DB1/65511542.3 

COMMENTS ON “ANNUAL LIMIT” INTERIM FINAL RULE

Submitted by 

EMPLOYERS NETWORK FOR RESPONSIBLE OPTIONS, LAWS AND LEADERSHIP (ENROLL) 

INTERNATIONAL PUBLIC MANAGEMENT ASSOCIATION FOR HUMAN RESOURCES

COLLEGE AND UNIVERSITY PROFESSIONAL ASSOCIATION FOR HUMAN RESOURCES

NATIONAL RAILWAY LABOR CONFERENCE

Submitted to 

UNITED STATES DEPARTMENT OF THE TREASURY

Internal Revenue Service 

RIN–1545-BJ61 

UNITED STATES DEPARTMENT OF LABOR

Employee Benefits Security Administration 

RIN 1210–AB43 

UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Consumer Information and Insurance Oversight 

OCIIO–9994–IFC 

August 27, 2010
DB1/65511542.3 

COMMENTS ON “ANNUAL LIMIT” INTERIM FINAL RULES

Submitted by 

EMPLOYERS NETWORK FOR RESPONSIBLE OPTIONS, LAWS AND LEADERSHIP (ENROLL) 

INTERNATIONAL PUBLIC MANAGEMENT ASSOCIATION FOR HUMAN RESOURCES

COLLEGE AND UNIVERSITY PROFESSIONAL ASSOCIATION FOR HUMAN RESOURCES

NATIONAL RAILWAY LABOR CONFERENCE

INTRODUCTION

On June 28, 2010, Interim Final Rules for Group Health Plans and Health Insurance 

Coverage Relating to Preexisting Condition Exclusions, Lifetime and Annual Dollar Limits on 

Benefits, Rescissions and Patient Protections Under the Patient Protection and Affordable Care 

Act, 75 Fed. Reg. 37,118-37,421 (June 28, 2010) (“Interim Rules” or “Rules”) were published 

pursuant to the Patient Protection and Affordable Care Act, Pub. L. No. 111–148 (March 23, 

2010) (“Affordable Care Act” or “Act”), and the Health Care and Education Reconciliation Act, 

Pub. L. No. 111-152 (March 30, 2010) (“Reconciliation Act”). The Interim Rules were issued 

by the three agencies responsible for healthcare reform law rulemaking: the Internal Revenue 

Service in the United States Department of the Treasury (“IRS”), the Employee Benefits Security 

Administration in the United States Department of Labor (“DOL”), and the Office of Consumer 

Information and Insurance Oversight in the United States Department of Health and Human 

Services (“HHS”) (together the “Departments”). The Interim Rules included a request for 

comments. 

These comments1

 are submitted on behalf of the Employers Network for Responsible 

Options, Laws and Leadership (“ENROLL”), including the International Public Management 

Association for Human Resources (“IPMA-HR”), the College and University Professional 

Association for Human Resources (“CUPA-HR”), and the National Railway Labor Conference 

(“NRLC”). ENROLL consists of employers and associations that have a shared commitment to 

the responsible administration of healthcare benefit plans. In many respects, the Affordable Care 

Act and the Reconciliation Act (collectively “the Act”) reinforce the role played by employers 

and employment relationships in national healthcare policy. As evidenced by the Interim Rules, 

responsibility for healthcare reform changes and costs will rest heavily on employers, and 

employers will play a central role in advancing the policies underlying healthcare reform. The 

employers and associations participating in ENROLL are identified in the Appendix. 

 The Interim Rules provide needed guidance concerning many aspects of the Act. 

Specifically, the Interim Rules state that employers cannot impose annual limits (subject to a 

three year phase-in) on essential health benefits. This prohibition fails to recognize two 

important developments in the area of employer-provided medical coverage: namely, the move 

towards dollar-denominated Health Reimbursement Arrangements (or “HRAs”) that are not 

linked to high deductible plans and also the widespread offering of reduced value health benefit 

 1

 Additional contributors to the these comments, on behalf of ENROLL and the associations identified in the 

text, include Morgan Lewis attorney Sage Fattahian. 
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plans for individuals in part-time or seasonal positions. As a consequence of these 

developments, we believe that the Interim Rules should be revised to provide a level playing 

field for all HRAs and, further, to encourage employers to continue to offer reduced value health 

benefit plans to part-time and seasonal employees through a robust waiver program that extends 

beyond annual limit concerns. 

There is boundless diversity among the employers, industries, unions, and benefit plans 

affected by the new healthcare reform laws. As reflected in the employers on whose behalf these 

comments are submitted, the new annual limit requirements profoundly affect healthcare benefits 

afforded to employees in railway transportation, trucking, integrated steel production, truck body 

production, biotechnology, chemical production, food product manufacturing, consumer 

packaging, publishing, broadcasting, heavy building materials, higher education, and municipal, 

state and federal governments. Based on the widely varying plan designs and workforces of 

these employers, and the range of changes and costs associated with the new requirements, the 

Interim Rules should respect and recognize this underlying diversity. The concept of annual 

limits, and the interpretations of the concept by the Interim Rules will reduce employer diversity 

and flexibility in the design of their medical plan coverages and may force employers to stop 

providing limited health benefits to part-time or seasonal employees. 

In order to reflect this diversity, the annual limit rules in the Interim Rules warrant 

modifications to advance the policies and purposes underlying the healthcare reform laws. 

SUMMARY OF COMMENTS

1. Part-Time And Limited Benefit Plans. The Interim Rules should allow employers to offer 

different health benefit plans to part-time employees and seasonal employees (as a contrast to 

dropping this coverage entirely) and also to continue to offer limited benefit plans under a 

robust waiver program. See pages 3-9.

(a) The Interim Rules Are Too Inflexible. Other Interim Rules do not reflect necessary 

flexibility and modifications to address a wide range of work forces. See pages 4-7. 

 Dependent Coverage To Age 26. The Dependent Rule constrains employer’s ability 

to recover the cost of the immediate mandate. See page 4. 

 Prohibition On Lifetime Limits. The prohibition on Lifetime Limits will create 

financial uncertainty for employers and will have widely varying cost impacts. See

pages 4-5. 

 Prohibition On Rescission. The Interim Rules impose unanticipated costs on 

standard plan administrative practices and are overbroad in relation to the perceived 

abuse in the traditional insurance market. See pages 5-6. 

 Grandfather Status. Loss of grandfather status, and application of grandfathered 

mandates, adds even further cost to coverage for part-time and seasonal workers. See

pages 6-7. 
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(b) The Annual Limit Rules Are Too Costly. The Interim Rules have widely disparate 

impacts on plans that currently contain annual limits and should be revised to permit 

plans to retain their current annual limits for part-time and seasonal workforces. See

pages 7-9. 

2. Dollar Denominated Accounts. The Interim Rules should allow employers to freely adopt 

and offer dollar denominated accounts (such as HRAs) that may, or may not be, linked to an 

underlying High Deductible Health Plan. See pages 9-10.

(a) The Act Does Not Eliminate Dollar Denominated Accounts. Dollar Denominated 

Accounts Predate High Deductible Health Plans and survive the passage of the Act. See

page 9. 

(b) Dollar Denominated Accounts Will Enjoy Greater Demand On And After 2014 And 

Provide An Important Tool For Both Individuals Covered And Not Covered Under 

The Employer Shared Responsibility Requirements. Many employers will use dollar 

denominated accounts to assist employees with their obligation to purchase health 

insurance in 2014 and beyond. See pages 9-10. 

DISCUSSION AND ANALYSIS

1. Part-Time And Limited Benefit Plans. The Interim Rules should allow employers to offer 

different health benefit plans to part-time or seasonal employees (as a contrast to dropping 

this coverage entirely) and also to continue to offer limited benefit plans under a robust 

waiver program. 

The Act prevents the application of longstanding lifetime and annual dollar limits (with 

minor transition rules in some instances). 

The Interim Rules fail to recognize, however, that many employers must, by business 

necessity and/or affordability requirements, impose such limits on health benefit plans for parttime or seasonal employees and, as a result, undermine, in important ways, the ability for 

employers to continue these types of coverage and for participants to enjoy even limited medical 

coverage. Worse yet, many of these plans will not be subject to the 2014 employer shared 

responsibility requirements and, as a result, are in grave danger of being dropped well before the 

Exchanges are up and running in 2014—thus decreasing, rather than increasing, the number of 

Americans with employer-provided health coverage. 

When added to the costly immediate mandates, including providing coverage to 

dependents up to age 26, the prohibition on rescission (hereinafter referred to as the “immediate 

mandates”) and the grandfathered mandates such as preventive services, emergency room visit 

parity and claims and appeals rules, the predictable result will in many cases be the elimination 

of current coverage for part-time or seasonal employees. This result will undermine efforts to 

advance healthcare reform, and should be accommodated in more concrete ways by the Interim 

Rules. 

The Interim Rules should allow employers to retain current coverage types and designs 

for part-time or seasonal employees through a significantly enhanced and meaningful waiver 
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program. This will allow these individuals to keep their current coverage. Allowing employers 

greater latitude to continue to offer such plans in the Interim Rules will translate into greater 

protection for ongoing coverage between now and January 1, 2014, thereby advancing the 

interests of healthcare reform. In 2014, if an employee is dissatisfied with the employersponsored coverage, the employee can enter the Exchanges. 

(a) The Interim Rules Are Too Inflexible. Other Interim Rules do not reflect necessary 

flexibility and modifications to address a wide range of work forces. 

The Act requires that all group health plans comply with the following costly immediate 

mandates in the first plan year beginning on or after September 23, 2010 (which for many 

employer sponsored plans is January 1, 2011). The Departments recognize the significant cost of 

these immediate mandates but fail to permit sufficient latitude in the Interim Rules for employers 

to respond to these increased costs for part-time or seasonal employees. Examples of these 

immediate mandates, and the costs drawn from the Department’s own estimates, are as follows: 

 Dependent Coverage To Age 26. The Dependent Rule itself constrains 

employer’s ability to recover the cost of the immediate mandate. 

While it is difficult to determine how many adult children will take this 

coverage, and/or how much it will cost to cover these children, the Interim 

Rules do acknowledge that adverse self-selection will occur, such that 

adult children in fair or poor health will likely enroll in their parents’ 

coverage, and the Departments’ “mid range” assessment indicates that 

premiums will be increased over three years by 2.6%. 

The Interim Rules provide no ability to share the cost of this coverage 

with employees. Moreover, in the context of collectively bargained plans, 

premiums cannot be raised mid-bargaining cycle. This leaves employers 

not currently in negotiations with no opportunity to seek to recoup those 

costs at this time. 

 Prohibition On Lifetime Limits. The prohibition on Lifetime Limits will create 

financial uncertainty for employers and will have widely varying cost impacts. 

According to the data provided in the Interim Rule, 45% of large 

employers have lifetime limits of $2 million or higher, and only 37% of 

large employers have no lifetime limits at all. The data also suggests that 

relatively few individuals actually hit their lifetime limits. However, selfinsured group plans that now have to eliminate their lifetime limits face 

financial uncertainty. The claims of one participant that are in excess of 

the current lifetime limit could have a significant negative impact on the 

health plan, including the possibility of bankrupting the plan. This is 

particularly true in the context of multi-employer plans, which in most 

cases are financed with limited employer contributions that are established 

in collective bargaining, and the investment income that is earned on such 
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contributions. If a multi-employer plan has to cover health care claims 

that run into the millions of dollars for one participant, it is possible that 

plan will not be able to pay for the claims of other participants. And, this 

scenario is a serious proposition considering the limited investment 

income currently available to these plans. Moreover, in most instances 

there is a corresponding multi-employer defined benefit pension plan. 

Due to the market losses of 2008 and the application of the Pension 

Protection Act of 2006, the contribution increases required to fund many 

of these plans are projected to be 10% or more in each of the next five 

years. In the past, the collective bargaining parties have been able to 

reduce contributions to the multi-employer health fund and to contribute 

the difference to the multi-employer pension plan. Because of the current 

economic crisis, contributing employers will be required to shoulder the 

burden of increased pension costs at the same time the proposed 

regulations are imposing significant health plan increases. This double hit 

may cause many contributing employers to reduce employment levels. 

The Interim Rules do acknowledge that dropping lifetime limits will 

increase costs, and that the average increase will be .5% of premiums, but 

this statistic may be misleading because the average includes plans with 

high or no lifetime limits with plans that have low limits. It is anticipated 

that the cost increases for plans with lower lifetime limits will experience 

cost increases in excess of .5%. 

 Prohibition On Rescission. The Interim Rules impose unanticipated costs on 

standard plan administrative practices and are overbroad in relation to the 

perceived abuse in the traditional insurance market. 

The Interim Rules take a very expansive view of this prohibition, and 

includes instances in which group health plans revoke health care 

coverage retroactively when an employee’s coverage is mistakenly 

continued. For example, if an individual is moved from full-time to parttime employment, but continues to receive full-time health benefits, or if 

an individual is terminated, but, due to ministerial error, his health 

coverage is not timely discontinued. This raises a quandary for group 

health plans because, if an ineligible employee’s coverage is mistakenly 

continued, it is the plan’s ERISA obligation to ensure that mistake is fixed 

in a fashion that does not waste plan assets. In the normal course, the 

health plan would terminate the individual’s coverage retroactively back 

to the proper date, and, as required, offer the participant COBRA 

continuation coverage. It is unclear whether that procedure would still be 

permissible under the new rescission rules. But, if not, the cost of 

covering these ineligible individuals will be another additional cost foisted 

on the employer. 

Further, these costs will likely be unaffordable to multi-employer plans 

that do not have “general assets” available to cover unexpected costs. 
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Moreover, in the multi-employer context, the only way that the plan would 

know if an employee has been terminated or moved to part-time status is if 

the employer timely informs the plan. In many instances multi-employer 

plans do not receive information on whether an employee worked during a 

given month until midway or later through the following month. So, in 

summary, multi-employer plans will be responsible for covering ineligible 

employees when their employers fail to timely or correctly notify of the 

employee’s termination or change to part-time status; and, arguably, this is 

a violation of ERISA because plan funds will be used to cover ineligible 

employees. The Departments were unable to estimate the cost impact of 

ending rescissions. 

 Grandfather Status. Loss of grandfather status, and application of grandfathered 

mandates, adds even further costs to coverage for part-time and seasonal workers. 

The grandfather Interim Rules contain unnecessarily narrow restrictions 

on the permissible changes that employers can make to their plans and still 

retain grandfathered status. When coupled with the cost of the immediate 

mandates, loss of grandfathered status under the Interim Rules will make it 

likely that employers will end all coverage for part-time or seasonal 

employees. The range of permissible grandfather financial actions should 

be tripled. 

Although the Departments may need to set some limits on the range of 

financial actions available to grandfathered plans, those limits should, at a 

minimum, reflect the actual increases of approximately 10% that 

employers and plans will experience due to implementing the immediate 

mandates, as well as anticipated (and true) medical inflation. The 

language of the Act contains no such restrictions, the current limits in the 

grandfather rule fall far short of reflecting the true increases in cost created 

by the Act, and there is nothing in the grandfather rule that indicates that 

the Departments considered setting limits that would permit the employers 

to shift some meaningful portion of the increased costs associated with the 

immediate mandates. 

Loss of grandfathered status means, among other things, having to comply 

with the Preventive Care requirements in the Interim Rule. But the Rule 

also acknowledges that “free” preventive services will result in an uptick 

in the use of such services, and it is the plan sponsors who are going to 

have to pay for those services without the benefit of any cost-sharing. 

While the Preventive Care Rule acknowledges that the data related to the 

costs of these services is uncertain, it posits that, based on the current cost 

of providing preventive care services, the full cost of providing such 

services for free will result in a 1.5% increase in premiums. 
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Because the limits contained in the current grandfather Interim Rules are 

so restrictive, and the cost of immediate mandates so high (not to mention 

the additional cost of grandfathered mandates if grandfather treatment is 

lost), the Departments should give serious consideration to revising the 

Rules to provide for all current grandfather limits to be tripled. This 

additional room will allow employers to adequately reflect the cost of the 

immediate mandates and, where necessary due to economic circumstances 

or collective bargaining restraints, pass the increased cost along to their 

employees without losing grandfather status. This expansion will allow 

the Interim Rules to reflect the spirit of President Obama’s pledge and 

reflect the unconstrained language of the Act. 

(b) The Annual Limit Rules Are Too Costly. The Interim Rules have widely disparate 

impacts on plans that currently contain annual limits and should be revised to permit 

plans to retain their current annual limits for part-time and seasonal workforces. 

According to the data in the Interim Rules, only 8.2% of large employers have annual 

limits. However, these statistics do not include multi-employer plans, which typically have 

annual limits. Moreover, it is likely that, during the transition period until 2014 during which 

annual limits are permitted but lifetime limits are not, certain plans will be converting their 

lifetime limits to annual limits. As such, it is likely that the 8.2% figure will rise substantially 

between now and 2014. 

For the group health plans that have annual limits, they are an important cost control 

measure, and losing or greatly restricting those limits will impose a heavy burden on those plans. 

While the impact of dropping annual limits will vary by plan size, the smallest plans are 

expected to face a premium increase of 6.6% over time as they move to the unrestricted annual 

limit. 

While the smallest plans will likely face significant premium increases, the restricted 

annual limits rule and lifetime limits prohibition will likely threaten the existence of limited 

health coverage options offered by many employers with significant part-time and seasonal 

workforces. For example, employers in the retail and supermarket industries commonly offer 

limited benefit plans to their part-time workers. This limited coverage provides important health 

coverage and has proven to be an important benefit for many of these participants. Application 

of the Act’s annual limits rule and lifetime limits prohibition will endanger the continued 

existence of this important coverage and may leave many workers without health coverage for 

years until 2014, when Exchange coverage becomes available. 

Limited benefit plans, including those offered to part-time retail and supermarket 

workers, typically involve significant waiting periods, offer expanded benefits over time,2

 and 

impose annual and lifetime limits that cap the employer’s coverage liability and often offer 

 2

 For example, a part time employee may, after 90 days of employment, become eligible for vision coverage. 

After an additional 90 days, a part time employee may become eligible for dental coverage. After an additional six 

months, the part time employee becomes eligible for medical coverage. 
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employee-only coverage. While the coverage is “limited” in nature, it serves an important 

purpose. Limited benefit plans allow approximately 1.4 million workers access to affordable 

health coverage for a majority of key medical issues. 

Without limited benefit plans, many workers will not have access to health coverage until 

2014. Application of the restricted annual limits rule and lifetime limits prohibition to these 

plans will result in substantial cost increases for employers. Such cost increases could cause 

employers either to significantly raise premiums, rendering coverage unaffordable for many 

workers, or to drop coverage entirely. In either event, many workers may be left without health 

coverage. 

Such a result was certainly not among the Act’s intended consequences. President 

Obama and Congress have assured the public that the Act would not affect an individual’s ability 

to retain health coverage that satisfied his or her needs. Indeed, both have explained that the Act, 

in general, and the grandfather rule, in particular, were intended to allow workers to keep 

employer-sponsored coverage with which they are satisfied. It would be counterproductive if the 

Act and the annual limit rules resulted in the loss of coverage for a significant number of workers 

rather than the preservation, improvement, and expansion of coverage, as was intended. 

Moreover, although the statute does not explicitly address the application of the coverage 

mandates to part-time or limited benefit plans, it appears that Congress did not generally intend 

the Act’s coverage mandates to apply to part-time plans that currently offer limited coverage. 

Conversely, the provisions regarding employer penalties related to Minimum Essential 

Coverage, which become effective on January 1, 2014, do address part-time coverage. The 

statute makes clear that the penalties are not triggered by failure to provide health care coverage 

to part-time employees. The fact that employers will face no penalties for failing to offer 

coverage of any kind to part-time employees in 2014 combined with the huge cost increases that 

will result when the restricted annual limits rule and lifetime limit prohibition become effective 

will likely prompt employers to drop part-time coverage well before the Exchanges come on line 

in 2014. This will add to the ranks of the uninsured for at least the next three years. 

To preserve until 2014 the important health care benefits that 1.4 million workers enjoy 

under limited benefit plans, such plans should be exempted entirely from the immediate 

mandates, particularly the restricted annual limits rule and the lifetime limits prohibition. This 

exemption would be consistent with Congress’s apparent intention to apply the Act’s 2014 rules 

only to full-time employee coverage. If a complete exemption is not permitted, then the waiver 

program, contemplated in the Interim Rule, should be implemented with no restrictions on the 

annual limits that these limited benefit plans can impose. Under the waiver program, plans 

seeking a waiver will have to show that compliance with the restricted annual limits would either 

significantly diminish benefits access or cause significant premium increases for the limited 

benefit coverage. The Departments should ensure that the burden of seeking a waiver is not so 

great that employers choose to discontinue limited benefits coverage rather than seek a waiver. 

The immediate and grandfathered mandates detailed above (including the annual limit 

elimination) significantly increase the employers’ cost of providing such coverage. For some 

employers, the cost of the immediate and grandfathered mandates will be at least 11.2% of 
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premiums. This additional cost, as applied to part-time or seasonal employees who are not 

subject to the shared responsibility requirements in 2014 is a sure recipe for disaster and a likely 

reason for completely eliminating such coverage. The Interim Rules should be modified to 

permit employers to continue part-time and seasonal health benefits without change under a 

robust, effective, timely and inexpensive worker program. 

2. Dollar Denominated Accounts. The Interim Rules should allow employers to freely adopt 

and offer dollar denominated accounts (such as HRAs) that may, or may not be, linked to an 

underlying High Deductible Health Plan. 

The Act generally prohibits establishing annual or lifetime limits on the dollar value of 

benefits and also permits limited annual limits before 2014 for essential health benefits. The 

Act, however, goes on to state in amended section 2711(b) of the Public Health Service Act that: 

(b) PER BENEFICIARY LIMITS.—Subsection (a) shall not be construed to prevent a 

group health plan or health insurance coverage from placing annual or lifetime per 

beneficiary limits on specific covered benefits that are not essential health benefits under 

section 1302(b) of the Patient Protection and Affordable Care Act, to the extent that such 

limits are otherwise permitted under Federal or State law. 

(a) The Act Does Not Eliminate Dollar Denominated Accounts. Dollar Denominated 

Accounts Predate High Deductible Health Plans and survive the passage of the Act. 

We believe that the language in 2711(b) above specifically supports the continued 

existence of HRAs as they are already permitted under Federal Law (See IRS Notice 2002-45, 

2002-28 IRB 93; Rev. Rul. 2002-41, 2002-28 IRB 75), have not been changed by the Act and are 

not essential health benefits under section 1302 of the Act. 

Finally, the language quoted immediately above does not require such HRAs to be linked 

to a High Deductible Plan or, for that matter, any other plan whether or not the other plan 

complies with the Act. This conclusion is echoed under the Interim Rules where the Rules 

specifically recognize the continued vitality of health FSAs, MSAs and HSAs (See 75 Fed. Reg. 

37190 (June 28, 2010), along with HRAs that are linked to High Deductible Health Plans. 

Surely the language of 2711(b), which is the basis for this conclusion, must also, without further 

action on the part of Congress, reach to a stand-alone HRA and allow it to continue without 

application of any annual limit. 

(b) Dollar Denominated Accounts Will Enjoy Greater Demand On And After 2014 And 

Provide An Important Tool For Both Individuals Covered And Not Covered Under 

The Employer Shared Responsibility Requirements. Many employers will use dollar 

denominated accounts to assist employees with their individual obligation to purchase 

health insurance in 2014 and beyond. 

Many employers have large part-time or seasonal workforces that are not part of the 

employer’s shared responsibility requirements in 2014. In order to assist these individuals with 

the cost of their coverage (or help with out of pocket or co-payment costs) employers must be 

able to establish HRAs that are not linked to High Deductible Health Plans. While some of these 
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opportunities are available through health FSAs, the inability to use a health FSA for medical 

insurance premiums (in contrast to an HRA) and the annual use-it-or-lose-it nature of a health 

FSA will not encourage participants to husband their HRA balances for future medical expenses 

or adopt consumer-directed principles and practices that will save the Exchanges from paying for 

needless medical procedures. By contrast, establishing an HRA for these individuals will 

encourage them to shop for affordable Exchange plans, only utilize necessary medical 

procedures, and realize that HRA funds not spent in a current year can roll over and be used in 

future years. As such, stand-alone HRAs will enjoy even greater demand in the future and 

encourage employers to continue their subsidy for medical coverage when part-time and seasonal 

employees are able to gain meaningful access to individual Exchange coverage in 2014. 

The demand for stand-alone HRAs will not, however, be limited to part-time or seasonal 

employees. Some employers will determine that it is in their financial best interest to no longer 

provide health care to their full time employees and thus pay any associated shared responsibility 

payment. These employers may still want to provide direct financial support to their employees 

in the form of a subsidy for Exchange premiums or to meet out of pocket or co-payment costs 

under their selected Exchange plan. While this may not be an ideal situation from the 

perspective of Exchange participation and costs, it is certainly far preferable for an employer to 

continue to provide some subsidy for health coverage through an HRA instead of not providing 

any subsidy beyond its indirect payment of the shared responsibility payment. In fact, the best 

approach of all would be for the entire shared responsibility payment to be available to the 

employee through an HRA and serve to offset, on a dollar for dollar basis, the shared 

responsibility payment to the Federal Government. 
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CONCLUSION

We hope that the Departments will consider the comments set forth above and 

incorporate them in the Final Rules, consistent with the Affordable Care Act, the Reconciliation 

Act, and the interests of employers, employees and other healthcare benefit plan participants. 

We remain available to meet and consult with representatives of the Departments and to provide 

any other assistance that will facilitate development of the final regulations. 

Respectfully submitted, 

EMPLOYERS NETWORK FOR RESPONSIBLE 

OPTIONS, LAWS AND LEADERSHIP 

INTERNATIONAL PUBLIC MANAGEMENT 

ASSOCIATION FOR HUMAN RESOURCES

COLLEGE AND UNIVERSITY PROFESSIONAL 

ASSOCIATION FOR HUMAN RESOURCES

NATIONAL RAILWAY LABOR CONFERENCE

 Of Counsel 

ANDY R. ANDERSON

PHILIP A. MISCIMARRA

STEVEN D. SPENCER

JOHN F. RING

MORGAN LEWIS & BOCKIUS LLP 

1111 Pennsylvania Avenue, NW 

Washington, DC 20004-2541 

202-739-3000 

DATED: August 27, 2010 
DB1/65511542.3 

The Employers Network for Responsible Options, Laws and Leadership (ENROLL) consists of 

companies and associations that have a shared commitment to the responsible administration 

of healthcare benefit plans in the context of new requirements imposed under the Patient 

Protection and Affordable Care Act, Pub. L. No. 111–148 (March 23, 2010) and the Health Care 

and Education Reconciliation Act, Pub. L. No. 111-152 (March 30, 2010) (“Reconciliation Act”). 

ENROLL participants include the International Public Management Association for Human 

Resources, the College and University Professional Association for Human Resources, the 

National Railway Labor Conference, United States Steel Corporation, ArcelorMittal, Tribune 

Company, Trucking Management Inc., Lehigh Hanson, Inc., Bemis Company, Inc., Pactiv 

Corporation, Eppendorf, Inc., M&G Polymers USA, LLC, The Knapheide Manufacturing 

Company, McCain Foods USA, Inc., and other employers. 

The International Public Management Association for Human Resources (IPMA-HR) is an 

organization that represents the interests of human resource professionals at the federal, state 

and local levels of government. IPMA-HR includes more than 5,500 federal, state and local 

human resource professionals throughout the United States. 

The College and University Professional Association for Human Resources (CUPA-HR) is 

devoted to the higher education human resources profession and the higher education 

community, and consists of more than 12,000 higher education human resources professionals 

at more than 1,700 colleges, universities and other institutions associated with higher education. 

The participants in CUPA-HR encompass approximately 90 percent of the doctoral institutions, 

70 percent of the master’s institutions, 50 percent of the bachelor’s institutions and close to 500 

two-year and specialized institutions throughout the United States. 

The National Railway Labor Conference (NRLC) represents member railroads throughout the 

United States in collective bargaining, labor relations, health and welfare benefits, and other 

employment-related matters. The NRLC dates back to 1963, resulting from the merger of three 

separate regional carriers conference committees which previously represented railway carriers 

in the Eastern, Western and Southeastern United States. Organized within the NRLC is the 

National Carriers' Conference Committee (NCCC), one of the two components of the joint plan 

committee which serves as a fiduciary and administrator of the Railroad Employees National 

Health & Welfare Plan. 

APPENDIX