-4152.

Sincerely,

SOK.

Stephen C. Shannon, DO, MPH
President and CEO


Page 1 of 1

a

cep go REG 1 PAI 2-70
LEGAL PROCESSING DIVISION
PUBLICATION & REGULATIONS
BRANCH As of: September 09, 2010
Received: August 16, 2010
P U B LIC Status: Posted
Posted: September 09, 2010
SU BM ISSION Tracking No. 80632623
Comments Due: August 16, 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-2010-0010-0001
Group Health Plans and Health Insurance Coverage: Interim Final Rules for Relating to Status as
a Grandfathered Health Plan under the Patient Protection and Affordable Care Act

Document: IRS-2010-0010-0936
Comment on FR Doc # 2010-14488

SS

Submitter Information

Name: Stephen C. Shannon
Address:

5550 Friendship Boulevard

Suite 310

Chevy Chase, MD, 20815-7231
Email: srole@aacom.org
Phone: 301-968-4152
Fax: 301-968-4101
Submitter's Representative: Susan Eads Role
Organization: American Association of Colleges of Osteopathic Medicine
Government Agency Type: Federal
Government Agency: HHS

General Comment

Please find attached comments submitted by Stephen C. Shannon, DO, MPH, on behalf of the
American Association of Colleges of Osteopathic Medicine.

Attachments

IRS-2010-0010-0936.1: Comment on FR Doc # 2010-14488

https://fdms.erulemaking.net/fdms-web-agency/component/submitterInfoCoverPage?Call=P... 9/9/2010


aacomTM

AMERICAN ASSOCIATION OF
COLLEGES OF OSTEOPATHIC MEDICINE

August 16, 2010

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

Re: OCIIO-9991-IFC, 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 (comments filed electronically at: http://www.regulations.gov)

On behalf of the American Association of Colleges of Osteopathic Medicine (AACOM), [
appreciate the opportunity to comment on the interim final rules (IFRs) regarding grandfathered
health plans under the Patient Protection and Affordable Care Act (PPACA). AACOM isa

§ 501(c)(3) trade association, which represents the administrations, faculty, and students of the
nation’s 26 colleges of osteopathic medicine and three branch campuses that offer the doctor of
osteopathic medicine degree.

It is important to note that AACOM is a small- to medium-sized tax-exempt organization with
approximately 30 employees and, in general, has the same obstacles for obtaining good,
affordable health insurance coverage confronting other small- to medium-sized associations.
AACOM is captive to a small number of health insurance providers and does not have the
economic clout of larger enterprises.

AACOM purchases health insurance for its employees, enabling them to be fully insured.
AACOM does not have the resources or ability to self-insure as a means to control our health
insurance costs and benefits. AACOM, therefore, will greatly benefit from the expanded options
for health insurance that will be available beginning in 2014 through the Exchange. The
Exchange will allow small- to medium-sized organizations to benefit from the economics of
pooling that is not currently available.

Because the benefits of the Exchange will not be realized until 2014, however, AACOM will
continue to experience annual cost increases and lack of control over actual coverage unti} 2014.
As such, the grandfathering of AACOM’s existing coverage is extremely important, especially
prior to the establishment of a working Exchange system.

AACOM is greatly concerned that the grandfather provisions outlined in the IFRs are too
restrictive and will cause tax-exempt organizations, such as AACOM, to lose the grandfathering

us Boulevard

20855-1231



August 16, 2010
OCTIIO-9991-IFC
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benefit we expected. If forced to consider options of a non-grandfathered plan before it has the
benefit of an Exchange, AACOM is concerned that it may be priced out of the market and may
even have to drop coverage — something that it does not want to do and would be contrary to the
intent of health reform.

There are subsidies available for small employers to help offset the costs of providing insurance,
but these credits are very limited and start to be phased out in the case that an employer has more
than 10 employees. They are completely phased out if an organization has 25 or more
employees, so AACOM cannot benefit from these subsidies. The credits are also phased out for
employers with even modest compensation packages, Thus, while these subsidies do provide
assistance for some small tax-exempt employers, their benefit is very limited and will not help
AACOM.

Because AACOM is small- to medium-sized in terms of total numbers of employees, and it
cannot self-insure, it is at the mercy of health insurance plans sold by private carriers, AACOM
does not have control over co-pays and cost sharing. As such, simple changes to plans beyond
AACOM’s control can cause its plan to lose grandfather status. Also, because the Exchange is
not currently in place, AACOM anticipates that the prospect of finding new affordable insurance
that meets the new requirements of the PPACA is problematic. Furthermore, in order to control
costs so that health insurance can be purchased for employees, AACOM often must work with its
current insurance carriers to adjust co-pays and cost sharing in order to afford coverage,
especially in the current economic environment.

AACOM is concerned that the IFRs as currently drafted may force it to make the difficult and
undesirable choice of canceling health care coverage if grandfather status is revoked, especially
before the Exchange is in place. This is a very real concern, and, in recent years, significant
modifications and cancellations have occurred due to rising health care costs.

AACOM would suggest that for the interim period before the Exchange is established, small- to
medium-sized employers be allowed to make cost saving changes to co-payments and cost
sharing, provided they do not reduce the per-employee amount they pay for insurance. This
could help AACOM adjust and preserve coverage in anticipation of greater reform and options
that will occur, beginning in 2014.

AACOM also suggests that small- to medium-sized employers be allowed to change insurance
carriers prior to 2014 and have our plans treated as a grandfathered plans, provided that we do
not reduce the per-employee amount we pay for insurance. This would allow AACOM to
maintain the level of coverage for employees and reap the benefit of a less expensive plan pricr
to the implementation of the Exchange.