Page | of 1

REC IIPII2-16

SEP 7 AMG

LEGAL PROCESSING DIVISION

PUBLICATION & REGULATIONS
BRANCH As of: September 07, 2010

PUBLIC Status: Posted

Posted: September 07, 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 Grandfathered
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-2010-0010-0766
Comment on FR Doc # 2010-14488

SS

Submitter Information

Name: Keith Bura
Address:
10 S Riverside Plaza
Suite 800
Chicago, IL, 60606
Email: bura@associationforum.org
Phone: 312-924-7010
Organization: Association Forum Of Chicagoland

General Comment

Comments/Concerns are contained in the attached file.

Attachments

IRS-2010-0010-0766.1: Comment on FR Doc # 2010-14488

https://fdms.erulemaking.net/fdms-web-agency/component/submitterInfoCoverPage?Call=P..._ 9/7/2010


August 13, 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 Pians and Health Insurance
Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and
Affordable Care Act

On behalf of the Association Forum or Chicagoland, we appreciate the opportunity to comment on the
Interim Final Rules regarding grandfathered health plans under the Patient Protection and Affordable
Care Act. Association Forum or Chicagoland is a section 501(c)(6) individual membership organization
of more than 3,000 association executives and industry partners representing nearly 1,000 tax-exempt
organizations. Its members manage leading trade associations, individual membership societies, and
voluntary organizations around the Chicagoland area.

It is important to note that most of our members are small and medium sized tax-exempt organizations.
In fact, the average association has 11 employees and has the same obstacles to obtaining good,
affordable health insurance coverage confronting small businesses in general. The organizations that our
members represent are often captive to a small number of health insurance providers, and do not have the
economic clout of larger enterprises.

The vast majority of the organizations represented by our members purchase heath insurance for their
employees that is fully insured. They generally do not have the resources or ability to self-insure as a
means to control their health insurance costs and benefits. Most of these organizations 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 that our members
represent to benefit from the economics of pooling that is not currently 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 their existing coverage is extremely important, especially prior to the
establishment of a working Exchange system.

We are greatly concerned that the grandfather provisions outlined in the Interim Final Rules are too
restrictive and will cause many tax-exempt 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 bizarre result given the intent 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 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 control over copays 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, these
organizations often need to work with their current insurance carriers to adjust copays and cost sharing to
the extent they 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.

Association Forum of Chicagoland,

eich Bum

Keith Bura, CPA, CAE
Chief Financial and Operating Officer