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. } DIVISION PEG HSRC
LEGAL PROCESSING DIVIS A. ? AUG 5
& REGULATI 2010
PUBLICATION RE

As of: August 05, 2010

PUBLIC Btatus:Postes

Posted: August 05, 2010
SUBMISSION 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 Grandfathe-ed
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-2010-0010-0029
Comment on FR Doc # 2010-14488

Submitter Information

Name: James R. Biery
Address:
3897 North Front Street
Harrisburg, PA, 17110
Email: jbiery@pabanker.com
Phone: 717-255-6911
Fax: 717-233-6362
Organization: Pennsylvania Bankers Association

General Comment

Attached please find comments from the Pennsylvania Bankers Association.

Attachments

IRS-2010-0010-0029.1: Comment on FR Doc # 2010-14488

https://fdms.erulemaking.net/fdms-web-agency/component/submitterInfoCoverPage?Call=P... 8/5/2010


James R. Biery
President, CEO & Treasurer
717.255.6911 (ph)

PENNSYLVANIA 717.233.6362 (Fax)
; jbiery@pabanker.com

August 4, 2010

Office of Consumer Information and Insurance Oversight
Department of Health and Human Services

Room 445-G Hubert H. Humphrey Building

200 Independence Ave. SW

Washington, DC 20201

Re: OCIIO-991-IFC, 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

Thank you for the opportunity to comment on the Interim Final Rules regarding grandfathered health
plans under the Patient Protection and Affordable Care Act. The Pennsylvania Bankers Associaticn is a
section 501(c)(6) trade association representing approximately 170 financial institutions serving
customers in the Commonwealth of Pennsylvania.

As an employer, PBA has less than 20 employees. In fact, most trade associations are small and medium
sized tax-exempt organizations. PBA and other small organizations are often captive to a small number
of health insurance providers because we do not have the economic clout of larger enterprises.

As an employer, PBA has purchased health insurance for our eligible employees on a fully-insured basis.
We do not have the resources or ability to self-insure as a means to control our health insurance costs and
benefits. PBA and many organizations like it will greatly benefit from the expanded options for health
insurance that will be available beginning in 2014 through the Exchange. The Exchange will allow the
small and medium-sized organizations to benefit from the economics of pooling that currently are not
available.

However, because the benefits of the Exchange will not be realized until 2014, most associations will
continue to experience annual cost increases and lack of control over actual coverage until 2014. As
such, the grandfathering of our existing coverage is extremely important, especially prior to the
establishment of a working Exchange system.

3897 North Front Street (17110) * PO Box 152 * Harrisburg, PA 17108 * Tel. (717) 255-6900 * FAX: (717) 233-1477 » www.pabanker.com

Professionals Dedicated to Your Success


We are concerned that the grandfather provisions outlined in the Interim Final Rules are too restrictive
and will cause many organizations to lose the grandfathering they expected. If forced to consider options
of a non-grandfathered plan before they have the benefit of an Exchange, we are concerned that they may
be priced out of the market and may even have to drop coverage — something they do not want to do and a
unintended result of health care 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 if an employer has over 10 employees and is completely
phased out if there are 25 or more employees. The credits are also phased out for employers with even
modest-sized compensation packages. So while these subsidies do provide assistance for some small tax-
exempt employers, their benefit is very limited.

Because many tax-exempt organizations like PBA are small in terms of total numbers of employees, and
because they generally cannot self-insure, they are often at the mercy of health insurance plans sold by
private carriers, These employers do not have much control over co-pays and cost-sharing. As such,
simple changes to plans beyond the control of these employers can cause their plans to lose grandfather
status. And since the Exchange is not currently in place, we anticipate that the prospect of finding new
affordable insurance that meets the new requirements of the Patient Protection and Affordable Care Act is
problematic at best. Further, in order to control costs so that health insurance can be purchased for
employees, we and others often need to work with our current insurance carriers to adjust copays and cost
sharing to the extent we can in order to afford coverage, especially in the current economic environment.

We are concerned that Interim Final Rules as currently drafted may force some organizations 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.

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

We also suggest that small and medium sized employers be allowed to change insurance carriers prior to
2014 and have their plans treated as grandfathers plans provided that provided they do not reduce the per-
employee amount they pay for insurance. This would allow them to maintain the level of coverage for
employees, but reap the benefit of a less expensive plan prior to the implementation of the Exchange.
Thank you for this opportunity to express our views on this important issue.

Sincerely,

Tisan i TS ery