[Federal Register Volume 84, Number 37 (Monday, February 25, 2019)]
[Proposed Rules]
[Pages 5969-5972]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03170]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 144, 146, and 147

[CMS-9923-NC]


Request for Information Regarding Grandfathered Group Health 
Plans and Grandfathered Group Health Insurance Coverage

AGENCY: Internal Revenue Service, Department of the Treasury; Employee 
Benefits Security Administration, Department of Labor; Centers for 
Medicare & Medicaid Services, Department of Health and Human Services.

ACTION: Request for information.

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SUMMARY: This document is a request for information regarding 
grandfathered group health plans and grandfathered group health 
insurance coverage. Given the limited information available regarding 
such coverage, the Department of the Treasury, the Department of Labor, 
and the Department of Health and Human Services (the Departments) are 
issuing this request for information to gather input from the public in 
order to better understand the challenges that group health plans and 
group health insurance issuers face in avoiding a loss of grandfathered 
status, and to determine whether there are opportunities for the 
Departments to assist such plans and issuers, consistent with the law, 
in preserving the grandfathered status of group health plans and group 
health insurance coverage in ways that would benefit employers, 
employee organizations, plan participants and beneficiaries, and other 
stakeholders.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on March 27, 2019.

ADDRESSES: Written comments may be submitted to the addresses specified 
below. Any comment that is submitted will be shared among the 
Departments. Please do not submit duplicates.
    All comments will be made available to the public. Warning: Do not 
include any personally identifiable information (such as name, address, 
or other contact information) or confidential business information that 
you do not want publicly disclosed. All comments are posted on the 
internet exactly as received and can be retrieved by most internet 
search engines. No deletions, modifications, or redactions will be made 
to the comments received, as they are public records. Comments may be 
submitted anonymously.
    In commenting, refer to file code CMS-9923-NC. Because of staff and 
resource limitations, we cannot accept comments by facsimile (FAX) 
transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention:

[[Page 5970]]

CMS-9923-NC, P.O. Box 8013, Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-9923-NC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: William Fischer, Internal Revenue 
Service, Department of the Treasury, at (202) 317-5500.
    Matthew Litton or David Sydlik, Employee Benefits Security 
Administration, Department of Labor, at (202) 693-8335.
    Kiahana Brooks, Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, at (301) 492-4400.
    Customer Service Information: Individuals interested in obtaining 
information from the Department of Labor (DOL) concerning employment-
based health coverage laws may call the EBSA Toll-Free Hotline at 1-
866-444-EBSA (3272) or visit the DOL's website (www.dol.gov/ebsa). In 
addition, information from the Department of Health and Human Services 
(HHS) on private health insurance coverage and on nonfederal 
governmental group health plans can be found on the Centers for 
Medicare & Medicaid Services (CMS) website (www.cms.gov/cciio), and 
information on health care reform can be found at www.HealthCare.gov.

SUPPLEMENTARY INFORMATION:
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. Comments received before the 
close of the comment period are posted on the following website as soon 
as possible after they have been received: http://www.regulations.gov. 
Follow the search instructions on that website to view public comments.

I. Background

A. Purpose

    On January 20, 2017, the President issued Executive Order 13765, 
``Minimizing the Economic Burden of the Patient Protection and 
Affordable Care Act Pending Repeal,'' (82 FR 8351) ``to minimize the 
unwarranted economic and regulatory burdens of the [Patient Protection 
and Affordable Care Act (Pub. L. 111-148) and the Health Care and 
Education Reconciliation Act of 2010 (Pub. L. 111-152) (collectively, 
PPACA), as amended].'' To meet these objectives, the President directed 
that the executive departments and agencies with authorities and 
responsibilities under PPACA, ``to the maximum extent permitted by law 
. . . shall exercise all authority and discretion available to them to 
waive, defer, grant exemptions from, or delay the implementation of any 
provision or requirement of [PPACA] that would impose a fiscal burden 
on any State or a cost, fee, tax, penalty, or regulatory burden on 
individuals, families, healthcare providers, health insurers, patients, 
recipients of healthcare services, purchasers of health insurance, or 
makers of medical devices, products, or medications.''
    The Departments share interpretive jurisdiction over section 1251 
of PPACA, which, as described in more detail in section I.B of this 
document, generally provides that certain group health plans and health 
insurance coverage existing as of March 23, 2010, the date of enactment 
of PPACA, (that is, grandfathered health plans) are subject to only 
certain provisions of PPACA. Consistent with the objectives of 
Executive Order 13765, the Departments are issuing this request for 
information to gather input from the public in order to better 
understand the challenges that group health plans and group health 
insurance issuers face in avoiding a loss of grandfathered status and 
to determine whether there are opportunities for the Departments to 
assist such plans and issuers, consistent with the law, in preserving 
the grandfathered status of group health plans and group health 
insurance coverage in ways that would benefit employers, employee 
organizations, plan participants and beneficiaries, and other 
stakeholders.

B. Grandfathered Group Health Plans and Grandfathered Group Health 
Insurance Coverage

    Section 1251 of PPACA provides that grandfathered health plans are 
subject to only certain provisions of PPACA, for as long as they 
maintain their status as grandfathered health plans.\1\ For example, 
grandfathered health plans are neither subject to the requirement to 
cover certain preventive services without cost sharing under section 
2713 of the PHS Act, enacted by section 1001 of PPACA, nor the annual 
limitation on cost sharing set forth under section 1302(c) of PPACA and 
section 2707(b) of the PHS Act, enacted by section 1201 of PPACA.
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    \1\ For a list of the market requirement provisions under title 
XXVII of the Public Health Service Act (PHS Act), as added or 
amended by PPACA, and incorporated into the Employee Retirement 
Income Security Act of 1974 and the Internal Revenue Code of 1986, 
applicable to grandfathered health plans, visit https://www.dol.gov/sites/default/files/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/grandfathered-health-plans-provisions-summary-chart.pdf.
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    On June 17, 2010, the Departments issued interim final rules with 
request for comments implementing section 1251 of PPACA (75 FR 34538). 
On November 17, 2010, the Departments issued an amendment to the 
interim final rules with request for comments to permit certain changes 
in policies, certificates, or contracts of insurance without loss of 
grandfathered status (75 FR 70114). Also, over the course of 2010 and 
2011, the Departments released Affordable Care Act Implementation 
Frequently Asked Questions (FAQs) Parts I, II, IV, V, and VI to answer 
questions related to maintaining a plan's status as a grandfathered 
health plan.\2\ After consideration of the comments and feedback 
received from stakeholders, the Departments issued regulations on 
November 18, 2015 (80 FR 72192) (November 2015 final rules) that 
finalized the interim final rules without substantial change and 
incorporated the clarifications that the Departments had previously 
provided in other guidance.
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    \2\ See Affordable Care Act Implementation FAQs Part I, 
available at https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-i.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs.html; Affordable Care Act Implementation 
FAQs Part II, available at https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-ii.pdf 
and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs2.html; Affordable Care Act Implementation 
FAQs Part IV, available at https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-iv.pdf 
and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs4.html; Affordable Care Act Implementation 
FAQs Part V, available at https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-v.pdf 
and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs5.html; and Affordable Care Act 
Implementation FAQs Part VI, available at https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-vi.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs6.html.
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    In general, under the November 2015 final rules,\3\ a group health 
plan or group health insurance coverage is considered grandfathered if 
it has

[[Page 5971]]

continuously provided coverage for someone (not necessarily the same 
person, but at all times at least one person) since March 23, 2010, and 
if it has not ceased to be a grandfathered plan due to certain actions 
taken by the plan (or its sponsor) or issuer.
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    \3\ See 26 CFR 54.9815-1251, 29 CFR 2590.715-1251, and 45 CFR 
147.140.
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    The November 2015 final rules specify when changes to the terms of 
a plan or coverage cause the plan or coverage to cease to be a 
grandfathered health plan. Specifically, the regulations outline 
certain changes to benefits, cost-sharing requirements, and 
contribution rates that will cause a plan or coverage to relinquish its 
grandfathered status. The November 2015 final rules state that such 
changes will cause a plan or coverage to cease to be a grandfathered 
plan when the changes become effective, regardless of when such changes 
are adopted. In addition, the November 2015 final rules require that a 
plan or coverage include a statement that it believes the plan or 
coverage is a grandfathered health plan, as well as provide contact 
information for questions and complaints, in any summary of benefits 
provided under the plan.
    The November 2015 final rules further provide that, once 
grandfathered status is relinquished, there is no opportunity to cure 
the loss of grandfathered status. Although the Departments are 
interested in ways to assist grandfathered group health plans and 
grandfathered group health insurance coverage in maintaining their 
grandfathered status, in the Departments' view, there is no authority 
for non-grandfathered plans to become grandfathered.
    Under the November 2015 final rules, certain changes to a group 
health plan or coverage will not result in a loss of grandfathered 
status. For example, new employees and their beneficiaries may enroll 
in a group health plan or group health insurance coverage without 
causing a loss of grandfathered status. Further, the addition of a new 
contributing employer or a new group of employees of an existing 
contributing employer to a grandfathered multiemployer health plan will 
not affect the plan's grandfathered status. Also, grandfathered status 
is determined separately for each benefit package under a group health 
plan or coverage; thus, if any benefit package under the plan or 
coverage loses its grandfathered status, it will not affect the 
grandfathered status of the other benefit packages.
    It is the Departments' understanding that the number of group 
health plans and group health insurance policies that are considered to 
be grandfathered has declined each year since the enactment of PPACA, 
but many employers continue to maintain group health plans and coverage 
that have retained grandfathered status. The Kaiser Family Foundation's 
annual Employer Health Benefits Survey estimates that approximately 20 
percent of employers that offered health benefits to their employees 
offered at least one grandfathered group health plan in 2018, a 
decrease from 72 percent in 2011.\4\ The same study also estimates that 
16 percent of American workers with employer-sponsored coverage were 
enrolled in a grandfathered group health plan in 2018, a decrease from 
56 percent in 2011. If these estimates are correct, the fact that a 
significant number of grandfathered group health plans remain indicates 
that some employers and issuers have found value in preserving 
grandfathered status, and that some consumers, when given the choice 
between grandfathered and non-grandfathered employer plans, have found 
value in choosing to remain in their grandfathered group health plans 
and coverage.
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    \4\ 2018 Employer Health Benefits Survey, Kaiser Family 
Foundation, available at https://www.kff.org/report-section/2018-employer-health-benefits-survey-section-13-grandfathered-health-plans/. See also 2011 Employer Health Benefits Survey, Kaiser Family 
Foundation, available at: https://kaiserfamilyfoundation.files.wordpress.com/2013/04/8225.pdf; and 
Kaiser Health News FAQ: Grandfathered Health Plans at: http://khn.org/news/grandfathered-plans-faq/. Also, the Agency for 
Healthcare Research and Quality, Center for Financing, Access and 
Cost Trends reports that 22.1 percent of employees were enrolled in 
grandfathered health plans in 2017 according to 2017 Medical 
Expenditure Panel Survey-Insurance Component (MEPS-IC) data. The 
related MEPS-IC survey is available at: https://meps.ahrq.gov/survey_comp/ic_survey/2017/meps10.s.htm.
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    With respect to the individual market, it is the Departments' 
understanding that the number of individuals with grandfathered 
individual health insurance coverage has declined each year since PPACA 
was enacted and only a small number of individuals are currently 
enrolled in grandfathered individual health insurance coverage.\5\ 
Further, grandfathered coverage may not be sold in the individual 
market to new policyholders. For these reasons, this request for 
information focuses on grandfathered group health plan and 
grandfathered group health insurance coverage, and does not address 
grandfathered individual health insurance coverage.
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    \5\ See 83 FR 54420, 54429 (Oct. 29, 2018).
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II. Solicitation of Comments

    The Departments are requesting comments to contribute to the 
Departments' understanding of the issues related to grandfathered 
health plans, and to estimate the impact of any potential changes to 
the rules for retention of grandfathered status for group health plans 
and group health insurance coverage, both generally and with respect to 
the following specific areas:

A. Maintaining (or Relinquishing) Grandfathered Status

    1. What actions could the Departments take, consistent with the 
law, to assist group health plan sponsors and group health insurance 
issuers preserve the grandfathered status of a group health plan or 
coverage?
    2. What challenges do group health plan sponsors and group health 
insurance issuers face regarding retaining the grandfathered status of 
a plan or coverage? Does any particular requirement(s) for maintaining 
grandfathered status create more challenges than others, and if so, how 
could the requirement(s) be modified to reduce such challenges?
    3. For group health plan sponsors and group health insurance 
issuers that have chosen to preserve grandfathered status of their 
plans or coverage, what are the primary reasons for doing so? If 
grandfathered status is preserved so that particular PPACA requirements 
will not apply to the plan, please specify the particular PPACA 
requirements not included in the grandfathered plan and explain any 
related concerns.
    4. What are the reasons why participants and beneficiaries have 
remained enrolled in grandfathered group health plans if alternatives 
are available?
    5. What are the costs, benefits, and other factors considered by 
plan sponsors and health insurance issuers when considering whether to 
retain grandfathered status of their plans or coverage?
    6. Is preserving grandfathered status important to group health 
plan participants and beneficiaries? If so, which participants and 
beneficiaries benefit the most and which, if any, are affected 
detrimentally by the employer offering grandfathered group health plan 
coverage?
    7. What is the typical change in benefits, employer contributions 
or employee organization contributions, and cost-sharing requirements 
that causes a grandfathered group health plan or grandfathered group 
health insurance coverage to lose its grandfathered status?
    8. Do the grandfathered health plan disclosure requirements in the 
November 2015 final rules provide adequate, useful, and timely 
information to plan participants and

[[Page 5972]]

beneficiaries regarding grandfathered status? If not, how could the 
disclosure be improved?

B. General Information About Grandfathered Group Health Plans and Group 
Health Insurance Coverage

    1. Other than the Kaiser Family Foundation's ``Employer Health 
Benefits Annual Survey,'' and the MEPS-IC survey, what data resources 
are available to help the Departments better understand how many group 
health plans and group health insurance policies are considered 
grandfathered and how many participants and beneficiaries are enrolled 
in such plans and coverage?
    2. What are the characteristics (for example, plan size, geographic 
areas, or industries) of grandfathered group health plans and the plan 
sponsors and group health insurance issuers that have chosen to retain 
the grandfathered status of their plans or coverage? Do grandfathered 
group health plans or the plan sponsors and group health insurance 
issuers that have chosen to retain the grandfathered status of their 
plans or coverage share common characteristics?
    3. Do group health plan sponsors and group health insurance issuers 
that have chosen to retain grandfathered status for certain plans, 
benefit packages, or policies also offer other plans, benefit packages, 
or policies that are not grandfathered? If so, why?
    4. What are the typical differences in benefits, cost-sharing, and 
premiums (including employer contributions, employee organization 
contributions, and employee contributions) associated with 
grandfathered group health plans and grandfathered group health 
insurance coverage compared to non-grandfathered group health plans?
    5. How many group health plan sponsors and group health insurance 
issuers are considering making changes to their plans or coverage over 
the next few years that are likely to cause loss of grandfathered 
status under the November 2015 final rules? How many individuals would 
be affected?
    6. What impact do grandfathered group health plans and 
grandfathered group health insurance coverage have on the individual 
and small group market risk pools?

III. Collection of Information Requirements

    This document does not impose information collection requirements, 
that is, reporting, recordkeeping or third-party disclosure 
requirements. However, section II of this document does contain a 
general solicitation of comments in the form of a request for 
information. In accordance with the implementing regulations of the 
Paperwork Reduction Act of 1995 (PRA), specifically 5 CFR 1320.3(h)(4), 
this general solicitation is exempt from the PRA. Facts or opinions 
submitted in response to general solicitations of comments from the 
public, published in the Federal Register or other publications, 
regardless of the form or format thereof, provided that no person is 
required to supply specific information pertaining to the commenter, 
other than that necessary for self-identification, as a condition of 
the agency's full consideration, are not generally considered 
information collections and therefore not subject to the PRA. 
Consequently, there is no need for review by the Office of Management 
and Budget under the authority of the PRA.

    Signed at Washington, DC, this 13th day of February 2019.
Victoria Judson,
Associate Chief Counsel (Employee Benefits, Exempt Organizations, and 
Employment Taxes), Internal Revenue Service, Department of the 
Treasury.
    Signed at Washington, DC, this 19th day of February, 2019.
Carol Weiser,
Acting Benefits Tax Counsel, Department of the Treasury.
    Signed at Washington, DC, this 13th day of February 2019.
Preston Rutledge,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
    Dated: February 13, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: February 13, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-03170 Filed 2-21-19; 4:15 pm]
BILLING CODE 4510-29-P; 4830-01-P; 4120-01-P