Perry Bryant 

Executive Director 

West pbryant@wvahc.org Virginians for Affordable Health Care www.wvahc.org 

BOARD MEMBERS 

President 

Sen. Dan Foster, MD 

Vice-President 

Sam Hickman 

National Association 

of Social Workers 

West Virginia Chapter 

Treasurer 

Sally K. Richardson 

Secretary 

David Forinash 

Beth Baldwin 

West Virginia 

Nurses Association 

Rachel Dash 

Temple Israel 

Del. Barbara Fleischauer 

Todd Garland 

Diocese of 

Wheeling-Charleston 

DaleLee 

West Virginia 

Education Association 

John Lukens 

Sherri McKinney 

SEIU District 1199 

Brannon Meritt 

Del. ClifMoore 

Rev. James Patterson 

Partnership of 

African American Churches 

Kenny Perdue 

AFL-CIO 

George Pickett, MD 

Renate Pore 

West Virginia Center 

on Budget & Policy 

Craig Robinson 

Cabin Creek Clinic 

Emily Spieler 

Gary Zuckett 

WV Citizen Action Group 

August 4, 2010 

Office of Consumer Information and Insurance Oversight 

Department of Health and Human Services 

Attention: OCHO-9991-IFR 

PO Box 8016 

Baltimore, MD 21244-1850 

Dear Office of Consumer Information and Insurance Oversight: 

On behalf of West Virginians for Affordable Health Care 

(WVAHC), we are submitting the following comments on the interim 

final rule (lFR) and proposed final rule for group and individual health 

plans relating to grandfathered health plans under the Patient 

Protection and Affordable Care Act (ACA). 

WVAHC is a state-wide, public interest organization 

representing the interest of consumers and working on systemic 

health care reform issues. Our web site, www.wvahc.org , contains 

more information about WVAHC including brief descriptions of the 

members of the WVAHC Board of Directors. 

WVAHC supports the IFR with two exceptions. The rule takes 

significant and unprecedented steps to preserve one of the central 

tenants of the ACA: If you like the insurance coverage that you 

currently have, you get to keep it. The IFR strikes a careful balance 

that provides, but limits, employers' ability to respond to increase 

health insurance premiums by decreasing their contribution to their 

health insurance plan or increasing cost sharing by employees, while 

establishing clear limits that allow employees (and consumers in the 

individual market) to keep the health insurance that they like. These 

are extremely important protections for consumers, and WVAHC 

strongly supports incorporating these consumer protections into the 

final rule governing grandfathered plans. 

WVAHC would like, however, to make two recommendations 

for changes in the final rule. First, we recommend that the 

Departments (Treasury, Labor and Health and Human Services) 

allow very small businesses greater flexibility in deciding how to deal 

with increased premiums, or even consider exempting very small 

businesses from the IFR altogether. The Departments concluded in 

Office: 304.533.7941 • 1544 Lee Street • Charleston, West Virginia 25311 
the IFR that only 33 percent of small employers would maintain their grandfather 

status by 2013, and thus keep the insurance that they currently have. 

Currently, small businesses are less likely to provide employer sponsored 

insu'rance (ESI). The Kaiser-Health Research and Education Trust (HRET) 

Employer Health Benefits 2009 Annual Survey found that only 46 percent of 

employel"S with 3 to 9 employees offer ESI, while 72 percent of employers with 

10 to 24 employees provide ESI, and 98 percent of employers with 200 or more 

employees provide ESI. We have attached a graph outlining these participation 

rates for employers by the number of employees they employ between 1999 and 

2009. Basically, this graph illustrates that ESI rates held reasonable steady for all 

sizes of employers except for employers with nine to three employees. Their ESI 

participation rate has steadily declined over the ten year period, dropping ten 

percentage points in ten years (56 percent to 46 percent). 

Not only are fewer small employers providing ESI and less likely than 

large employers to provide ESI, they are generally more likely to charge their 

employees higher premiums and greater cost sharing. The Kaiser-HRET survey 

found that small employers charged their employees a lower premium for single 

coverage. However, small employers charged their employees higher premiums 

for family coverage; are more likely (40 percent to 13 percent) to have an annual 

deductible greater than $1,000; and charge their employees statistically (p>.05) 

higher deductibles when offering a health maintenance plan, a preferred provider 

plan and a point of service plan. Finally, during the last four years the growth in 

number of employees working for small employees who have a deductible of 

$1,000 or more for a single plan has increased substantially greater than large 

employers. For small employers the growth has increased from 16 percent of 

employees to 40 percent. For large employers the growth has increased from 10 

percent to 22 percent. 

These differences in cost sharing for small employers' employees versus 

large employers' employees strongly suggest that these small employers have 

less flexibility to absorb increases in premiums, and therefore, warrant greater 

flexibility under the IFR Our primary concern is for the very small employers -­

those with ten or fewer employees. With the loss of grandfather status these 

employers would be required to begin providing clinically effective preventive 

services to their employees without cost sharing by the employees. The small 

increase in premiums to provide this service is likely to result in at least some 

small employers dropping their ESI. Additionally, beginning in 2014, nongrandfathered, small employers will be required to provide all essential services. 

While the broad outline of what constitutes essential services is established in 

the ACA, the details of these services, which are necessary for a small business 

to determine the cost of relinquishing their grandfathered status, have not been 

developed yet. It is unreasonable for small businesses to determine whether to 

forego grandfathered status without knowing the potential costs of relinquishing 

this status. 
For these reasons WVAHC recommends that small employers -- those 

with fewer than ten employees -- be given greater flexibility in dealing with 

premium increases, or be exempt from the grandfather regulations altogether. 

Secondly, while self-insured plans can change administrators without 

relinquishing their grandfathered status, and plans governed by a collective 

bargaining agreement may change insurance carriers until the end of the current 

collective bargaining agreement and maintain their grandfathered status, all other 

employers that change their insurance carrier lose their grandfather status. For 

consumers getting to keep the insurance coverage that they like is not tied to 

who the insurance carrier is. Whether it is WellPoint or Humana is not nearly as 

important to consumers as getting to keep the benefits that they currently have; 

keeping their current doctor and other provider; and not having to change the 

drug they are currently taking when the drug formulary changes. 

WVAHC recommends that employers be allowed to change carriers and 

maintain their grandfathered status, if they meet the following conditions: 

• 	 Employers must comply with the IFR provisions that prohibit them from 

eliminating benefits; reducing the employers' share of premiums by more 

than five percentage points; substantially increasing copayments and 

deductibles; or increasing co-insurances. 

• 	 Employers cannot change the type of insurance product that they offer. 

For example, an employer who offered a preferred provider arrangement 

on March 23, 2010, they could not switch to a high deductible plan. 

• 	 The new provider network must be better than, or at least not 

"substantially different" from the existing provider network. Substantially 

different could be defined as ten percent variation from the existing 

provider network with the new provider network. This preserves the right 

of consumers to maintain their current primary care provider and other 

medical providers. 

• 	 Finally, the new drug formulary must be substantially similar to the existing 

drug formulary. Admittedly, defining substantially similar drug formulary 

will be a daunting task. 

Frequently, employers decide to change carriers as a result of exceedingly 

high premium increase with the annual renewal. Employers then seek alternative 

bids for ESI. The IFR builds in an incentive for these employers to accept this 

exceedingly high premium increase. 

As written, the IFR makes grandfathered employers a captured customer 

for their current carrier. The current carrier knows, for example, that any 
competitor's bid must include the cost of providing clinically effective preventive 

measures without cost sharing by the employees, while current carrier's bid 

typically would not include this benefit in their renewal bid. Additionally, as was 

discussed previously, the details of the essential benefits are currently unknown. 

With this uncertainty, there will be a strong incentive for employers to maintain 

their grandfathered status even if it means in the short-term accepting higher 

than necessary premium increases. 

In order to foster greater competition for the business of grandfathered 

employers, WVAHC recommends that employers be allowed to change carriers 

without relinquishing their grandfathered status provided they meet requirements 

that ensure that the employees, to the maximum extent possible, maintain their 

current benefits, type of insurance plan, current providers, and the drugs they are 

currently taking. 

These two recommended changes to the IFR should not over shadow 

WVAHC's strong support for the IFR and the final rule. These rules provide 

unprecedented consumer protection in allowing employees, and consumers in 

the individual market, to maintain the insurance that they currently have. It is our 

sincere hope that the IFR will be strengthened and adopted as a final rule with 

these two recommendations. If you have questions or concerns about our 

position, please do not hesitate to contact us. 

Perry 

Z~~ Bryant 
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