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DEPARTMENT OF BANKING AND INSURANCE 

CHRIS CHRISTIE OFFICE OF THE COMMISSIONER 

Covert/or PO Box 325 

TRENTON, NJ 08625·0325 THOMAS B. CONSIDINE 

Commissioner 

KIM GUADAGNO TEl (609) 292·7272 

Lt. Covert/or 

July 15, 2010 

Office of Consumer Information and Insurance Oversight 

Department of Health and Human Services 

Attention: OCIIO-9991-IFC 

PO Box 8016 

Baltimore, MD 21244-1850 

In re: 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 

(PPACA) 

To Whom It May Concern: 

Throughout the health care reform debate and to the present day, American citizens and 

businesses have been reassured that if they like their health insurance they can keep it. Choice 

has long been a cornerstone of America's insurance industry, with great diversity in levels of 

coverage and corresponding premiums available. Mandating specific coverage levels removes 

that choice, requiring the premium-payer to forego options desirable to them in favor of coverage 

levels selected by government. 

The promise to Americans to be able to keep their coverage was substantially undercut by the 

statute, which already provided they could not keep their current waiting periods, lifetime and 

some annual limits, or dependent limiting age - they had to pay for the coverage elected by 

Congress. Rather than protecting employers' rights to keep their existing coverage, the subject 

rules put to final rest any hope of keeping it. Even with the expansions compelled by the law 

described above, the Interim Rules 'let' employers keep their current coverage only if they: 

• 	 Don't make any reductions of benefits or increases to cost-sharing to offset the added 

expenses required by the law; 

• 	 Don't shop for another insurer willing to write the same plan for a lower premium; 

• 	 Provide employees with a notice disparaging their coverage; 

• 	 Don't terminate a different, more expensive plan; and 

• 	 Jump through administrative hoops to prove plan terms in existence on March 23. 

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 None of this is necessary, and none of this is consiste~t with the spirit of the promise. Employers 

have a right to expect maximum flexibility and administrative simplicity in keeping their current 

plans. 

As the Department notes in the preamble, many plan sponsors make changes to the terms of their 

plans on an annual basis. Change can also occur organically. Some of the structural changes 

include shopping for new administrators or insurers, and adjustments to cost-sharing and 

contributions to maintain economic viability. Organic changes include changes in the medical 

delivery system that result in different formulary configurations and medical necessity 

determinations, and changes in networks as health care providers join and terminate. The ability 

for employers to keep their plans should include keeping that ability to continue to react to the 

changing market dynamics, rather than an obligation to cast in stone the detail that existed on the 

day the President signed the law. Instead, the Department's own analysis estimates that just 

continuing to make these changes would compel between 50 and 80 percent of small employers 

to lose grandfather status under these rules by 2013. 

The Constitution guarantees al1 Americans the right to free speech, and this includes the right not 

to be compel1ed to broadcast positions with which they disagree l

. Employers who want to 

maintain their existing coverage do not believe that "Being a grandfathered plan means that your 

[plan or policy] may not include certain consumer protections of the Affordable Care Act that 

apply to other plans" as the model notice would compel them to notify their employees. Being a 

grandfathered plan means no more or less than that their employer has decided to retain the level 

of coverage that has worked for them rather than the level selected by Congress. 

In line with the foregoing general comments, the following are specific comments on the Interim 

Final Regulations. The citations are to the Treasury regulations, but the same comments apply to 

the coronary provisions in the DOL and HHS regulations: 

54.9815-1251T (a)(l)(ii) - Entering into a new policy with substantial1y the same benefits as the 

existing policy should not cause a plan to cease to be grandfathered. Plans should continue to 

have the ability to shop for less expensive vendors. 

54.9815-1251 T (a)(2) - Plan sponsors should not be required to provide notice of the 

grandfathered status to employees in grandfathered plans. By defining grandfathered plans as 

excluding 'consumer protections that apply to other plans' and inviting questions and 

complaints, the model notice requirement appears designed to discourage grandfathering by 

disparaging the plan that the employer has been providing. This will have a chilling effect on 

employers, that by the estimates of the Departments wi11 add at least $39.6 million in costs. 

54.9815-1251T (a)(3) - Plans should not be required to perform recordkeeping above and 

beyond their existing obligations in order to maintain grandfathered status. Again, by the 

Departments' own estimates, this adds $32.2 million to the cost of grandfathered plans, further 

disincenting the exercise of their 'right' under PPACA. 

I. See International Dairy Foods Association v. Amestoy (2d Cir., 1996)(striking down Vermont law requiring milk producers to label milk from 

cows lreated with synthetic growth hormones that had no effect on the safety of the milk); Wooley v. Maynard, 430 U.S. 705. 714, 51 L. Ed. 2d 

752,97 S. CI. 1428 (1977) ("We begin with the proposition that the right of freedom of thought protected by the First Amendment against slate 

action includes both the right to speak freely and the right to refrain from speaking at all. "). 

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54.9815-1251T (b)(2)(ii) - Employers should be pefI\litted to drop plans without causing 

remaining plans to lose grandfathered status, even if the basis of dropping the plan is cost of 

coverage. This is a direct denial of their right to keep their existing coverage. 

54.9815-1251T (g) - Plan sponsors should be entitled to continue to make changes to costsharing amounts and contribution levels without losing grandfathered status. 

In summary, the regulations should be recast to support, rather than deny, the rights of employers 

to keep their existing coverage. 

Respectfully submitted, 

~~ Cmas B. Considine 

Commissioner 

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