August 16, 2010 

Office of Consumer Information and Insurance Oversight 

Department of Health and Human Services 

Attention: OCIIO-9991-IFC 

P.O. Box 8016 

Baltimore, MD 21244-1850 

Re: OCIIO-9991-IFC, 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 (comments filed electronically at: http://www.regulations.gov) 

On behalf of the American Association of Colleges of Osteopathic Medicine (AACOM), I 

appreciate the opportunity to comment on the interim final rules (IFRs) regarding grandfathered 

health plans under the Patient Protection and Affordable Care Act (PPACA). AACOM is a 

§ 501(c)(3) trade association, which represents the administrations, faculty, and students of the 

nation’s 26 colleges of osteopathic medicine and three branch campuses that offer the doctor of 

osteopathic medicine degree. 

It is important to note that AACOM is a small- to medium-sized tax-exempt organization with 

approximately 30 employees and, in general, has the same obstacles for obtaining good, 

affordable health insurance coverage confronting other small- to medium-sized associations. 

AACOM is captive to a small number of health insurance providers and does not have the 

economic clout of larger enterprises. 

AACOM purchases health insurance for its employees, enabling them to be fully insured. 

AACOM does not have the resources or ability to self-insure as a means to control our health 

insurance costs and benefits. AACOM, therefore, will greatly benefit from the expanded options 

for health insurance that will be available beginning in 2014 through the Exchange. The 

Exchange will allow small- to medium-sized organizations to benefit from the economics of 

pooling that is not currently available. 

Because the benefits of the Exchange will not be realized until 2014, however, AACOM will 

continue to experience annual cost increases and lack of control over actual coverage until 2014. 

As such, the grandfathering of AACOM’s existing coverage is extremely important, especially 

prior to the establishment of a working Exchange system. 

AACOM is greatly concerned that the grandfather provisions outlined in the IFRs are too 

restrictive and will cause tax-exempt organizations, such as AACOM, to lose the grandfathering 

 
August 16, 2010 

OCIIO-9991-IFC 

Page 2 

benefit we expected. If forced to consider options of a non-grandfathered plan before it has the 

benefit of an Exchange, AACOM is concerned that it may be priced out of the market and may 

even have to drop coverage – something that it does not want to do and would be contrary to the 

intent of health reform. 

There are subsidies available for small employers to help offset the costs of providing insurance, 

but these credits are very limited and start to be phased out in the case that an employer has more 

than 10 employees. They are completely phased out if an organization has 25 or more 

employees, so AACOM cannot benefit from these subsidies. The credits are also phased out for 

employers with even modest compensation packages. Thus, while these subsidies do provide 

assistance for some small tax-exempt employers, their benefit is very limited and will not help 

AACOM. 

Because AACOM is small- to medium-sized in terms of total numbers of employees, and it 

cannot self-insure, it is at the mercy of health insurance plans sold by private carriers. AACOM 

does not have control over co-pays and cost sharing. As such, simple changes to plans beyond 

AACOM’s control can cause its plan to lose grandfather status. Also, because the Exchange is 

not currently in place, AACOM anticipates that the prospect of finding new affordable insurance 

that meets the new requirements of the PPACA is problematic. Furthermore, in order to control 

costs so that health insurance can be purchased for employees, AACOM often must work with its 

current insurance carriers to adjust co-pays and cost sharing in order to afford coverage, 

especially in the current economic environment. 

AACOM is concerned that the IFRs as currently drafted may force it to make the difficult and 

undesirable choice of canceling health care coverage if grandfather status is revoked, especially 

before the Exchange is in place. This is a very real concern, and, in recent years, significant 

modifications and cancellations have occurred due to rising health care costs. 

AACOM would suggest that for the interim period before the Exchange is established, small- to 

medium-sized employers be allowed to make cost saving changes to co-payments and cost 

sharing, provided they do not reduce the per-employee amount they pay for insurance. This 

could help AACOM adjust and preserve coverage in anticipation of greater reform and options 

that will occur, beginning in 2014. 

AACOM also suggests that small- to medium-sized employers be allowed to change insurance 

carriers prior to 2014 and have our plans treated as a grandfathered plans, provided that we do 

not reduce the per-employee amount we pay for insurance. This would allow AACOM to 

maintain the level of coverage for employees and reap the benefit of a less expensive plan prior 

to the implementation of the Exchange. 

 
August 16, 2010 

OCIIO-9991-IFC 

Page 3 

Thank you for this opportunity to express AACOM’s views on this important issue. If you have 

questions or need further information, please do not hesitate to contact Susan Eads Role of 

AACOM at srole@aacom.org or 301-968-4152. 

Sincerely, 

Stephen C. Shannon, DO, MPH 

President and CEO