EXECUTIVE COUNCIL

815 Sixteenth Street, N.W. RICHARD L, TRUMKA ELIZABETH H. SHULER

Washington, D.C. 20008 PRESIDENT SECRETARY-TREASURER

(202) 637-5000

www.aflcio.org Gerald W. McEntee Michael Sacco Frank Hurt
Michael Goodwin William Lucy Robert A. Scardelietti
Michael J. Sullivan Harold Schaitberger Edwin D. Hill
Clyde Rivers Cecil Roberts William Burrus
James Williams Vincent Giblin William Hite
Larry Cohen Warren George Gregory J. Junemann
Robbie Sparks Nancy Wohiforth James C. Little
Rose Ann DeMoro Mark H. Ayers Richard P. Hughes Jr.
Matthew Loeb Randi Weingarten Rogelio “Roy” A. Flores
Diann Woodard Patrick D. Finley Malcolm B. Futhey Jr.
D. Michael Langford Robert McElrath Roberta Reardon
Baldemar Velasquez John W. Wilhelm Ken Howard
Bruce R. Smith Bob King General Holiefield
James Andrews Maria Elena Durazo

Submitted via email to: E-OHPSCA715.EBSA@dol.gov

August 27, 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-AB43

Re: Interim Final Rule Relating to Preexisting Condition Exclusion,
Lifetime and Annual Limits, Rescissions and Patient Protections

Docket ID EBSA-2010-0016
RIN 1210-AB43

Ladies and Gentlemen:

American Federation of Labor and Congress of Industrial Organizations

ARLENE HOLT BAKER
EXECUTIVE VICE PRESIDENT

Patricia Friend
R. Thomas Buffenbarger
Joseph J. Hunt

Leo W. Gerard

John Gage

Laura Rico

Capt. John Prater

Fred Redmond

Fredric V. Rolando
Newton B. Jones
DeMaurice F. Smith
James Boland

Lee A. Saunders

These comments are submitted on behalf of the AFL-CIO and its 57 affiliated unions in
response to the Interim Final Rule Relating to Preexisting Condition Exclusions, Lifetime and
Annual Limits, Rescissions and Patient Protections (“Rule”) issued jointly by the Department of

the Labor, Department of Treasury, and Department of Health and Human Services (the

“Departments”) on June 28, 2010.' Together with its community affiliate, Working America, the
AFL-CIO represents more than 11 million workers. Collectively, our unions negotiate health
benefits for almost 40 million workers, retirees and their family members.

The AFL-CIO, its affiliates, allied organizations and members have worked for decades to
reform our health care system. We were pleased to help gain passage of the Patient Protection

‘ The Interim Final Rule is at 75 Fed. Reg. 37188 (June 28, 2010).


and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010
(together, the “Affordable Care Act” or “Act”), legislation that makes progress toward quality,
affordable health care for all.

The Rule provides helpful guidance to unions, employers and plan sponsors in the four
areas it addresses, each offering important protections to participants. These protections, or
similar ones, are already provided under many collectively bargained health care plans, and, as
the Act provides, they should be available to all working families.

We commend the Departments for the speedy release of the Rule, as well as the other
interim final rules on the Affordable Care Act reforms that will become effective for plan years
beginning on and after September 23, 2010.

As we note below, there are some areas where additional guidance or clarification from
the Departments would be helpful to unions and plans as statutory reforms are implemented and
modifications are made to existing benefit programs.

Lifetime and Annual Limits (29 CFR §2590.715-2711)

The provisions of the Rule on the prohibition of lifetime and annual limits offer guidance
regarding the permitted “restricted annual limits” on essential benefits allowed for plan years
beginning after September 23, 2010 and before January 1, 2014.? The three year phase-in
recognizes the need for a transition period for plans that currently include annual limits and
establishes ceilings at reasonable levels.

The Rule should be clarified by addressing whether dollar limits on specific benefits,
rather than just an overall limit, are permitted.

We also suggest that additional guidance be provided with respect to the permissibility of
visit limits or other non-monetary limits. Because the Rule, both with respect to lifetime and
annual limits, refers only to “the dollar amount of benefits,” it is unclear whether other limits on
essential benefits are permitted or prohibited.

Rescissions (29 CFR § 2590.715-2712)

The Rule, consistent with the Act, includes a broad prohibition on rescissions and makes
clear that one key aspect of rescission is its retroactive effect. But, the Rule also appropriately
recognizes that the retroactive cancellation or discontinuance of coverage resulting from failure
to pay required contributions is not a rescission.

It would be helpful for the Departments to clarify the effect of the Rule on actions
currently permitted under existing COBRA regulations. Under those regulations, coverage may
be retroactively terminated if COBRA coverage is not in fact elected or the applicable premium
is not timely paid. See 26 CFR §54.4980B-6, Q&A-3 and §54.4980B-8, Q&A-S.

2 Section 2711(b) of the Public Health Service Act, added by Section 1001(5) of the Affordable Care Act,
authorizes the Departments to define the term “restricted annual limits.”


We appreciate the opportunity to comment on the Rule and we urge the Departments to
provide the clarifications suggested here in the final rule or other guidance that is issued.

Sincerely,

f LE A
/ Katin S: Feld:

Benefits and Social Insurance Policy Specialist