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REG -NPYI2-20

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LEGAL PROCESSING DIVI

SION

PUBLICATION & REGULATIONS

ANCH As of: September 09, 2010

PUBLIC Status; Posted
Posted: September 09, 2010
SUBMISSION 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-2010-0010-0916
Comment on FR Doc # 2010-14488

Submitter Information

Name: Diana Aviv
Address:
1602 L Street NW
Washington, DC, 20036
Email: diana@independentsector.org
Phone: 202-467-6106
Fax: 202-467-6101
Submitter’s Representative: Pat Read
Organization: Independent Sector

General Comment

On behalf of Independent Sector, we appreciate the opportunity to submit these comments
regarding our concerns and suggestions for improvement to the Interim Final Rules for Group
Health Plans and Insurance Coverage relating to Status as a Grandfathered Health Plan under the
Patient Protection and Affordable Care Act.

Attachments

IRS-2010-0010-0916.1: Comment on FR Doc # 2010-14488

https://fdms.erulemaking.net/fdms-web-agency/component/submitterInfoCoverPage?Call=P... 9/9/2010


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INDEPENDENT SECTOR

Chale
Brian A. Gallagher
‘Unied Way Worldwide

Vice Chale

Kelvin H.Taketa

‘Hawaii Community Foundation
Treasurer

Lore A, Slutsky

“The NewYork Commonicy Trust
Secret

Marguerite Kondracke
‘America’s Promise Aliance
At-Large Member

Executive Committee
RuthA. Weeden

Public Agenda

President and CEO

Olana Aviv

BOARD OF DIRECTORS
Ellen Alberding

The Joyce Foundioon
Susan, Berresford
Ralph B. Everett

Jone Center for Pottica
and Econame Studies
‘Scephen B. Helnez
Rockelelier Broshers Fund
ene Hirano:

US-}apan Counct

}0.Hokoyama
Lerdersnip Eaveation for Asian Pacifcs

Janet Mucgula
National Council of Ls Raza
Mariam C. Noland
‘Community Foundasion

for Sournenst Michigan
Michael Piraino

"Nanional CASA Assoclacion
‘Andrew O.Plepler

Bank of America

Wendy 0. Purtefoy
Public Education Networse

Rey Ramsey
(One Economy Corporation

Edward Sloot

Duke University

Reverend Larry Snyder

Catholic Charves USA.

‘Arturo Vargas

[Nstonal Astocation of Latino Elected
and Appoinced Officials Education Fund
(ue A.Vega-Marguls

Marguerite Casey Foundation

‘Wiliam $.White

Charles Stewart Mott Foundation

Gary L.Yaces
‘The Calfornia Wellness Foundation

‘The Honorable
John W. Gardner (1912-2002)
Founding Chait

Beian O'Connell
Founding President and Presidenc Emerus

2010 ANNUAL CONFERENCE
BeTOUER 2033, ATLANTALGA,

A vital voice for us all

August 13, 2010

Office of Consumer Information and Insurance Oversight
Department of Health and Human Services
Re: RINO99 | -AB68,OCHO-99 | -IFC

Internal Revenue Service
Department of Treasury
Re: RIN 1545-B)51

Office of Health Plan Standards and Compliance Assistance
Department of Labor
Re: RIN |210-AB42

Submitted electronically via regulations gov

RE: OCHO-991-IFC, Interim Final Rules for Group Health Plans and Insurance Coverage
relating to Status as a Grandfathered Health Plan under the Patient Protection and Affordable
Care Act

To Whom It May Concem:

On behalf of Independent Sector, we appreciate the opportunity to submit these comments
regarding our concerns and suggestions for improvement to the Interim Final Rules for Group
Health Plans and Insurance Coverage relating to Status as a Grandfathered Health Plan under
the Patient Protection and Affordable Care Act.

Independent Sector is the preeminent national organization that brings together all segments
of the nonprofit and philanthropic community -- nonprofits, foundations, and corporate giving
programs of all sizes and missions from across the country. We serve as the premier meeting
ground for leaders of America's charitable and philanthropic sector to advance our vision of a
just and inclusive society of active citizens, effective institutions, and vibrant communities. Our
nonpartisan coalition enjoys a broad constituency of 540 organizations that collectively
represent tens of thousands of charitable groups in every state across the nation.

Nonprofit organizations and foundations in the United States employ an estimated 12.9
million individuals. A great number of these organizations and a vast majority of our own
members have worked diligently to ensure that their employees have access to health care
insurance. The vast majority of nonprofits are very small with fewer than 25 employees, and
they currently do not have the bargaining power to negotiate the lower insurance premium
rates available to larger employers. Many of these organizations will benefit from the
expanded options that will be available beginning in 2014 through the Exchange, and a
number of smaller organizations may also benefit from the small-employer tax credit that will
help tax-exempt organizations with less than 25 full-time equivalent employees offset the
costs of providing insurance. However, the small-employer credit begins to gradually phase-
‘out at the 10 employee threshold, limiting the full benefit only to the smallest organizations.

1602 L Serene, NW, Sute 960, Washmgton, DC 20036 phone 202-467-6100 fax 202-467-6101 wwindependentsectoror


Nonprofits and foundations are particularly sensitive to changes in the economy as many nonprofits rely on
donations and pledges to meet their annual budgets. During economic downturns, charitable giving tends to
decline at the same time the demand for services from charitable organizations increases. ' As health benefit
costs have continued to increase and budgets are decreasing, nonprofit organizations can be faced with the
undesirable choice of continuing to provide health coverage to the employees who are essential to fulfilling
their missions, or eliminating jobs and making other cuts in their services. In order to find the balance that will
allow them to sustain the workforce needed to achieve their charitable purposes, nonprofits need to have
flexibility to adjust cost-sharing and coverage to control costs, We are particularly concemed about the
ability of srnall and mid-sized nonprofits to retain their grandfathered plan status. Prices in the small group
insurance market are already high and small employers lack bargaining power to control premium increases,

Under the interim final regulations, grandfathered health plans are prohibited from significantly reducing
benefits, raising co-insurance charges, copayments, or deductibles, or lowering employer contributions,
Nonprofits that cannot comply with the restrictions required to remain grandfathered or pay the higher cost
associated with non-grandfathered plans are concemed they will be forced to drop employee health benefits
before altemative coverage is available in 2014. We are very concemed that the restrictive and inflexible
nature of the interim final regulations will limit the ability of nonprofits to make necessary cost-saving changes
and retain their grandfathered plan status. To prevent the unnecessary loss of coverage, we encourage the
Departments to adopt more flexible standards in the final rule.

Specifically, we would encourage the Departments to adopt a waiver for small and mid-sized nonprofit
employers (up to 100 employees) that would permit them to retain their grandfathered plan status until
2014, This waiver would allow small nonprofits to continue to make necessary plan changes in order to
preserve existing health coverage until 2014 when the Exchanges go into effect

Second, we encourage the Department to permit plan sponsors with insured coverage to change insurers
without losing their grandfathered plan status. The regulations currently permit self-funded plans to change
their third party administrator without losing grandfathered status. It is only fair to permit insured plans to
change their insurer. Locking employers into one insurer would prevent them from shopping for better rates
and coverage or expose them to the cost increases associated with the loss of grandfathered plan status.

Thank you for allowing us to express our views on this important issue. We stand ready to be a resource to
you and would welcome the opportunity to discuss this matter further.

Respectfully submitted,

Darr Avy

Diana Aviv
President and CEO

* Briefing on the Economy and Charitable Giving, The Center on Philanthropy at Indiana University,
December 2008.

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