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, Maryland 21244-1850 

Internal Revenue Service 

P.O. Box 7604 Ben Franklin Station 

Washington, DC 20044 

Attention: REG-118412-10 

Via: www.regulations.gov 

Office of Health Plan Standards and 

Compliance Assistance 

Employee Benefits Security Administration 

U.S. Department of Labor 

200 Constitution Avenue NW 

Washington, DC 20210 

Attention: RIN1210-AB42 

Comments of Consumers Union of U.S., Inc., on

“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” 

File Code OCIIO–9991–IFC/RIN 1210–AB42/REG–118412–10

Introduction

Consumers Union, the independent, nonprofit publisher of Consumer Reports,

1

 is pleased 

to provide the following comments to the U.S. Department of Labor, Department of 

Health and Human Services and Internal Revenue Service (“the Departments”). Our 

comments address the Departments’ interim final rules for grandfathered health plans. 

Section 1251 of the Affordable Care Act, as modified by section 10103 of the Affordable 

Care Act, and Section 2301 of the Reconciliation Act, specifies that certain plans or 

 

1

 Consumers Union is a nonprofit organization chartered in 1936 under the laws of the State of New York 

to provide consumers with information, education and counsel about goods, services, health, and personal 

finance. Consumers Union's publications have approximately 8.3 million combined paid circulation and 

carry no advertising and receive no commercial support. Consumers Union's income is solely derived from 

the sale of Consumer Reports and ConsumerReports.org, its other publications and from noncommercial 

contributions, grants and fees. In addition product testing, Consumer Reports and ConsumerReports.org 

regularly carry articles on health, product safety, marketplace economics and legislative, judicial and 

regulatory actions that affect consumer welfare. 
2

coverage existing as of the date of enactment (March 23, 2010) shall be termed 

grandfathered health plans and are exempt from certain provisions of the Act. 

Consumers Union supports most aspects of the proposed rule. We have provided specific 

recommendations to strengthen the proposed rules in a separate comment letter signed by 

multiple consumer organizations. Those comments addressed the conditions under which 

changes in plan structure, a plan’s provider network and a prescription drug formulary 

should result in cessation of grandfathered status; clarified what happens if a plan stops 

offering dependent coverage and other issues. 

The purpose of these supplemental comments is to provide specific support for the 

treatment of cost-sharing in the proposed rule and expanded recommendations with 

respect to the proposed model notice. 

Support for Rules Governing Loss of Grandfathered Status

Consumers Union supports the proposed rule with respect to the cost-sharing changes, 

elimination of benefits, and changes to employer contribution rates that would lead to a 

loss of grandfathering status. 

The proposed rule protects consumers by setting reasonable limits on a health plan’s 

ability to maintain grandfathered status. More importantly, these limits are well-defined – 

avoiding (or at least minimizing) interpretation problems later. 

We believe these rules balance fairly the potential benefits of belonging to a 

grandfathered plan against the benefits enrollees would receive under non-grandfathered 

plans. For example, if a plan sponsor improves the benefits offered under a grandfathered 

plan, the interim rules allows the plan retain its grandfathered status. 

Alternate Language For The Grandfathered Plans “Model Notice”

Under the proposed rules, grandfathered health plans are required to provide a disclosure 

notice to all participants and beneficiaries about the grandfathered status of the plan. 

This notice is to be included in any plan materials provided to a participant or beneficiary 

describing the benefits provided under the plan or health insurance coverage. The 

Department of Labor estimates that 56.3 million policy holders in private employer plans, 

16.2 million policy holders in state and local governmental plans and 4.3 million policy 

holders in non-group plans will receive these notices. 

The interim rules provide model language which would satisfy this notice requirement, 

although plans are not required to use it. 

Reflecting the widespread impact of these notices, Consumers Union recommends that 

the proposed notice be reworked to make it more understandable and “actionable.” For 

example, the model language could be modified to read as follows: 
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This health plan is a “grandfathered health plan” under the 2010 Affordable Care 

Act. A grandfathered health plan is allowed to preserve certain features of health 

coverage that were already in effect when that law was enacted. 

IMPORTANT: Being in a grandfathered health plan means that your coverage 

MAY EXCLUDE certain protections that apply to other plans, for example, the 

requirement that preventive health services be provided without any patient cost 

sharing. Your health plan administrator will provide a complete list of the 

protections are not required and, hence, not included in this plan. Any 

unanswered questions can also be directed to: [For ERISA plans, insert: the 

Employee Benefits Security Administration, U.S. Department of Labor at 1–866–

444–3272 or www.dol.gov/ebsa/ healthreform. This website has a table 

summarizing which protections do and do not apply to grandfathered health 

plans.] [For individual market policies and nonfederal governmental plans, insert: 

The U.S. Department of Health and Human Services at www.healthreform.gov.] 

As indicated in the example, Consumers Union recommends that the grandfathering rules 

include a new obligation for the health plan administrator to spell out specifically which 

ACA consumer protections are not included in their grandfathered plan. This helps the 

consumer in two ways. One, it directly provides the piece of information that consumers 

need. Two, it provides the real “bottom line” for consumers. Many large employer plans 

may decide to include all the essential benefits or may provide first dollar coverage of 

preventive services. If consumers are to be helped by this notice, it must spell out the 

specific protections that are missing from their grandfathered plans, but should not list 

provisions that—even if not required of grandfathered plans—happen to be present in 

their plan anyway. Consumers should not have to wade through a generic notice with no 

easy way to tell if it applies to them or not. 

Consumers Union also recommends adding formatting requirements to the proposed 

rule. Formatting of disclosures can have a powerful effect on their use by consumers.2 

For example, require 12-point type and an outline around the statement or other 

approach that highlights the importance of the information. The capitalization and 

bolding requirements (see example above) should also be added to the final rule, or at 

least incorporated into the model notice. 

Thank you for the opportunity to comment on 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. 

Respectfully submitted, 

DeAnn Friedholm 

Director, Health Reform 

Consumers Union 

 

2 See, for example, Philip Keitel, Consumer Testing Informs Policy: Overdraft Regulation as a Case Study, 

Federal Reserve Bank of Philadelphia, June 2010.