August 26, 2010

The Honorable Kathleen Sebelius

Secretary

U.S. Department of Health & Human Services

200 Independence Avenue, S.W.

Washington, D.C. 20201

The Honorable Hilda Solis

Secretary

U.S. Department of Labor

200 Constitution Ave., N.W.

Washington, D.C. 20210

The Honorable Timothy Geithner

Secretary

U.S. Department of the Treasury

1500 Pennsylvania Avenue, N.W.

Washington, D.C. 20220

Dear Secretaries Sebelius, Solis, and Geithner: 

AARP is pleased to comment on the Interim Final Rule (IFR) published on June 28, 

2010, in the 3TFederal Register3T implementing certain insurance and patient protection 

provisions of the Patient Protection and Affordable Care Act (ACA). Specifically, the 

IFR, jointly published by the Departments of the Treasury, Labor and Health and Human 

Services, addresses the provision of the ACA that prohibits preexisting condition 

exclusions first for children under 19 years of age and then, effective for plan or policy 

years beginning on or after January 1, 2014, for all individuals. The IFR also addresses 

the provisions of the ACA that restrict lifetime and annual dollar limits on benefits, limit 

rescissions and provide for certain patient protections such as direct access to primary 

care providers and hospital emergency services without prior authorization. 

The provisions being implemented by this IFR apply in general to group health plans and 

health insurance coverage in the group and individual market. Congress included these 

protections in the ACA to bring an end to practices by issuers and plans that 

inappropriately limit enrollees’ access to covered services and expose them to significant 

out-of-pocket costs. The resulting gaps in coverage can discourage utilization of needed 

medical care and adversely affect health outcomes. They may also result in crushing 

financial burdens for patients and their families. 
Secretaries Sebelius, Solis, and Geithner

August 26, 2010

Page 2

AARP commends the Departments for their efforts to implement these provisions of the 

ACA consistent with the intent of the statute, on a timely basis and in a way that 

anticipates the complexity of applying the different requirements to different coverage 

situations. The following comments on specific provisions of the IFR reflect AARP’s 

interest in improving the effectiveness of the implementation of the ACA’s consumer 

protections and enhancing consumer understanding of how the enactment of health 

reform affects their coverage options.

3TPHS Act Section 2711, Lifetime and Annual Limits

Section 2711 of the ACA prohibits annual limits on the dollar value of essential health 

benefits generally but allows “restricted annual limits” with respect to essential health 

benefits for plan or policy years beginning before January 1, 2014. Grandfathered 

individual market policies are exempt from this provision. In defining “restricted annual 

limits,” the ACA requires the implementing Departments to ensure that access to needed 

services is made available with a minimal impact on premiums. 

The IFR clarifies that section 2711 does not prevent a plan or issuer from excluding all 

benefits for a condition, but if any benefits are provided for a condition, then no annual 

limits can be imposed so long as the benefits are considered essential health benefits. 

Also noted is that “other requirements of Federal or State law may require coverage of 

certain benefits.”

Given that plans and issuers are unlikely to have guidance for some time from the 

implementing Departments that specifies what items and services are included under 

“essential health benefits” (beyond the required broad statutory categories of services), 

AARP is concerned that plan enrollees (meaning participants and beneficiaries of a group 

health plan or subscribers in the case of an individual policy), may be confused as to what 

benefits are and are not subject to an annual limit. Will an enrollee know, for example, 

that the State in which he or she lives requires insured plans to include coverage for 

treatment of substance abuse or alcohol abuse while the status of such services as 

essential health benefits may not yet be determined? Other examples of benefits that are 

often subject to annual benefit limits include bone marrow treatments, reconstructive 

surgery, cancer and HIV treatments, and infertility treatments. These treatments can be 

quite costly to consumers and for those with specific conditions can have a detrimental 

impact on a person’s economic security if health insurance no longer covers them.

Accordingly, we urge the Departments to provide more specific clarification on the 

meaning of condition-based exclusions. Consistent with the presentation of this IFR, 

addressing this issue in a question/answer format may be most helpful.

To meet the goals of ensuring access to essential health benefits while mitigating the 

potential for premium increases that may result from new limits on enrollee cost-sharing 

responsibilities, the Departments have provided in this IFR for a phased elimination of 

annual limits on the dollar value of benefits. AARP believes that the dollar thresholds for 

annual limits established by the IFR, rising from $750,000 effective for plan or policy
Secretaries Sebelius, Solis, and Geithner

August 26, 2010

Page 3

years beginning on or after September 23, 2010 to $2 million for the last year of the 

transition, are reasonable. 

The IFR also provides that for plan or policy years beginning before January 1, 2014, the 

Secretary may establish a program under which annual limit restrictions may be waived if 

compliance with those limits would result in a significant decrease in access to benefits 

under the plan or coverage or would significantly increase its premiums. The preamble 

also advises that “guidance from the HHS regarding the scope and process for applying 

for a waiver is expected to be issued in the near future.” AARP agrees that a temporary 

waiver may be warranted for an issuer or group health plan for which the restricted 

annual limits would cause a significant premium increase or otherwise reduce the value 

of coverage. We look forward to the forthcoming guidance detailing the waiver process.

We also urge, however, that such guidance require plans or issuers that receive waivers to 

provide adequate notice to enrollees as well as include in that notice the plan’s 

justification that, without such a waiver, a premium increase or other decrease in value of 

the coverage would be unavoidable. In addition, we urge that the requirements for waiver 

eligibility be clearly specified and published in the 3TFederal Register3T and the process 

itself be publicly transparent.

3TPHS Act, Section 2712, Prohibition on Rescissions 

Under section 2712 of the PHS Act, as added by the ACA, a group health plan, or a 

health insurance issuer offering group or individual health insurance coverage, must not 

rescind coverage except in the case of fraud or an intentional misrepresentation of a 

material fact. This requirement applies to new and grandfathered plans and coverage. 

AARP commends the Departments for emphasizing in this IFR that the statute’s 

requirement related to rescissions establishes a federal floor that will offer far greater 

protections than many state laws. As noted in the rule’s preamble, “Under the new 

standard for rescissions . . . plans and issuers cannot rescind coverage unless an 

individual was involved in fraud or made an intentional misrepresentation of material 

fact.” AARP supports the inclusion in the IFR of a clarification that other requirements of 

Federal or State law may apply in connection with a rescission or cancellation of 

coverage beyond the standards established in section 2712 if they are more protective of 

individuals.

AARP also commends the Department for its implementation of the ACA’s notice 

requirement with respect to rescissions. Under the IFR, a group health plan, or a health 

insurance issuer offering group health insurance coverage, will have to provide at least 30 

calendar days advance notice to an individual before coverage may be rescinded. This is 

a reasonable time for notice given the new standard that restricts rescissions to instances 

of intentional misrepresentation or fraud. AARP will be very interested in future 

guidance issued by the Departments related to any notice requirements for cancellations 

of coverage other than in the case of rescission and urge that the guidance be developed 

with the goal of providing timely, clearly readable and easily understood (i.e., plain 

English) content to affected persons. As with the Health Insurance Portability and 
Secretaries Sebelius, Solis, and Geithner

August 26, 2010

Page 4

Protection Act, AARP recommends that the rules protect individuals who may not 

receive the required notice so that they have sufficient opportunity to enroll in other 

coverage without losing portability protection.

3TPHS Act Section 2719A, Patient Protections/Emergency Services

Section 2719A of the PHS Act, as added by the ACA, provides that a group plan and an 

issuer covering emergency services do so without the individual or the health care 

provider having to obtain prior authorization (even if the emergency services are 

provided out of network). “Emergency services” means a medical screening examination 

that meets the prudent layperson standard. For a network plan or coverage, the plan or 

issuer may not impose any limitation on benefits for out-of-network emergency services 

that is more restrictive than the requirements or limitations that apply to in-network 

emergency services. This provision does not apply to grandfathered health plans. 

AARP believes that the Departments have provided for implementation rules of this very 

important patient protection that seek to recognize the varying types of plan and issuer 

characteristics, with their differing relationships to hospital emergency departments that 

may or may not be part of their networks. Balance billing for hospital emergency services 

that are obtained out of a plan’s network can lead to significant financial burdens for 

patients even if circumstances required that they obtain emergency medical services from 

an out-of-network hospital or in a non-preferred provider tier for which their plan 

imposes significant cost-sharing responsibility. The IFR seeks to provide a reasonable 

standard for group health plans or issuers in reimbursing out of network providers to 

assure against excessive balance billing of the patient. This new patient protection will be 

limited in its effect, however, if enrollees are not fully aware of their potential out-ofpocket liability. We urge that the Departments require that plans and issuers make the 

consequences of using out of network emergency department services clear (using plain 

English explanations) in a notice that is provided to all plan enrollees and that is also 

included as part of a summary plan description or similar plan document. The notice 

requirements should provide standards for when notice in languages other than English 

must be provided. 

Thank you for the opportunity to comment on these important issues. If you have any 

questions, please feel free to contact Nora Super of our Federal Government Relations 

staff at (202) 434-3770.

Sincerely, 

David Certner

Legislative Counsel and Legislative Policy Director

Government Relations and Advocacy