[Federal Register Volume 75, Number 116 (Thursday, June 17, 2010)]
[Proposed Rules]
[Pages 34571-34572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14487]



  Federal Register / Vol. 75, No. 116 / Thursday, June 17, 2010 / 
Proposed Rules  

[[Page 34571]]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[REG-118412-10]
RIN 1545-BJ50


Group Health Plans and Health Insurance Coverage Rules Relating 
to Status as a Grandfathered Health Plan Under the Patient Protection 
and Affordable Care Act

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

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SUMMARY: Elsewhere in this issue of the Federal Register, the IRS is 
issuing temporary regulations under the provisions of the Patient 
Protection and Affordable Care Act (the Affordable Care Act) dealing 
with rules relating to status as a grandfathered health plan. The IRS 
is issuing the temporary regulations at the same time that the Employee 
Benefits Security Administration of the U.S. Department of Labor and 
the Office of Consumer Information and Insurance Oversight of the U.S. 
Department of Health and Human Services are issuing substantially 
similar interim final regulations with respect to group health plans 
and health insurance coverage offered in connection with a group health 
plan under the Employee Retirement Income Security Act of 1974 and the 
Public Health Service Act. The temporary regulations provide guidance 
to employers, group health plans, and health insurance issuers 
providing group health insurance coverage. The text of those temporary 
regulations also serves as the text of these proposed regulations.

DATES: Written or electronic comments and requests for a public hearing 
must be received by September 15, 2010.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-118412-10), room 
5205, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered to: 
CC:PA:LPD:PR (REG-118412-10), Courier's Desk, Internal Revenue Service, 
1111 Constitution Avenue, NW., Washington DC 20224. Alternatively, 
taxpayers may submit comments electronically via the Federal 
eRulemaking Portal at http://www.regulations.gov (IRS REG-118412-10).

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Karen 
Levin at 202-622-6080; concerning submissions of comments or to request 
a hearing, Regina Johnson, 202-622-7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information contained in this notice of proposed 
rulemaking has been submitted to the Office of Management and Budget 
for review in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)). Comments on the collection of information should be 
sent to the Office of Management and Budget, Attn: Desk Officer for the 
Department of the Treasury, Office of Information and Regulatory 
Affairs, Washington, DC 20503, with copies to the Internal Revenue 
Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, 
Washington, DC 20224. Comments on the collection of information should 
be received by August 16, 2010. Comments are specifically requested 
concerning:
     Whether the proposed collection of information is 
necessary for the proper performance of the functions of the Internal 
Revenue Service, including whether the information will have practical 
utility;
     The accuracy of the estimated burdens associated with the 
proposed collection of information (see the preamble to the temporary 
regulations published elsewhere in this issue of the Federal Register);
     How to enhance the quality, utility, and clarity of the 
information to be collected;
     How to minimize the burden of complying with the proposed 
collection of information, including the application of automated 
collection techniques or other forms of information technology; and
     Estimates of capital or start-up costs and costs of 
operation, maintenance, and purchase of services to provide 
information.
    The collections of information are in Sec.  54.9815-1251T(a)(2) and 
(a)(3) (see the temporary regulations published elsewhere in this issue 
of the Federal Register). The temporary regulations require any group 
health plan or group health insurance coverage intended to be a 
grandfathered health plan to include in any description of plan 
benefits provided to participants or beneficiaries a statement that the 
plan or issuer believes the plan or health insurance coverage is a 
grandfathered health plan under section 1251 of the Affordable Care 
Act. The temporary regulations provide model language for this purpose. 
The temporary regulations also require any such plan or issuer to 
maintain records documenting the terms of the plan or health insurance 
coverage on March 23, 2010 and any other documents necessary to verify, 
explain, or clarify its status as a grandfathered health plan. The 
likely respondents to the collections of information requirements are 
business or other for-profit institutions, and nonprofit institutions. 
Responses to this collection of information are mandatory if a plan or 
health insurance coverage is intended to be a grandfathered health plan 
under the Affordable Care Act.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by the Office of Management and Budget.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally tax returns and 
tax return information are confidential, as required by 26 U.S.C. 6103.

Background

    The temporary regulations published elsewhere in this issue of the 
Federal Register add Sec.  54.9815-1251T to the Miscellaneous Excise 
Tax Regulations. The proposed and temporary regulations are being 
published as part of a joint rulemaking with the Department of Labor 
and the Department of Health and Human Services (the joint rulemaking). 
The text of those temporary regulations also serves as the text of 
these proposed regulations. The preamble to the temporary regulations 
explains the temporary regulations and these proposed regulations.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866. Therefore, a regulatory assessment is not required. It has also 
been determined that section 553(b) of the Administrative Procedure Act 
(5 U.S.C. chapter 5) does not apply to this proposed regulation. It is 
hereby certified that the collections of information contained in this 
notice of proposed rulemaking will not have a significant impact on a 
substantial number of small entities. Accordingly, a regulatory 
flexibility analysis is not required.
    The temporary regulations require any group health plan or group 
health insurance coverage intended to be a grandfathered health plan to 
include in

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any description of plan benefits provided to participants or 
beneficiaries a statement that the plan or issuer believes the plan or 
health insurance coverage is a grandfathered health plan under section 
1251 of the Affordable Care Act. The temporary regulations provide 
model language for this purpose. This disclosure requirement applies 
only when the plan or issuer is otherwise distributing a description of 
plan benefits. For group health plans maintained by small entities, it 
is anticipated that the health insurance issuer will prepare the 
description of plan benefits in almost all cases. Thus, there will 
almost always be no burden of statement preparation imposed on small 
business entities. Because the distribution is not required other than 
when a description of plan benefits is otherwise provided, the 
distribution requirement will not add any burden to plans maintained by 
small business entities. For this reason, the information collection 
requirement of providing a statement, in descriptions of plan benefits, 
that the plan is intended to be a grandfathered health plan will not 
impose a significant impact on a substantial number of small entities.
    The temporary regulations also require any plan or issuer intending 
the group health plan or health insurance coverage to be a 
grandfathered health plan to maintain records documenting the terms of 
the plan or health insurance coverage on March 23, 2010 and any other 
documents necessary to verify, explain, or clarify its status as a 
grandfathered health plan. Under the temporary regulations, if a 
sponsor of a group health plan switches to an insurance policy under 
which none of its employees was covered on March 23, 2010, the plan 
ceases to be a grandfathered health plan. Thus, an insured plan can 
maintain its status as a grandfathered health plan only by renewing its 
contract with the same health insurance issuer. Almost all plans 
maintained by small business entities are insured plans, and the issuer 
is also required to satisfy this recordkeeping requirement for the 
health insurance coverage to remain a grandfathered health plan. It is 
anticipated that the issuer will satisfy this recordkeeping obligation 
for almost all small businesses. For this reason, this information 
collection requirement will not impose a significant impact on a 
substantial number of small entities.
    For further information and for analyses relating to the joint 
rulemaking, see the preamble to the joint rulemaking. Pursuant to 
section 7805(f) of the Internal Revenue Code, this regulation has been 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on its impact on small business.

Comments and Requests for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written comments (a signed original 
and eight (8) copies) or electronic comments that are submitted timely 
to the IRS. Comments are specifically requested on the clarity of the 
proposed regulations and how they may be made easier to understand. All 
comments will be available for public inspection and copying. A public 
hearing may be scheduled if requested in writing by a person that 
timely submits written comments. If a public hearing is scheduled, 
notice of the date, time, and place for the hearing will be published 
in the Federal Register.

Drafting Information

    The principal author of these proposed regulations is Karen Levin, 
Office of the Division Counsel/Associate Chief Counsel (Tax Exempt and 
Government Entities), IRS. The proposed regulations, as well as the 
temporary regulations, have been developed in coordination with 
personnel from the U.S. Department of Labor and the U.S. Department of 
Health and Human Services.

List of Subjects in 26 CFR Part 54

    Excise taxes, Health care, Health insurance, Pensions, Reporting 
and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 54 is proposed to be amended as follows:

PART 54--PENSION EXCISE TAXES

    Paragraph 1. The authority citation for part 54 is amended by 
adding an entry in numerical order to read as follows:

    Authority: 26 U.S.C. 7805 * * *

    Section 54.9815-1251 also issued under 26 U.S.C. 9833. * * *

    Par. 2. Section 54.9815-1251 is added to read as follows:


Sec.  54.9815-1251  Preservation of right to maintain existing 
coverage.

    [The text of proposed Sec.  54.9815-1251 is the same as the text of 
Sec.  54.9815-1251T published elsewhere in this issue of the Federal 
Register].

Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2010-14487 Filed 6-14-10; 11:15 am]
BILLING CODE 4830-01-P