[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]
=======================================================================
-----------------------------------------------------------------------
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.
-----------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\3\ See 26 CFR 54.9815-1251, 29 CFR 2590.715-1251, and 45 CFR
147.140.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\5\ See 83 FR 54420, 54429 (Oct. 29, 2018).
---------------------------------------------------------------------------
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