American Cancer Society  Children’s Defense Fund/New York  Center for Working Families 

Community Service Society of New York  Metro New York Health Care for All Campaign 

New Yorkers for Accessible Health Coverage  New York Immigration Coalition 

Public Policy and Education Fund of New York/Citizen Action of New York 

Health Care for All New York 

c/o Elisabeth Ryden Benjamin, Community Service Society of New York 

105 E. 22nd Street, New York, New York 10010 

(212) 614-5461 

August 27, 2010 

Secretary Timothy Geithner 

Department of the Treasury 

 

Secretary Hilda Solis 

Department of Labor 

Secretary Kathleen Sebelius 

Department of Health and Human Services 

Office of Consumer Information and Insurance Oversight 

Department of Health and Human Services 

Attention: OCIIO-9994-IFC 

P.O. Box 8016 

Baltimore, MD 21244-1850 

Dear Secretary Sebelius: 

Health Care for All New York (HCFANY) writes to comment on the interim final rules 

implementing the Patient Protection and Affordable Care Act (ACA) provisions regarding 

preexisting conditions, lifetime and annual limits on benefits, rescissions, and patient protections. 

HCFANY is a statewide coalition of more than 100 organizations, which seek to achieve 

affordable, quality health care for all New Yorkers. 

Overall, we commend the Departments for the progress these interim final rules make in 

implementing the consumer protections of the ACA. However, we have concerns regarding four 

sections of the new regulations: the rules prohibiting preexisting conditions exclusions; the rules 

restricting annual limits; the rules limiting rescissions; and the rules regarding coverage of 

emergency services (patient protections). We will address these sections in the same order as the 

interim final regulations notice. 

Prohibition of Preexisting Conditions Exclusions (26 CFR § 54.9815-2704T, 29 CFR § 2590.715-

2704 and 45 CFR § 147.108)
www.hcfany.org Health Care For All New York Page 2 

 The ACA and these interim final rules prohibit preexisting conditions exclusions for 

group health plans or group health insurance coverage and individual health insurance coverage. 

The prohibition takes effect for plan or policy years beginning on or after January 1, 2014, but 

for enrollees under 19 years of age the prohibition becomes effective for plan or policy years 

beginning on or after September 23, 2010. 

HCFANY recommends: 

 The interim final regulation should be changed to require insurers to allow young people 

with preexisting conditions to enroll in coverage at any time during the year, for at least the first 

year, rather than requiring them to wait for an open enrollment period. This is a significant 

change in the law, opening coverage to many young people. Educating all of the eligible children 

and their families will take time. Covering children is a high priority under the ACA, and the 

statute should be interpreted to maximize their ability to take advantage of new eligibility. 

 We also recommend that HHS consider establishing a waiver process under which 

children can apply to enroll in coverage outside an open enrollment period. The Massachusetts 

legislature recently enacted an annual enrollment period (Section 8 of Chapter 288 of Acts of 

2010) that allows, in addition to the exemptions provided under ERISA, an additional 

opportunity for an individual to apply for a waiver from the restricted enrollment rule. The 

waiver allows individuals who inadvertently missed an open enrollment opportunity to purchase 

coverage, without allowing individuals to game the system. 

Lifetime and Annual limits (26 CFR § 54.9815-2711T, 29 CFR § 2590.715-2711, 45 CFR 

§ 147.126)

 The ACA and the interim final regulations generally prohibit annual or lifetime caps on 

the dollar value of health benefits. They allow insurers to establish a “restricted annual limit” on 

the dollar value of essential health benefits for plan years beginning prior to January 1, 2014. The 

interim final rules outline the following schedule of minimum permitted annual limits for this 

period: 

• For a plan (or policy) year beginning on or after September 23, 2010 but before 

September 23, 2011, $750,000; 

• For a plan (or policy) year beginning on or after September 23, 2011 but before 

September 23, 2012, $1,250,000; and 

• For plan (or policy) years beginning on or after September 23, 2012 but before January 1, 

2014, $2,000,000. 

HCFANY recommends: 

 We recommend that the interim final regulations be amended to increase the restricted 

annual limits and allow adjustments to these minimum limits in regions of the country with 

higher-than-average health care costs. In New York state, our constituent organizations have 

seen patients run up annual bills in excess of $1 million for certain cancer treatments, severe 
www.hcfany.org Health Care For All New York Page 3 

trauma, and intensive neonatal care for extremely premature infants. Accordingly, the restricted 

annual limit for plan or policy years beginning on or after September 23, 2010 but before 

September 23, 2011 should be raised to $1,000,000. The restricted annual limit for plan or policy 

years beginning on or after September 23, 2011 but before September 23, 2012 should be raised 

to $1,500,000. And the rules should be amended to create a process by which the Secretary of 

Health and Human Services (HHS) can raise the restricted annual limits in regions like New 

York with higher-than-average health care costs. 

 The interim final regulations should also be clarified to close two potential loopholes. 

Insurance companies could evade the prohibition on dollar value by adopting new limits to the 

volume of care covered. It should be made clear that insurance companies may not institute new 

limits to the volume of care as a proxy for annual limits on the dollar value of care. Additionally, 

the rules should make it clear that annual limits on a category of service, such as a dollar limit on 

the amount of hospital care that will be covered in a year, is an impermissible violation of the 

prohibition on annual limits. 

 The preamble to the regulations states that the Secretary of HHS will be issuing further 

guidance related to the scope and process for applying for a waiver of the limited annual benefits 

rule. We urge the Secretary, in this guidance, not to allow providers of “mini-med” plans to 

continue selling limited benefit plans with annual limits far below the restricted annual limits set 

out in this rule. The recession and related job loss have left many consumers out of work for long 

periods of time, leading to loss of work-related coverage; some consumers have used up the 

coverage they are permitted through COBRA or state mini-COBRA laws. These economic 

difficulties make consumers extremely vulnerable to being taken advantage of by companies that 

charge premiums while offering illusory coverage with very low annual limits. The ACA’s ban 

on annual and lifetime limits is intended to protect consumers from these predatory plans, and 

the rules should not allow companies to continue to offer coverage that does not protect 

consumers. 

Prohibition on Rescissions (26 CFR § 54.9815-2712T, 29 CFR § 2590.715-2712, 45 CFR 

§ 147.128)

 The ACA and these interim final rules limit rescission of insurance coverage to cases of 

fraud, intentional misrepresentation of material fact, and failure to pay premiums. They also 

require that a plan or insurance issuer provide at least 30 days advance written notice before 

coverage may be rescinded. 

HCFANY recommends: 

HCFANY believes that the interim rules would allow insurance companies too much 

discretion in determining whether a consumer has committed fraud or an intentional 

misrepresentation of fact. HHS should consider providing a clear standard explaining that the 

burden of proof is on the plan or insurer when determining whether a consumer’s fraudulent act 

or misrepresentation was intentional. Insurers should be required to include allegations of the 

facts they will rely on to justify the proposed rescission in the written notice. Further, we urge 
www.hcfany.org Health Care For All New York Page 4 

HHS to outline a process requiring external review of the determination by an impartial party 

before the rescission takes effect. 

Patient Protections (26 CFR § 54.9815-2719AT, 29 CFR § 2590.715-2719A, 45 CFR § 147.138)

 The ACA and the interim final regulations require a health plan or coverage that provides 

any benefits for emergency services to do so without requiring prior authorization and without 

regard to whether the provider is in-network with respect to emergency services. A plan with a 

network of providers that provides benefits for emergency services may not impose any 

administrative requirement or limitation on benefits more restrictive for out-of-network 

emergency services than that in effect for in-network emergency services. 

HCFANY recommends: 

 The ACA’s protections regarding coverage of emergency services are designed to protect 

consumers from receiving excessive bills for emergency services received without prior 

authorization or from out-of-network providers. They are also designed to eliminate the 

uncertainty that consumers face when forced to visit an out-of-network emergency room. The 

interim final rules regarding coverage of emergency services are well-designed to protect 

consumers from these common experiences. 

 The rules’ failure to prohibit balance billing, however, leaves consumers open to 

receiving unaffordable bills from providers and prevents consumers from knowing, in advance, 

what level of debt they will incur during an emergency visit to an out-of-network provider. 

HCFANY urges HHS to adjust the rules to prevent or reduce balance billing by out-of-network 

providers for emergency services. 

 Hospital billing reform measures in other sections of the ACA show the intent of 

Congress to make hospital billing fairer to consumers, but these protections are too narrowly 

drawn to protect insured consumers from balance billing by out-of-network emergency 

providers. Section 9007 of the ACA provides new requirements for tax-exempt hospitals 

regarding financial assistance and billing. This section prohibits tax-exempt hospitals from using 

gross charges when billing financial assistance-eligible individuals for emergency care; instead, 

the rule requires that they charge these individuals “not more than the amounts generally billed 

to individuals who have insurance covering such care.” 

 Similarly, the interim rules under consideration should include a requirement that 

hospitals charge out-of-network patients no more than the amounts generally billed to in-network 

patients, or patients covered by Medicare. New York state has adopted this approach in our 

hospital financial assistance law for uninsured patients and insured patients who have hit their 

maximum benefits caps. Alternatively, a patient’s bill could be based on the rate the plan or 

issuer is required to pay under these rules. Hospitals should not be permitted to bill consumers 

protected by this statute using gross charges. 
www.hcfany.org Health Care For All New York Page 5 

Further, if a facility negotiates an agreement with an insurance plan to provide services at 

in-network rates, all providers practicing at the facility should be required to accept the 

negotiated rates. The rules should also clarify that any state laws that provide more protection 

for consumers in this regard are not pre-empted by the ACA. 

Thank you for considering our comments. If you have any questions, please contact 

Elisabeth Benjamin at ebenjamin@cssny.org or at (212)614-5461 or Carrie Tracy at 

ctracy@cssny.org or at (212)614-5401. 

Sincerely, 

Elisabeth Benjamin, MSPH, JD 

Vice President of Health Initiatives 

Community Service Society of New York 

Carrie Tracy 

Policy Associate 

Community Service Society of New York