"'RECEIVED'" 

Ju126.2010 08;30:03 WS#20 

OSNUM: 072620101011 

OFFICE OF THE SECRETARY 

CORRESPONDENCE 


CONTROL CENTER 


July 20,2010 

The Honorable Kathleen Sebelius 

Department ofHealth and Human Services 

Hubert H. Humphrey Building. 

Room 44S-G 

200 Independence Avenue, SW 

Washington, DC 20201 

Re: Coverage for Dependent Children to Age 26 

Dear Secretary Sebelius: 

Aetna 

151 Farmington Avenue 

Hartford, CT 06156 

Steven I. Kalmar 

Senior Vice President 

Govemment Affairs and Public Policy 

law & Regulatory Affairs. RE6A 

(860) 273-2706 

Fax: (860) 273-8340 

On May 10, 2010, the Internal Revenue Service, Department ofLabor, and Department ofHealth II 

and Human Services (the "Departments) jointly released interim final regulations on the I! 

dependent children coverage extension requirement included in the Affordable Care Act (ACA). ' 

As one ofthe nation's oldest and ]argest providers ofhealth care benefits. we understand the I! 

importance of extending coverage to dependents under age 26. Aetna particularly appreciates the il 

Departments' efforts to issue these regulations in a timely manner. Aetna is committed to 

working with the Departments in developing and clarifying the requirements for extending " coverage to dependents under age 26 to assure successful implementation. To help in this II 

endeavor. Aetna respectfully offers a request for additional clarification on the foHowing 

components ofthe rule. 

• 	 Individual Market Premiums: Most states currently allow individual market premiums to 

vary based upon the age ofthe policyholder and dependents. Federal law generally allows 

this to continue until the individual mandate is implemented in 2014. Aetna requests 

additional clarification allowing plans to charge different individual market premiums based il 

on dependent age until 2014. Age rating plays an important role in maintaining affordability 

and a balanced risk pool prior to the 2014 implementation ofpremium tax credits, 

reinsurance and other provisions to stabilize the insurance market. 

• 	 Grandchildren: There are circumstances where Aetna and other insurers extend dependent 

coverage to grandchildren. Some employers request these benefits. In addition, several states I 

require coverage ofgrandchildren ifthey are tax dependents ofthe policy holder.' The federal Ii 

regulations do not impose coverage ofgrandchildren on health plans. However, it would be 

helpful to clarify that ifplans do cover grandchildren -- either voluntarily or through state law 

-- this would not trigger a requirement to cover grandchildren until age 26. Instead, 

additional conditions such as tax dependency, residency, student status or marital,status may 

be required by the plan. 
... RECEIVEO to .. 


JuI26.2010 08:30:03 WS11120 


OSNUM: 072620101011 


OFFICE OF THE SECRETARY 


CORRESPONOENCE 


CONTROL CENTER Page 2 

July 20,2010 

• 	 Age based benefits: It also is conunon for health plans to vary benefits for specific age 

cohorts. For example, additional preventive services such as well-baby benefits are only 

provided to children under two years ofage. Restricting benefits for a certain age group 'I 

based on medical evidence ofage-appropriate services assures that patients receive the right :, 

care at the right time and do not undergo treatments that are not appropriate for their age. The:~ 

regulations specify that a plan may not charge an "additional premium surcharge" based on a Ii 

child's age or limit available benefit options to children based on age. Aetna would ' 

appreciate additional clarification on allowing plans to continue to provide different benefits I,; 

within a plan based on demographic characteristics. such as age, where medically appropriate. II 

We have attached a draft set ofFrequently Asked Questions (FAQs) that would help clarify these "'\ 

issues. Aetna welcomes any thoughts or clarification the Departments can offer in regards to l 

these areas. We look forward to the continued opportunity to share our experiences as a health 

benefits company. Ifwe can be a resource as the Departments continue to refine their regulations 

regarding dependent coverage. or ifyou have questions, please contact me at 860-273-2706. 

Sincerely, 

(I'"-L ~~ )/£' q ..2 

Steven B. Kelmar 

cc: 	Jay Angoff 

Steve Larsen 
Page 3 

July 20,2010 

Age-Appropriate Benefits 

"'RECENEO'" 

Jul 26.2010 08:30:03 WS# 20 

OSNUM: 072620101011 

OFFICE OF THE SECRETARY 

CORRESPONOENCE 

CONTROL CENTER 

DRAFT FAQS ON AGE 26 RULE 

Q. Does tbe Interim Final Rule's requirement tbat a health plan not vary terms based on 

age preclude a plan from covering different age-appropriate benefits within the plan based 

on age? 

A. No. The Interim Final Rule provides that plan terms for dependent children related to 

eligibility may not vary based on age (except those age 26 or older). Examples in the Interim 

Final Rule specify that a plan may not charge an additional premium or limit available benefit 

options to children based on age. The Interim Final Rule would not preclude a group health plan 

or health insurance issuer from covering benefits within the plan baSed on age, provided such a 

limitation otherwise complies with applicable law. For example, a plan or issuer may limit well ,­

baby visits to a certain age range. Just because some ofthese benefits may apply to dependent 

children does not mean that the plan or issuer would be precluded from setting age range 

limitations for benefits under the plan. 

Coverage of Grandcbildren 

Q. Both the statute and the Interim Final Rule expressly do not require a health plan to 

cover grandchildren. Where a plan or issuer does cover a grandchild (either voluntarily or 

wbere required by state insurance law), must the plan or issuer cover the grandchUd to age 

26? May tbe plan or issuer require additional conditions, sucb as tax dependency for 

grandchildren? 

A. Generally, a group health plan or health insurance issuer may determine the relationship 

regarding what type ofchildren will be covered (e.g., natural child, step child). To the extent a 

plan or issuer covers a child, it must cover the child to age 26 and may not impose additional 

conditions. such as residency or tax dependency. However, the statute specifically carVes out _ 

grandchildren from these requirements. This means that even if a plan or issuer chooses to cover 

grandchildren, it would be permitted to place additional restrictions on the grandchild (where 

otherwise permitted by law), such as age, residency, or tax dependency. 

Age-Banding for All Individuals under Policy 

Q. Under the Interim Final Rule, mayan Individual policy continue to cbarge different 

premiums for individuals covered under the policy based on age, where the premium 

charge is applied uniformly to all participants, not just dependent children? 

A. Yes. Beginning for plan years that start on or after January 1,2014, a health insurance 

issuer in the individual and small group market will be limited under PHSA § 2701 in what 

premiums may be charged based on age. However, until that time, a health insurance issuer in 

the individual market would be permitted to charge different premiums based on age ifthe plan or 

issuer applies the same rule uniformly to all individuals under the plan. as otherwise permitted by 

law. For example, when determining afamily's premium, a plan may set different rates for an 

enrollee. spouse, and their three children, based on their respective ages where there is an 

H:I015455100003IDRAfT FAQS ON AGE 2tI RULE DOC 

i 
'.. 

Page 4 

July 20, 2010 

actuarial basis for differentiation, since the application ofthe oharges applies uniformly to each 

individual. In this example, ifthe family policy covers a 6-month old, 10-year old. and 24-year 

old, and actuarial projections showed that a typioal6-month old and 24-yearold likely would 

consume greater benefits, the plan could set a rate for the 6-month old and 24-year old higher 

than the 10-year old. where otherwise allowed by law, without violating the requirements ofthe 

Interim Final Rule. n. RECEIVED ••• 

Ju126.2010 08:30:03 WS#20 

OSNUM: 072620101011 

OFFICE OF THE SECRETARY 

CORRESPONDENCE 

CONTROL 9ENTER