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NATIONAL COORDINATING COMMITTEE FOR MULTIEMPLOYER PLANS

815 16th Street, N.W., Washington, DC 20006  Phone 202-737-5315  Fax 202-737-1308 

 

Mark H. Ayers Mark H. Ayers Mark H. Ayers 

Chairman 

Randy G. DeFrehn Randy G. DeFrehn Randy G. DeFrehn 

Executive Director 

 E-Mail: RDEFREHN@NCCMP.ORG

December 1, 2010 

The Honorable Phyllis C. Borzi 

Assistant Secretary, Employee Benefits Security Administration 

U.S. Department of Labor 

Washington, D.C. 20210 

Re: RIN 1210–AB42 

Dear Ms. Borzi: 

The National Coordinating Committee for Multiemployer Plans (the NCCMP) is pleased to 

provide these comments on the Amendment to Interim Final Regulations implementing the rules 

regarding when a group health plan has status as a “grandfathered health plan” under the Patient 

Protection and Affordable Care Act. The Amendment was published by the Departments of 

Labor, Treasury, and Health and Human Services (the “Departments”) on November 17, 2010. 

As you know, the NCCMP is the only national organization devoted exclusively to protecting the 

interests of the approximately ten million workers, retirees, and their families who rely on 

multiemployer plans for retirement, health and other benefits. The NCCMP’s purpose is to 

assure an environment in which multiemployer plans can continue their vital role in providing 

benefits to working men and women. The NCCMP is a nonprofit, non-partisan organization, 

with members, plans, and plan sponsors in every major segment of the multiemployer plan 

universe, including in the airline, building and construction, entertainment, health care, 

hospitality, longshore, manufacturing, mining, retail food, building service and trucking 

industries. 

The NCCMP filed comments on the Interim Final Regulations concerning grandfather status. In 

those comments, we noted that for insured collectively bargained plans, a change in insurance 

issuers during the period of the collective bargaining agreement would not, by itself, cause a plan 

to lose its status as a grandfathered health plan at the termination of the agreement. However, a 

change in issuers after the termination of the CBA would result in loss of grandfather status. We 

noted that clarification of this rule in the regulations would be helpful. Because many CBAs last 

three to five years, it is important to know if a plan’s trustees are locked into a relationship with a 

particular insurance issuer and when they can move to a more advantageous relationship with a 

new issuer. We also asked the Departments to clarify whether a plan would lose grandfather 

status when it adds a new insured benefit option. 
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The Honorable Phyllis C. Borzi 

December 1, 2010 

Page 2 

 

We appreciate and commend the Amendment to the Interim Final Regulations that provides that 

a group health plan may change health insurance coverage without ceasing to be a grandfathered 

plan, provided the plan otherwise meets the grandfather standards. The Amendment applies to 

changes to insurance coverage that are effective on or after November 15, 2010. The 

Departments invited comments on the Amendment with respect to the prospective effective date 

of the rule and how that affects plans with different plan years. 

In our view, there is no reason to apply this significant change only prospectively, and we 

recommend that the Amendment apply retroactively. Not all plan sponsors would be able to take 

advantage of retroactive application at this time, but it should be an option for those plan 

sponsors interested in applying it to contracts effective prior to November 15. Those plan 

sponsors that have already made a significant investment in non-grandfathered status (e.g., the 

insurance product was priced as a non-grandfathered plan and employee premiums have already 

been established with those benefits in mind) would not have to reverse course if they think it 

would be too disruptive or not possible. However, other plan sponsors would be free to keep or 

reclaim their grandfathered status. Of course, for retroactive application to be a possibility for 

any plan sponsors, the Departments would need to announce this change as soon as possible. 

We also recommend that the Departments clarify that the Amendment applies when a selfinsured group health plan enters into a new contract with an issuer. This certainly appears to be 

the case based on the language of the revised regulatory text, but the focus in the preamble and in 

the accompanying fact sheet on “changing” issuers confuses the issue unnecessarily. Permitting a 

change in issuers as well as a funding shift from self-insured to insured is consistent with the 

Departments’ stated intent to treat insured and self-insured plans similarly. 

Conclusion 

Thank you for the opportunity to provide comments on this important issue. We will be pleased 

to provide any additional information that you might find useful. 

Sincerely, 

Randy G. DeFrehn