From: Anne Lennan

To: E-OHPSCA715.EBSA

Subject: RIN 1210-AB43

Date: Friday, August 27, 2010 1:51:16 PM

August 26, 2010

Office of Health Plan Standards and Compliance Assistance

EBSA

Room N-5653

Department of Labor

200 Constitution Avenue, NW

Washington, DC 20210

ATTN: RIN 1210AB43

Comments on Interim Final Rules on Patient Protections under P.L. No. 111-148

These comments are submitted on behalf of the Society of Professional Benefit

Administrators (SPBA).

SPBA is the national association of Third Party Administration (TPA) firms that are hired

by employers and employee benefit plans to provide outside professional management of

their employee benefit plans. It is estimated that 55% of US workers in non-federal health

coverage are in plans administered by some form of TPA. The clients of TPA firms include

every size and format of employment, including large and small employers,

state/county/city plans, union, non-union, collectively bargained multiemployer plans, as

well as plans representing religious entities.

Section 2590.715-2711 No Lifetime or Annual Limits

Moratorium Needed

Plan sponsors need to have a clear understanding of the definition of essential health

benefits in order to design plans that comply with the new prohibitions on lifetime and

annual limits. The prohibition on lifetime and annual limits represents a major, major

change for group health plans. At minimum, plans need a six-month lead time before the

beginning of the plan year to redesign their plans after the agencies issue a detailed

explanation of what constitutes essential health benefits. Plan sponsors and their advisors

are not able to draft compliant plans because the most important guidance on the definition

of essential health benefits has not been provided. Given that this guidance has not been

issued by late August, we request a one-year moratorium on the rule prohibiting lifetime

and annual limits, or a waiver of penalties for noncompliance. A full year is needed to

match the annual cycle workers and employers must have to make choices and changes.

Dental and Vision

Are non-pediatric dental and vision benefits that are a part of the major medical plan

subject to the prohibition on lifetime and annual limits? While the interim final rules state

that only essential health benefits are to be taken into account in determining whether an

individual has received benefits that meet or exceed the restricted annual limits, plan

sponsors and third party administrators are not certain whether dental and vision benefits

that are a part of a major medical plan are considered essential health benefits.

Excepted Benefits

It is our understanding that self-funded indemnity plans meeting the conditions in Section

2590.732(c)(4) are excepted benefits and therefore are not subject to the prohibition on
lifetime and annual limits. Section 2590.732(c)(4) sets forth a number of conditions for

indemnity insurance; one of which is that the benefits are provided under a separate

policy, certificate, or contract of insurance. We seek clarification that this condition does

not exclude self-funded indemnity plans. While the term policy is often associated with

fully-insured plans, it could also apply to a self-funded arrangement.

Transitional Rules for Individuals whose Coverage or Benefits Ended by

Reason of Reaching a Lifetime Limit

Please clarify whether the transitional rules apply to individuals who elected COBRA

coverage and then dropped their coverage because they reached their lifetime limit.

Further, if these individuals have been without coverage for 63 days or more, may the plan

impose a pre-existing condition on them (with the exception for those under the age of

19)?

Do the transitional rules apply to individuals who exhausted their lifetime maximum and

subsequently terminated employment, but did not elect COBRA because their benefits

ended? If so, how far back must eligibility be checked on these prior participants?

Section 290.715-2712 - Rescissions

The interim final rules prohibit plans from rescinding coverage unless an individual was

involved in fraud or made an intentional misrepresentation of material fact. This extremely

narrow exception is unworkable and fails to take into account all the situations where

individuals are responsible for informing the plan and voluntarily choose not to do so. For

example: 1) A plan participant divorces and informs the plan 8 months after the fact that

the ex-spouse should not have been covered under the plan; 2) A young adult dependent

becomes covered under non-parent employer-sponsored coverage and does not inform

the plan of this coverage. In both these examples, the plan clearly states in the plan

document and the SPD the participants obligation to inform the plan of these changes.

The current exception to the prohibition on rescissions must be expanded to include all

those situations where the participant is required under the terms of the plan to notify the

plan of a change impacting eligibility and fails to notify.

Section 2590.715-2719A - Patient Protections

Coverage of Emergency Services

The interim final rule sets forth requirements for covering emergency services in an

emergency department. SPBA members find these rules to be very confusing.

Please clarify that the interim final rule applies to outpatient emergency room services only

and not emergency admissions. Many plans require pre-certification for emergency

admission (within 48 hours after emergency admission). Clarification that pre-certification

for emergency admission is still permitted would be appreciated.

The section on cost-sharing requirements needs another subheading to distinguish

between copayments/coinsurance and the requirement to pay a reasonable amount to outof-network providers. These are different requirements and should be presented as such to

avoid confusion.

To many readers, the interim final rule appears to impose a mandate on out-of-network

emergency services that is more stringent than the requirement on in-network emergency

services. According to the interim final rule, out-of network emergency services must be

provided without regard to any terms or conditions of coverage, other than the exclusion of
or coordination of benefits, an affiliation or waiting period, or applicable cost-sharing

requirements. This has given readers the misimpression that plans are required to cover

ALL emergency room visits if out-of-network, when such visits would not be covered if innetwork.

For example: A plan excludes work-related injuries from coverage. A plan member suffers

a work-related injury and seeks treatment at the emergency department of an out-ofnetwork hospital. Is the plan required to cover these emergency services?

Adding an example such as the one above and explaining that the plan is not required to

cover emergency services that are excluded under the terms of the plan would be

appreciated.

We request clarification that plans may still impose penalties, such as reducing benefits,

for participants who use the emergency services of a hospital for non-emergency

situations.

Thank you for considering these comments.

-- 

Anne C. Lennan

Vice President

SPBA

Two Wisconsin Circle, Suite 670

Chevy Chase, MD 20815

301-718-7722

anne@spbatpa.org