August 16, 2010 

Office of Health Plan Standards and Compliance Assistance 

Employee Benefits Security Administration 

Room N-5653 

U.S. Department of Labor 

200 Constitution Avenue NW 

Washington, DC 20210 

Attention: RIN 1210-AB42 

Re: Interim Final Rules for Grandfathered Health Plans Under the Patient Protection and 

Affordable Care Act 

Position: In the Patient Protection and Affordable Care Act implementation process, allow plan 

sponsors flexibility to appropriately design and modify health care benefits to ensure the ability 

to continue to deliver high-value health care to employees and their dependents. 

Dear Sir or Madam: 

The National Business Coalition on Health (NBCH) appreciates the opportunity to comment 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), 

which were issued by the Departments of Labor, Health and Human Services, and Treasury on 

June 17, 2010 (75 Fed. Reg. 34538). It is our understanding that these comments will be shared 

with the Departments of Treasury and Health and Human Services, and we appreciate the time 

and consideration given to our following comments. 

In terms of background, NBCH is comprised of a national network of state and local health 

coalitions, which represent 7,000 public and private employers, namely self-insured employers, 

who voluntarily provide health insurance to 25 million Americans. The cornerstone of our 

health care policy platform is to ensure our nation has a sustainable, accessible, and affordable 

high quality health care delivery system. We firmly believe that the more knowledgeable and 

accountable providers and consumers, the more stable and predictable our health care system 

will be. 

NBCH and our member employer coalitions have a long history of value-based purchasing of 

health care and working as an organization, namely though the eValue8 health plan performance 

evaluation instrument, to encourage member coalitions, employers and providers to collaborate 

at the local, regional, and national level to improvement in the quality, safety, and efficiency of 

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health care. A transparent health care system in which the price and outcomes of standardized 

measures is available to the public is essential to our national, as well as our local coalition 

efforts to improve the quality and value of health care. It is vitally important that our member 

coalitions, their employer members and the plans that they work with have the flexibility to 

appropriately design and modify health care benefits to ensure the ability to continue to deliver 

high-value health care to employees and their dependents. 

In terms of NBCH’s concerns, PPACA specifies that group health plans or insurance coverage 

existing on the date of enactment (March 23, 2010) are not required to comply with certain plan 

requirements under PPACA. These include the requirement for coverage of preventive care at no 

cost to the participant or insured. However, PPACA does not address at what point changes to 

such group health plan or health insurance coverage are significant enough to cause the plan or 

health insurance coverage to cease to be a grandfathered plan, leaving that question to regulatory 

guidance which currently seems to be ambiguous. In general, the pending rules provide that 

grandfather plans will lose their status if “they choose to make significant changes that reduce 

benefits or increase costs to consumers.” These include rules with respect to changing benefits, 

employee cost sharing and employer contributions but the specific conditions are unclear. 

Please know that NBCH supports the Obama Administration’s goal that Americans should be 

able to keep the coverage they have. However, the pending rules regarding grandfathered health 

plan status are likely to have just the opposite effect. By imposing strict and complicated 

limitations on what employers can do to manage the design of their benefit plans, many 

employers are likely to elect foregoing grandfather status altogether. 

As an example, NBCH believes that a grandfathered plan should be permitted to make changes 

to provider networks and/or prescription drug formularies without losing grandfathered status 

since these modifications are essential to plan efforts to deliver reliable and efficient health care 

to participants. We suggest guidance clarifying whether a plan may make these changes without 

jeopardizing grandfathered status. Obviously an important contingency is that such changes do 

not result in the elimination of all, or substantially all, services needed to treat a covered benefit 

under the plan. 

We also suggest clarification on whether a plan can change from an insured plan to a self-insured 

plan, without negatively affecting its grandfathered status. NBCH believes that it is imperative 

that a plan should not lose grandfathered status merely by changing the model by which it is 

financed, particularly since plan financing is largely unrelated to a beneficiary’s plan experience. 

PPACA also includes several provisions regarding employee wellness programs. We also 

suggest additional guidance regarding whether a plan may take advantage of these wellness plan 

provisions without jeopardizing grandfathered plan status, as well as provisions intended to 

encourage plans to adopt wellness programs, and provisions designed to allow for increased 

participant rewards and incentives. 

Given the importance of grandfathered status to many of our coalition members and their 

employer members, the absence of any statement in the PPACA rules regarding plans’ voluntary 

compliance with PPACA provisions, including changes to plan provider networks, prescription 

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drug formularies and wellness provisions, our coalitions and their employers are hesitant to make 

certain changes to their plans until there is additional guidance and compliance information, 

particularly relative to the issues listed above. . 

Thank you for your consideration of these comments. If you have any questions, please do not 

hesitate to contact me at awebber@nbch.org, or 202.775.9300. 

Sincerely, 

Andrew Webber 

President and CEO 

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