August 16, 2010 

Submitted through the Federal eRulemaking Portal: 

http://www.regulations.gov

Office of Consumer Information and Insurance Oversight 

Department of Health and Human Services 

P.O. Box 8016 

Baltimore, MD 21244-1850 

Attention: OCIIO-9991-IFC

Ladies and Gentlemen: 

The ERISA Industry Committee (“ERIC”) is pleased to submit these 

comments on the 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 (PPACA). The 

interim final regulations were published in the Federal Register on 

June 17, 2010. 

The Fact Sheet accompanying the release of the grandfather regulation 

provides the rationale for the policy underlying the regulation: 

“The rule announced today preserves the ability of the American 

people to keep their current plan if they like it, while providing 

new benefits, by minimizing market disruption and putting us on 

a glide path toward the competitive, patient-centered market of 

the future. While it requires all health plans to provide 

important new benefits to consumers, it allows plans that existed 

on March 23, 2010 to innovate and contain costs by allowing 

insurers and employers to make routine changes without losing 

grandfather status. Plans will lose their “grandfather” status if 

they choose to significantly cut benefits or increase out-of-pocket 

spending for consumers – and consumers in plans that make 

such changes will gain new consumer protections.” 

ERIC members appreciate the desire of many employees to preserve 

their existing health coverage in the face of increasing medical costs 

and the significant changes introduced by PPACA. At the same time, 

however, and as explained in more detail below, we are very concerned 

that not only will PPACA’s new rules, as interpreted by the regulation, 

not result in a competitive market in the future, but they will actually 

lead in the opposite direction. 

The 

ERISA 

Industry 

Committee 

1400 L Street, N.W. 

Suite 350 

Washington, DC 20005 

T (202) 789-1400 

F (202) 789-1120 

www.eric.org 
The ERISA Industry Committee Page 2 of 12 

In our comments on the regulation, we also express our concern over the 

unprecedented omission of a delayed effective date for self-insured collectively 

bargained plans and urge clarification with respect to the exemption from the 

grandfather rules for certain “retiree only” plans. In addition, we note our concern 

with respect to the disclosure requirement and with specific provisions of the 

regulation regarding an elimination of benefits that lead to the loss of grandfathered 

status. Last, we respond to the Departments’ request for comments on our perspective 

on the impact on grandfather status wrought by changes to plan structures, provider 

networks, and prescription drug formularies. 

ERIC’s Interest in the Interim Final Regulations 

ERIC is a nonprofit association committed to the advancement of the employee 

retirement, health, incentive, and welfare benefit plans of America’s largest 

employers. ERIC’s members sponsor some of the largest private group health plans in 

the country, which provide comprehensive health benefits to tens of millions of 

workers and their families. 

ERIC’s members are committed to, and known for, providing high-quality, affordable 

health care. Our members expend considerable resources to maintain plans of this 

caliber. High-quality, affordable health care has become an increasingly difficult 

standard for many companies, however, as medical costs continue to grow at 

unsustainable rates. Thus, we are concerned over the impact of the grandfather 

regulation on our ability to provide this health care in a manner that makes efficient 

use of our resources while maximizing high-quality health care appropriate to the 

needs of our unique work forces. 

 
The ERISA Industry Committee Page 3 of 12 

Comments on the Regulation

1. Loss of grandfather status should be limited to significant and 

fundamental plan changes and should provide more flexibility to plan 

sponsors to accommodate their need both to control costs and to tailor plan 

changes to the needs of plan participants. 

Maintaining status as a grandfathered plan in the face of regulatory uncertainty 

Under PPACA, a group health plan faces a choice between keeping its plan provisions 

much the same as they were on March 23, 2010, thus maintaining its grandfather 

status, or to lose this status and operate as a “non-grandfathered” plan for plan years 

beginning on or after September 23, 2010. 

While both grandfathered and non-grandfathered plans must meet certain new 

PPACA standards (such as a ban on lifetime limits and making coverage available to 

adult children), non-grandfathered plans must comply with other significant 

additional rules in a very short period of time. These new rules include a requirement 

to cover certain preventive services without participant cost-sharing as well as 

adherence to new claims and external review rules. (Other rules relevant only for 

non-grandfathered plans become effective in 2014.) Although explanatory regulations 

have been published for nearly all of the PPACA statutory requirements that are 

applicable in the near future, many open questions remain, and plans are reluctant to 

commit themselves to giving up their grandfathered status and following these 

additional rules before the parameters have been made explicit. 

The ability of a plan to remain grandfathered also has been made unusually difficult 

by regulatory rules that restrict a plan’s efforts to control costs and tailor its 

provisions to the needs of its participants. Many plans thus face the choice of 

struggling to maintain grandfather status, often at the expense of changing plan 

provisions to more closely align with and balance the needs of employers and 

employees, or forgoing this status, and being forced to immediately comply with 

ambiguous regulatory mandates that could entail significant cost and administrative 

challenges. 

ERIC recently surveyed its members to ascertain how many were planning, as of that 

particular point in time, to keep their grandfather status. Slightly more than half 

were then planning to do so. The key reason cited by almost all of the plans choosing 

to remain grandfathered was the necessity to buy time to understand how the new 

rules applicable only to non-grandfathered plans would affect them. For instance, 

despite the prevailing view that most large plans would meet the new PPACA 

preventive care standards, most of our plan sponsors expressed reservations that they 

currently fully adhered to these standards. (This was due primarily to uncertainty 

over the scope and duration of the preventive care requirements and ambiguity 

concerning their application. We intend to submit comments separately on those 
The ERISA Industry Committee Page 4 of 12 

issues.) Similarly, most of our members expressed the view that they would not have 

sufficient time to analyze and comply with the new claims and external review 

regulation. Thus, these plans wanted to remain grandfathered until they could fully 

understand how the new PPACA rules would affect current practices. 

Maintaining status as a grandfathered plan while keeping healthcare affordable 

Employers do appreciate the concerns that drove healthcare reform and the desire of 

proponents to extend coverage and many consumer protections to a wider universe of 

individuals. Unfortunately, however, these goals are often not easily reconciled with 

the need to keep healthcare affordable for both employers and employees. For 

instance, the extension of health coverage to adult children (for which no supplemental 

premiums may be charged) adds significant new expenses for employers whether or 

not their plans are grandfathered. The PPACA provision creating the right to external 

review will impose additional costs on non-grandfathered plans. 

Under the grandfather regulation, employers face serious constraints in their ability 

to rationally allocate costs. As noted above, the regulation’s Fact Sheet states that 

employers will be able to make routine changes without losing their grandfather 

status and that only significant benefit cutbacks or cost-sharing increases will cause a 

loss of grandfather status. The regulation itself seems to take a different tack; 

employers are prevented from making such commonplace changes as adjusting 

coinsurance levels to reflect new mandates imposed by the Paul Wellstone and Pete 

Domenici Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”) or 

from increasing copayments by relatively small amounts over a number of years to 

reflect increasing costs of health care and coverage. 

Employers must have sufficient flexibility to reflect increasing medical costs in a 

manner that is most suitable for their employees and their own ability to continue to 

maintain their plans. What may be appropriate for the demographics of one plan 

population could be completely inappropriate for an older, younger, sicker, or healthier 

plan population. Employers must be able to take these differences into account when 

designing their plan premiums and cost-sharing structures. Plans that are not able to 

reflect these differences will not meet the needs of their participants and will not 

maximize their ability to control expenses. This will often result in unnecessary cost 

increases for employees as well as employers. The unintended result of imposing an 

inflexible and unnecessarily narrow interpretation of grandfathering will likely be to 

generate more plan curtailments and cutbacks and increased costs for participants, all 

inconsistent with the objectives of PPACA. 

Recommendation for a more flexible standard 

Rather than relying on a series of rules restricting nearly all changes in benefit 

structures or contributions in order to maintain grandfather status, we urge that a 

more general standard be used instead. For instance, plans should be able to 
The ERISA Industry Committee Page 5 of 12 

maintain their grandfather status if they do not significantly decrease the benefits 

provided to the average plan participant from one year to the next based on the 

expected average out-of-pocket costs for participants. This would allow for a more 

flexible allocation of costs among all plan participants, as appropriate, while still 

maintaining the sponsor’s overall support of the plan. 

Alternatively, the standard could be based on actuarial equivalence; in this case, the 

plan would be considered to have retained grandfather status if it were still the 

actuarial equivalent of the plan in existence on March 23, 2010. 

Either of these standards would be far superior to the current tests, which do not give 

adequate scope to the efforts of plan sponsors to restrain costs and maximize benefit 

efficiency in the manner most suitable for their own unique plan populations. 

2. Collectively bargained plans, whether insured or self-funded, should have 

a delayed effective date that treats the plan’s coverage as grandfathered 

until termination of the last of the collective bargaining agreements relating 

to the coverage that was in effect on March 23, 2010. 

Section 147.140(f) of the regulation applies the grandfathering rules to collectively 

bargained plans, providing a delayed effective date for insured collectively bargained 

plans. Unfortunately, no delayed effective date is provided for self-funded collectively 

bargained plans. 

We believe the lack of a delayed effective date for self-funded collectively bargained 

plans to be extremely rare, if not unprecedented. It does not serve the interests of 

plan participants, nor does it further any broader health care goals. Instead, it 

seriously disrupts existing collective bargaining agreements, potentially undermining 

the negotiating relationships between employers and employees. 

We urge that the Departments use the same authority they exercised to essentially 

exclude retiree-only plans from the coverage mandates of PPACA to apply a delayed 

effective date to self-insured collectively bargained plans. For instance, the preamble 

to the grandfather regulation states that “[t]here is no express statement of intent that 

nonfederal governmental retiree-only plans should be treated differently from private 

sector plans or that excepted benefits offered by nonfederal governmental plans should 

be treated differently from excepted benefits offered by private sector plans.” This 

part of the preamble goes on to provide that treating nonfederal plans differently 

“would create confusion” and, thus, HHS does not intend to use its resources to enforce 

the requirements of PPACA to nonfederal government retiree-only plans. 

Similarly, IRS Notice 2010-38, which addresses the tax treatment of health care 

benefits provided with respect to children under age 27, notes that prior to PPACA, 

the exclusion for employer-provided accident or health plan coverage under §106 of the 

Internal Revenue Code paralleled the exclusion for reimbursements under §105(b). 
The ERISA Industry Committee Page 6 of 12 

After PPACA, this was no longer the case. Part III of the Notice states that there “is 

no indication that Congress intended to provide a broader exclusion in §105(b) than in 

§106. Accordingly, IRS and Treasury intend to amend the regulations under §106, 

retroactively to March 30, 2010, to provide that coverage for an employee’s child under 

age 27 is excluded from gross income.” 

There is also no indication that Congress intended to treat self-funded collectively 

bargained plans differently from insured plans. The regulation focuses on an overly 

restrictive interpretation of PPACA §1251(d) in limiting the intended delayed effective 

date to insured plans only, a result that is inconsistent with a long history of allowing 

collectively bargained plans to retain bargained-for provisions until the applicable 

union agreements expire. 

Moreover, this disparate treatment would create “confusion” among participants in 

these plans as well as their unions and employers. Thus, we recommend that the 

Departments exercise their regulatory discretion, as they have done in the two 

examples cited, to provide a delayed effective date for self-funded collectively 

bargained plans with respect to the grandfather regulation. 

3. The exemption for retiree-only plans should be clarified to include plans 

covering rehired retirees, individuals on long-term disability, and certain 

individuals with end stage renal disease. 

The preamble to the grandfather regulation clarifies that retiree-only plans are 

exempt from coverage mandates added by PPACA to Part 7 of Title I of ERISA and 

Chapter 100 of the Code and will remain exempt from mandates that existed under 

these sections before PPACA. More specifically, the provisions under ERISA and the 

Code exempting retiree-only plans from these mandates state that the mandates do 

not apply to plans that cover fewer than two current or active employees.1 

Many plans provide retiree medical coverage to individuals who, for reasons unrelated 

to the coverage, are also employees of the employer providing the coverage. For 

example, retiree plans may cover retirees who have been rehired by the employer after 

retiree medical coverage began and spouses and dependents of retirees who may 

themselves be employees of the employer. In addition, retiree medical plans may 

provide benefits to individuals receiving long-term disability benefits from the 

employer and to certain individuals who have been diagnosed with End Stage Renal 

Disease (ESRD). 

Because employers face penalties of up to $100 per day per covered individual if they 

fail to comply with these mandates, it is important for employers to have clear 

standards to apply in determining whether their retiree plans are exempt from the 

 

1

 Code § 9831(a) and ERISA § 732(a). 
The ERISA Industry Committee Page 7 of 12 

mandates. Accordingly, we request further clarification, as set forth below, for 

determining whether a retiree plan covers fewer than two current or active employees. 

Rehired Retirees 

Former employees (including their spouses and dependents) usually become eligible to 

participate in an employer’s retiree health plan if they have completed significant 

years of service and reached a specified age at termination of employment. It is not 

unusual for an employer to allow retired employees who become re-employed to 

remain eligible to participate in the employer’s retiree health plan after they return to 

work. Retirees have already served a full career with an employer, which serves as 

the basis for their retiree health coverage, and retirees may be re-employed for a 

specific project, on a temporary basis, or for a limited period of time. In addition, 

retiree health plans often cover spouses and dependents of retirees, including 

surviving spouses and dependents, even if the spouse or dependent is currently 

working for the employer. During periods of employment, retirees (and their spouses 

and dependents) continue to participate in the retiree health plan based upon their 

retiree status (or their status as spouses or dependents of deceased retirees) and not 

because of any services performed during the current period of employment. 

There are several reasons for sponsors to allow re-employed retirees (or their 

employed spouses and dependents) to continue to participate in a retiree health plan. 

Sponsors often make changes to retiree health plans that apply only to retirees who 

become eligible to, or begin to, participate in the plan after a prospective date. 

Accordingly, to avoid penalizing retirees for returning to work, sponsors allow retirees 

to remain in the retiree plan after returning to work so that they can continue to 

maintain the level of coverage to which they were entitled when they initially retired. 

Retiree plans that cover spouses and dependents do not typically exclude spouses and 

dependents who happen to be employed by the sponsor or force the retiree and family 

members into separate plans. Excluding individuals from coverage during periods of 

employment with the sponsor could be disruptive; permitting continued retiree 

medical coverage provides continued access to the same network of providers and 

preserves an individual’s satisfaction of deductible and out-of-pocket limits. 

The Departments should clarify that a plan does not fail to be a retiree-only plan 

merely because the plan provides coverage to current employees if such coverage is 

provided for a reason other than, and is not a condition of, current employment. For 

example, a retiree medical plan that provided coverage to employees who terminated 

employment after completing 10 years of service and reaching the age of 55 would not 

fail to be a retiree-only plan merely because, after retiring and beginning to receive 

coverage, more than two retirees were rehired and continued to be covered by the plan. 

Similarly, the plan would not fail to be a retiree-only plan merely because the plan 

covered more than two surviving spouses who, at the time their retiree spouses died, 

were employed by the employer. In each case, coverage would be provided based on 
The ERISA Industry Committee Page 8 of 12 

the retiree’s retirement from the employer and would not be a condition of any current 

employment. 

Participants Receiving Long-Term Disability Benefits 

Many employers provide health benefits to individuals who are receiving employerprovided long-term disability benefits under the employer’s retiree health plan. 

Because employers often treat individuals on long-term disability as current 

employees for some purposes but not others, we recommend that the Departments 

provide employers with a bright-line test for determining whether an individual who is 

receiving disability benefits is no longer considered to have current employment status 

for purposes of the retiree-only exemption. 

Employers have been given clear rules for determining the employment status of 

individuals on long-term disability for other purposes. For example, HHS issued rules 

providing that, for purposes of determining whether Medicare is the secondary payer, 

an individual receiving disability benefits from an employer is considered currently 

employed only for the first six months that he or she receives disability benefits.2 In 

addition, under the Code, disability benefits are generally subject to FICA and FUTA 

taxes until the expiration of six calendar months following the last calendar month in 

which the recipient worked for the employer.3 

Accordingly, the Departments should clarify that an individual who is receiving 

disability benefits will not be considered a current or active employee for purposes of 

the exemption if the individual has not been in active, current employment with the 

employer for more than six months. The Departments could apply either the Medicare 

standard -- i.e., a disabled individual ceases to be employee after receiving benefits for 

six months -- or the FICA and FUTA standard -- i.e., a disabled individual ceases to be 

an employee six months after ceasing to work for the employer. Most importantly, 

there should be a clear standard to apply. Pursuant to this clarification, a retiree 

health plan will qualify for the retiree-only exemption even if the plan covers 

individuals who are receiving disability benefits, provided that these individuals have 

not been actively at work for the employer for more than six months since becoming 

disabled. 

Participants with ESRD 

Many employers provide health benefits under their retiree group health plans to 

active employees (and their spouses and dependents) who have been diagnosed with 

ESRD and for whom Medicare is the primary payer of benefits. These employers allow 

active employees (and their spouses and dependents) with ESRD to enroll in the 

retiree plan after Medicare becomes the primary payer to the employer’s group health 

 

2

 42 C.F.R. § 411.104(a)(2). 

3

 Code §§ 3121(a)(4) and 3306(b)(4). 
The ERISA Industry Committee Page 9 of 12 

plan for active employees. Under rules issued by HHS, Medicare becomes primary 

payer generally 30 months after the earlier of the date that the individual first 

becomes entitled to Medicare part A on the basis of ESRD or the first month in which 

the individual would have become entitled to Medicare part A on the basis of ESRD if 

he or she had filed an application for Medicare part A benefits.4 Medicare becomes 

primary payer on the basis of ESRD regardless of whether the individual or other 

family member has current employment status.5 

Employers allow employees (and their spouses and dependents) who have been 

diagnosed with ESRD to participate in their retiree health plans after Medicare 

becomes primary payer because these plans generally provide coverage in coordination 

with Medicare that is at least as generous as, and no more expensive than, the 

coverage available under the plan for active employees. In addition, the retiree health 

plans are generally more adept at coordinating benefits with Medicare than the group 

health plan for active employees. 

Therefore, the Departments should clarify that the employment status of participants 

(and their spouses and dependents) with ESRD will be disregarded for purposes of the 

retiree-only exemption in the same way that it is disregarded for purposes of the 

Medicare secondary payer rules. Accordingly, a retiree health plan will qualify for the 

exemption even if it covers active employees (and their spouses and dependents) who 

have been diagnosed with ESRD and for whom Medicare has become the primary 

payer to the employer group health plan. 

4. The disclosure requirement with respect to grandfathered plans should be 

modified to limit the frequency with which the new grandfather statements 

must be distributed as well as to delete any requirement that contact 

information for a plan administrator be included. 

Section 147.140(a)(2) of the grandfather regulation provides that in order to maintain 

its status as a grandfathered plan, the plan must include a statement describing the 

benefits provided under the plan, that the plan believes it is a grandfathered plan, and 

contact information for questions and complaints. The regulation’s model language for 

the disclosure requirement provides that “Questions regarding which protections 

apply and which protections do not apply to a grandfathered health plan and what 

might cause a plan to change from grandfathered health plan status can be directed to 

the plan administrator at...” This information must be provided in any materials 

provided to a participant or beneficiary describing plan benefits. 

With respect to this disclosure requirement, we first recommend that it not be 

interpreted to mandate the provision of this grandfather information every time a plan 

sends out benefit information to any participant or beneficiary. Many plans send out 

 

4

 42 C.F.R. § 411.162. 

5

 42 C.F.R. § 411.162(a)(2). 
The ERISA Industry Committee Page 10 of 12 

brief participant communications that highlight particular features of the plan, which 

can be as short as a postcard. This lengthy disclosure language could take up a 

significant portion of the communication piece. Thus, we recommend that this 

information be included only in significant disclosure documents sent by plans to all 

participants, such as the Summary Plan Document (SPD) and the Summary of 

Material Modifications, as well as material provided in conjunction with a health 

plan’s annual open enrollment. 

Second, we recommend that the requirement for the notice to include contact 

information for a plan administrator (as illustrated in the regulation’s model 

language) be deleted for the reason that most plan administrators will not be able to 

answer questions regarding which PPACA provisions do and do not apply to 

grandfathered plans. Plan administrators are well-versed in the particulars of their 

own plans but not necessarily in the intricacies of PPACA. Moreover, most plans 

already provide general reference in the SPD and other relevant communications 

materials regarding contacting appropriate plan officials. Thus, the reference to plan 

administrators should be deleted, and readers should be directed solely to the 

governmental sources listed in the regulation’s model language. 

5. Elimination of a non-essential health benefit should not result in the loss 

of a plan’s grandfather status. Further, loss of grandfather status should not 

be linked to the elimination of a “necessary element” to diagnose or treat a 

condition. 

Section 147.140(g) of the regulation describes the changes that would cause a plan to 

lose grandfather status. One of these is the elimination of all or substantially all 

benefits to diagnose or treat a particular condition. The regulation goes on to specify 

that the elimination of benefits for any necessary element to diagnose or treat a 

condition is considered the elimination of all or substantially all benefits to diagnose or 

treat a particular condition. 

We have two concerns with this requirement. First, it goes well beyond the basic 

thrust of PPACA, which, when fully implemented, will not require any health plans to 

provide benefits that are not “essential” health benefits. (Group health plans provided 

outside of the exchanges will not be required to provide any specified health benefits, 

essential or not. A regulatory definition of essential health benefits has not yet been 

provided.) Under the Departments’ interim and final regulation addressing the 

PPACA provisions regarding preexisting condition exclusions, lifetime and annual 

dollar limits on benefits, rescissions, and patient protections, a group health plan is 

permitted to impose annual or lifetime limits on specific covered benefits that are not 

“essential” health benefits. 

Under this grandfather regulation, however, a plan could lose its grandfather status 

because it ceased to provide coverage for a health condition that would not be 
The ERISA Industry Committee Page 11 of 12 

considered to be an essential health benefit and that could be subject to annual and/or 

lifetime limits. This is an untenable requirement, one that could eventually force 

plans to curtail key health coverage in order to pay for benefits that are of much less 

significance to an individual’s health and wellness. We recommend instead that, 

similar to the treatment under the regulation governing permissible annual and 

lifetime limits, grandfather status be tied only to the elimination of an essential

health benefit. 

Second, we strongly urge that the portion of the regulation tying the elimination of a 

“necessary element” to diagnose or treat a condition to a loss of grandfather status be 

removed. There simply is no uniformly accepted method or procedure available for 

plans to use to determine what constitutes a “necessary element” to diagnose or treat a 

condition. 6

6. Responses to the Departments’ request for comments on other changes 

that could lead to the loss of a plan’s grandfather status 

Changes to plan structure such as switching from a health reimbursement account to 

major medical coverage or from an insured to a self-insured product 

As we have stated above, we believe that plan sponsors should have maximum 

flexibility to design their benefits in the way that is most compatible with efficient and 

effective health coverage for both employees and their employers. If a plan sponsor 

were to shift from an insured product to a self-funded plan while making no plan 

changes that would otherwise cause it to lose grandfather status, we see no reason 

why a change in funding mechanism alone should result in a loss of grandfather 

status. 

Changes to a plan’s provider network 

Changes to a provider network outside of the plan sponsor’s control should not result 

in the loss of grandfather status. These would include providers leaving a network 

voluntarily due to illness, death, or retirement, as well as vendors eliminating 

providers from their networks. Changing a plan’s Third Party Administrator, which 

in and of itself does not cause a loss of grandfather status, generally entails some 

changes in a plan’s provider network; as these changes follow from the change in TPA, 

these network changes also should not invoke a loss of grandfather status. 

 

6

 A similar challenge is presented by the Departments’ regulation on preventive services, which requires nongrandfathered plans to provide certain evidence-based items or services that have in effect a rating of A or B in the 

current recommendations of the United States Preventive Services Task Force. Even this seemingly simple 

requirement, based on an existing list, has led to innumerable difficult and as yet unanswered questions regarding the 

scope and duration of the services that must be provided. 
The ERISA Industry Committee Page 12 of 12 

Loss of status should not be geared to the “magnitude” of these network changes as 

this is primarily a relative concept; the loss of a major provider in a small town, for 

instance, while significant for participants in that town, would be of minimal 

importance to a plan covering thousands of employees on a nationwide basis. 

Changes to a plan’s prescription drug formulary 

No changes to a plan’s prescription drug formulary should result in a loss of 

grandfather status. Drug formularies are updated continually in an effort to provide 

plan participants with the best drugs, reflecting advances in medical research and 

updated safety concerns. Formulary management is a key component of a plan’s 

ability to control cost and quality. 

Other substantial change to overall benefit design 

Again, we stress that plan sponsors should have maximum flexibility to design their 

benefits in the way that is most compatible with efficient and effective health coverage 

for both employees and their employers. If plan sponsors lose their ability to innovate 

and seek value in their benefit design, it is ultimately the employees who will suffer 

from higher costs and less appropriate benefits. Accordingly, we believe that 

grandfathered plans should be able to retain that status while making reasonable and 

appropriate changes that are responsive to the needs of participants and plan 

sponsors. 

ERIC appreciates the opportunity to provide comments on the interim final regulation. 

If you have any questions concerning our comments, or if we can be of further 

assistance, please let us know. 

Sincerely, 

Gretchen K. Young 

Senior Vice President, Health Policy