December 17, 2010 

Office of Consumer Information and Insurance Oversight 

U.S. Department of Health & Human Services 

Room 445-G, Hubert H. Humphrey Building 

200 Independence Avenue, SW 

Washington, DC 20201 

Attn: OCIIO-9991-IFC2 

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 

Attn: RIN 1210-AB42 

Internal Revenue Service 

CC:PA:LPD:PR (REG-118412-10) 

Room 5205 

P.O. Box 7604, Ben Franklin Station 

Washington, DC 20044 

RE: Amendment to the Interim Final Rules for Group Health Plans and 

Health Insurance Coverage Relating to Status as a Grandfathered 

Health Plan under the Patient Protection and Affordable Care Act, 

Request for Comment; 75 Federal Register 70114, November 17, 2010 

Dear Director Angoff, Assistant Secretary Borzi and Deputy Commissioner Miller: 

AARP is pleased to comment on the Department’s Amendment to the Interim Final 

Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a 

Grandfathered Health Plan under the Affordable Care Act (ACA). This Amendment, 

published in the Federal Register on November 17, 2010, by the Departments of 

Treasury, Labor and Health and Human Services, permits insured group health plans to 

make certain changes without having to relinquish their grandfathered status. 

Under the Amendment, an insured group health plan will not have to relinquish 

grandfather status merely because the plan (or its sponsor) enters into a new policy, 

certificate or contract of insurance. To maintain its grandfather status, however, a group 

plan that enters into a new policy, certificate or contract must provide documentation of 
December 17, 2010 

Page 2 

plan terms (including benefits, cost sharing, employer contributions and annual limits) 

sufficient to determine whether a change causing a cessation of grandfathered health 

plan status has occurred. 

AARP supports the Amendment to the June interim final regulations with qualifications. 

First, AARP supports the Departments’ decision to apply the Amendment generally on a 

prospective basis only. Retroactive application could have led to confusion for both 

employers and plan members. It could also create concerns on the part of stakeholders 

that other ACA regulations may be changed retroactively. 

Second, AARP agrees that group health plans should not have to relinquish 

grandfathered status on the basis of an administrative change that does not affect the 

benefits or costs of a plan. Clearly, a need arises on occasion to change carriers if the 

employer’s existing carrier is withdrawing from the market. AARP recognizes that the 

June interim final rule may inadvertently interfere with an employer’s efforts to hold 

down premiums by impeding their ability to negotiate a less expensive premium with 

another insurer or obtain another product of the same insurer that offers substantially 

the same benefits, cost-sharing, employer contributions and annual limits. AARP also 

appreciates the Departments’ interest in leveling the playing field for insured and selfinsured group health plans so that insured plans can change carriers in the same 

manner as a self-insured plan can change third party administrators. For these reasons, 

we believe that the rules changes made by the Amendment are warranted. 

However, AARP believes that certain modifications should be made to the Amendment 

to ensure that it does not result in shortchanging enrollees of affected group health 

plans. AARP believes that a group health plan that changes carriers should not be 

permitted to retain grandfathered plan status if the change in carriers also results in a 

significant change to the plan’s network of health care providers. If plan members are 

generally required by the new contract to seek out different physicians, for example, that 

would seem to most plan members to be a sufficiently major change, and therefore 

sufficient to trigger the plan’s loss of grandfather status. Second, we support having the

Amendment’s application be sunset December 31, 2013, and that the Secretary revisit 

this issue if conditions warranted in 2014. Between now and 2014, the Amendment will 

give employers the needed flexibility to negotiate terms with insurers without necessarily 

having to relinquish their grandfather status. However, AARP believes that an overly 

broad application of grandfather status should not be used as a means to avoid 

complying with ACA provisions. 

Finally, AARP believes that the Amended rule should require that the plan sponsor 

provide timely notification to group health plan members (i.e., participants and 

beneficiaries) of the change in policy, certificate or contract of insurance whether or not 

the change results in the loss of grandfather status. Plan members may need to contact 

the carrier directly, for example, in the event of a question related to their benefits or to 

file an appeal of an adverse coverage decision. (Other forms of notice, such as a new 

plan membership card, are sometimes delayed in reaching enrollees until after the new 

plan year begins.) 
December 17, 2010 

Page 3 

Thank you for the opportunity to comment on this important matter. If you have 

questions, please contact Leah Hirsch on our Government Relations staff at (202) 434-

3778. 

Sincerely, 

David Certner 

Legislative Counsel and Legislative Policy Director 

Government Relations and Advocacy