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SEP 9 ae in
REG. [}94] 2-70
LEGAL PROCESSING DIVISION
PUBLICATION & REGULATIONS

BRANCH
As of: September 09, 2010

PUBLIC Status Posted

Posted: September 09, 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-2010-0010-0935
Comment on FR Doc # 2010-14488

Submitter Information

Name: Malcolm Cutler
Address:
15901 Hawthorne Blvd.
Suite 200
Lawndale, CA, 90260
Email: malcolm@cenbenefits.com
Phone: 310-370-5000
Fax: 310 370-5454
Submitter's Representative: Jane Harmann
Organization: Cutler Insurance Services, Inc.
Government Agency Type: Federal

Government Agency: HHS
—

General Comment

Please see attached file

Attachments

IRS-2010-0010-0935.1: Comment on FR Doc # 2010-14488

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


TO: Department of Health and Human Services

FROM: Malcolm Cutler Jr.

Cutler Insurance Services
DATE: August 17, 2010
VIA WEB: http://www. Regulations.gov

Grandfathered Health Insurance Plans: Changing Insurance Carriers and
Losing Grandfather Status

Some time last year the statement from President Barak Obama was “If you like your
current health insurance, you can keep it” as he was making his case for health
care reform. On June 17 2010, the Interim Final Rules for Group Health Plans and Health
Insurance Relating to Status as a Grandfathered Health Plan were published with Public
Comment allowed for 60 days — until today August 16, 2010. Our initial review of the
Interim Final Rules indicated that one of the Interim Final Rules, as proposed, losing
grandfathering by changing insurance carriers, is a no win proposition for employers:

-Employers that seek a change in insurance carriers to save costs and preserve benefits
lose their grandfathered status and incur the costs of government mandates.

-Employers who stay with their insurance carrier to save their grandfathered plan pay
higher costs than the competitive market place could offer by changing carriers.

We communicated this very negative result to our clients, and how we hoped that, with
implementation of the Affordable Care Act, the Act would not preclude competitive
bidding to save costs and benefits. Since today is the close of comment on the Interim
Final Rule on losing grandfathering for changing insurance carriers, we would like to
pose this question: Should an Employer lose Grandfathered Status simply by changing
insurance carriers?

To make the case we would like HHS (or the appropriate government agency) to review
the following client renewal and insurance carrier change.

We have a client that pays 50% of the employee cost for health insurance for their
employees. In June, the client received a 21% increase in rates from their insurance
carrier, effective August 1, 2010. With such a large increase, we did the usual market
survey for alternative plans, and in this particular case, we decided that since employees
would have to change insurance carriers and perhaps doctors, we would try to actually
increase the benefits to have the employees more comfortable in making the change.


When we got done with our market search, we changed insurance carriers, increased
the benefits for all employees, as discussed, AND all employees received a 30%
decrease from their renewal costs and a 12% reduction in costs they paid for the prior
year — A win win option for the employees and their employer. The question that we are
asking was the loss of grandfathering really intended to discourage such a changes? We
hope not.

As we completed our analysis for this employer, we realized that for the past 25 years,
through the insurance market place, we have been changing carriers and designing
benefits that has allowed us to say to our employer clients and their employees “If you
like your current insurance, you can keep it,” because we will work to keep your
benefits rich and costs contained through the competitive independent insurance market
place.

We have no problems with the relative changes in cost sharing, deductibles, and cuts in
benefits that forfeit grandfathering, but to close out the competitive market place Is a
mistake and we hope our client example indicates how big a mistake it is.