American Association of Tissue Banks 

August 5,2010 

Office of Consumer Information and Ins~.~rance Oversight 

U.S. Department of Health and Human Services 

Attention: OC110-9991-IFC 

P.O. Box 8016 

Baltimore, MD 21 244-1 850 

- Re: OCIIO-9991-IFC 

The lnterim 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 

Dear Madams and Sirs: 

The American Association of Tissue Banks [hereinafter referred to as the "AATB" or the 

"Association"] subrr~its these comments in response to the Department of Health and 

Human Services (HHS) publication of the above-captioned document. The notice of 

these Interim Final Rules appeared in the June 17, 2010 issue of the Federal Register 

[75 Federal Register 34537-345701. 

The Association understands that these lnterim Final Rules were effective on June 14, 

2010. They are intended to implement the rules for grandfathering group health plans 

and health insurance coverage in the group and individual markets under the provisions 

of the Patient Protection and Affordable Care Act (Public Law 11 1-148) enacted on 

March 23, 2010. 

THE INTEREST OF THE AATB 

The American Association of Tissue Banks (AATB) is a professional, non-profit, 

scientific and educational organization. It is ,the only national tissue banking 

organization in the United States, and its membership totals more than 110 accredited 

tissue banks and 1,000 individual members. These banks recover tissue from more 

than 30,000 donors and distribute in excess of two million allografts for more than one 

million tissue transplants performed annually in the U.S. The overwhelming majority of 

the human tissue distributed for these transplants comes from AATB-accredited tissue 

banks. - 

1320 OLD CHAIN BRIDGE ROAD, SUITE 450 1 MCLEAN, VIRGINIA 22101 DONATE ' 

PHONE: 703-827-9582 1 FAX: 703-356-2 198 

WWW.AATB.ORG I AATB@AATB.ORG 
Office of Consumer Information and Insurance Oversight 

U.S. Department of Health and Human Services 

Attention: OC110-9991-IFC 

August 5,201 0 

Page 2 

The Association was founded in 1976 by a group of doctors and scientists who had 

started in 1949 our nation's first tissue bank, ,the United States Navy Tissue Bank. 

Recognizing the increasing use of human tissue for transplant, these individuals saw 

the need for a national organization to develop standards, promote ethics and increase 

donations. 

Since its beginning, the AATB has been dedicated to improving and saving lives by 

promoting the safety, quality and availability of donated human tissue. To fulfill that 

mission, the AATB publishes standards and accredits tissue banks. It certifies 

personnel and operates a tissue network. The Association also interacts with regulatory 

agencies and conducts educational meetings. 

Like the majority of our fellow non-profit, tax-exempt organizations, the AATB is a small 

association with less than 10 full-time employees. Like most small businesses, 

obtaining good, affordable health insurance coverage is an annual and costly challenge. 

This year, supplying health insurance for less than 10 employees is consuming about 

eight percent (8%) of our annual budget. The AATB and tens of thousands of 

associations and organizations nationwide, which represent hundreds of thousands of 

working Americans, do not have the economic clout of larger enterprises. We are 

dependent on a small number of health insurance providers. We are, therefore, 

extremely interested in the above-captioned Interim Final Rules. 

COMMENTS 

As noted in the preamble, "These interim final regulations are designed to ease the 

transition of the healthcare industry into the reforms established by the Affordable Care 

Act by allowing for gradual implementation of reforms through a reasonable 

grandfathering rule." 

However, these lnterim Final Rules also provide that a group health plan or health 

insurance coverage no longer will be considered a grandfathered health plan if a plan 

sponsor or an issuer makes one or more of several different changes. These include: 

Eliminating all or substantially all benefits to diagnose or treat a particular 

condition; 

Increasing a percentage cost-sharing requirement (such as coinsurance) 

above the level at which it was on March 23, 2010; 
Office of Consumer Information and Insurance Oversight 

U.S. Department of Health and Human Services 

Attention: OC110-9991-IFC 

August 5,2010 

Page 3 

Increasing fixed-amount cost-sharirrg requirements other than copayments 

by a total percentqge measured from March 23, 2010 that is more than the 

sum of medical inflation and 15 percentage points; 

Increasing copayments by an amount that exceeds the greater of certain 

measured percentages; 

For a group health plan or group health insurance coverage, an employer 

or employee organization decreases its contribution rate by more than five 

percentage points below the contribution rate on March 23, 2010; or 

With respect to annual limits, a group health plan, or group or individual 

health insurance coverage imposes an overall annual limit on the dollar 

value of benefits; adopts a new, first-time overall annual limit at a dollar 

value that is lower than the dollar value of the lifetime limit on March 23, 

2010; or decreases the dollar value of the annual limit regardless of 

whether the plan or health insurance coverage also irrlposes an overall 

lifetime limit on the dollar value of all benefits. 

The vast majority of small associations, businesses and organizations purchase 

employee health insurance that is fully insured. They generally do not have the 

resources or the ability to self-insure as a means to control their health insurance costs 

and benefits. Most of these firms would benefit greatly from the expanded options for 

health insurance that will be available beginning in 2014 through the exchanges. The 

exchanges will allow small and medium-sized organizations to benefit from the 

economies of scale of pooling that are not currently available. 

However, because the benefits of the exchanges will not be realized until 2014, most 

small associations, businesses and organizations will continue to experience arlnual 

cost increases and coverage problems until 2014. Consequently, for these firms, the 

grandfathering of their existing coverage is extremely important, especially prior to the 

establishment of working exchanges. 

Like many other small ,firms, the AATB is greatly concerned that the provisions outlined 

in the Interim Final Rule are too restrictive and will cause many tax-exempt 

organizations to lose the grandfatherirrg benefits that they need and expect. If forced to 

consider options of a non-grandfathered plan before they have the benefit of an 

exchange, we share the concerns that many associations, business and orgarlizations 
Office of Consumer Information and Insurance Oversight 

U.S. Department of Health and Human Services 

Attention: OC110-9991-IFC r 

August 5,2010 

Page 4 

may be priced out of the market. Some could even be forced to seriously curtail or to 

drop coverage. Given its rationale and intent, this would be an extren~ely tragic, bizarre 

and unintended byproduct of the Patient Protection and ~ffordable Care Act. We 

believe that HHS does not intend or want this to happen. 

There are subsidies available for small employers to help offset the costs of providing 

insurance. However, these credits are very limited. They begin to phase out if an 

employer has over 10 employees, and they completely phase out if there are 25 or 

more employees. The credits are also phased out for employers with even modestsized compensation packages. So while these s~~~bsidies do provide assistance for 

some small tax-exempt employers, their benefit is very limited. 

As noted previously, many tax-exempt organizations are small in terms of finances and 

numbers of employees. Because they generally cannot self-insure, they are at the 

mercy of the health insurance plans sold by private carriers. These employers have 

little, if any, control over copayments and cost sharing. Consequently, simple changes 

to their health insurance plans can cause the plans to lose the grandfathered status. 

Since exchanges will not be available until 2014, we anticipate that finding affordable 

health insurance, which meets the requirements of the new Patient Protection and 

Affordable Care Act, will be a major problem for firms like the AATB. For the next 

several years, small associations, businesses and organizations will need to adjust their 

health insurance plans to control costs and to provide affordable coverage. This will be 

necessitated by the current economic environment. 

The AATB is very concerned that lnterim Final Rules, as currently drafted, may force 

some firms to make the difficult and undesirable choice of canceling health care 

coverage if grandfather status is revoked, especially before the exchanges are in place. 

This is a very real concern, and in recent years significant modifications and 

cancellations have occurred due to rising health care costs. 

The current health insurance n~arketplace is in a state of flux. The Patient Protection 

and Affordable Care Act is already initiating major changes, and our nation's present 

economic climate are further complicating our health insurance system. It is imperative, 

therefore, that the lnterim Final Rules be as lenient, flexible and reasonable as possible, 

especially for small associations, businesses and organizations. The several different 

changes outlined above, under which a plan would no longer be considered a 
k I &. 5. 

Office of Consumer Information and Insurance Oversight 

U.S. Department of Health and Human Services 

$: Attention: OC110-9991-IFC 

August 5,2010 

Page 5 

grandfathered health plan, do not meet these requirements. They will not "ease the 

transition," and they do not constitute "a reasonable grandfathering rule." They30nly 

exacerbate an already complicated and over-burdened situation. 

For the transition period before &the exchanges can be established, the AATB would 

recommend that small and medium-sized employers be allowed to make cost-saving 

changes to copayments and cost sharing, provided they do not reduce the peremployee amount or percentage that they paid for insurance on March 23, 2010. This 

would help these organizations adjust and preserve coverage in anticipation of greater 

reform and options that will begin in 2014. 

We also recommend that small and medium-sized employers be allowed to change 

insurance carriers prior to 2014 and have their plans treated as grandfathered plans 

provided that they do not reduce the per-employee amount or percentage that they paid 

for insurance on March 23, 2010. This would allow small associations, businesses and 

organizations to maintain the level of coverage for employees, and perhaps reap the 

benefit of a less expensive plan prior to the implementation of the exchanges. 

I thank you in advance for yol.lr time and consideration of our comments. This is an 

extremely important issue for the AATB and similar-sized organizations. If you have 

any questions, or if there is any additional information that we can provide, I hope you 

will contact us. 

With best wishes.