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LEGAL PRGCESSING DIVISION

PUBLICATION & REBULATIONS BEG -1181(2~-(O SEP 0 8 2019

As of: September 08, 2010

PUBLIC Status: Posted

Posted: Septermer 08 2010
SU BMISSION 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-2010-0010-0894
Comment on FR Doc # 2010-14488

SS .

Submitter Information

Name: Steven Frederick McDowell
Address:
Arnold & Kadjan
19 West Jackson Boulevard
Chicago, IL, 60429
Email: arnoldandkadjan@aol.com
Phone: 312-236-0415
Fax: 312-321-0438
Submitter's Representative: Steven McDowell
Organization: NECA-IBEW Family Medical Care Plan

General Comment

See attached file(s)

Attachments

IRS-2010-0010-0894.1: Comment on FR Doc # 2010-14488

http://fdms.erulemaking.net/fdms-web-agency/component/submitterInfoCoverPage?Call=Pr... 9/8/2010


8/16/10

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: Interim Final Rule for Group Health Plans and Health Insurance Coverage Relating
to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable
Care Act

The national NECA-IBEW Family Medical Care Plan, a collectively bargained,
jointly trusteed, multi-employer health care plan wishes to comment upon the likely
unintended consequences of the “anti-abuse” regulations found in Section (b)(2) of the
Interim Regulations, particularly the provisions of subsection (b)(2)(ii). We believe that
clarification should be provided which would ensure that the protection of “bona-tide
employment-based reasons” under subsection (b)(2)(ii(C) would apply to ceses
involving common transactions of multi-employer plans which, if left unaddressed, could
have the unintended effect of causing involved “transferee” plans to lose “grandfathered”
status.

Initially, employees of contributing employers enter and leave these plans
pursuant to arms length collective bargaining between unions and the employer. These
are not transactions which are in the control of an employer and the role of the union as
the collectively bargained representative of employees ensures that the interests of
employees will be protected in the process. But, without clarification from the agencies
that bona fide good faith collective bargaining over health plan terms constitutes a “bona
~fide employment-based reason” for a transfer, a transferee multi-employer plan may be
reluctant to accept new employee groups for fear of loss of grandfathered status, a
condition which could have the undesirable effect of locking employees in plans which
may not prove advantageous.

A similar concern is raised in the area of mergers between multi-employer health
care plans. Frequently, a merger of plans may be occasioned by a merger between local
unions ordered by an International Union, a transaction which would seem to represent a
“bona-fide employment based reasons for a transfer.” In other cases, the plan sporisor
joint board of trustees of the “transferee” plan determines that it can no longer administer
a plan of benefits or that the administration of the plan could more efficiently be carried
out by a larger plan. In those cases a merger is undertaken between the multi-employer
plans which usually results in a “transferor” plan becoming part of an ordinarily larger
“transferee” plan. Generally an employer is not involved in these transactions between
multi-employer plan sponsors and only becomes involved when the employer and union
negotiate a collective bargaining amendment substituting the transferee plan for the
transferor plan in the agreement. These transactions are not motivated by an employer’s


cost cutting desires, but without clarification that plan mergers of multi-employer plans
represent “bona-fide employment-based reasons” for a transfer, could result in reluctance
on the part of surviving “transferee” plans to absorb “transferor” plans in merger
transactions for fear of losing grandfathered plan status. This result could significantly
lessen the health care choices available to unionized employees.

We would ask that the agencies clarify that addition of employees to transferee
plans pursuant to either arms length collective bargaining over employee plan coverage or
mergers between multi-employer plans represent “bona-fide employment based reasons”
for a transfer under subsection (b)(2)(ii)(C) of the regulations.

NECA-IBEW FAMILY MEDICAL CARE PLAN

By: Steven F. McDowell
Amold and Kadjan

19 West Jackson Boulevard
Chicago, Illinois 60604
(312) 236-0415