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Amendment to the Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act   [11/17/2010]
[PDF]
FR Doc 2010-28861
[Federal Register: November 17, 2010 (Volume 75, Number 221)]
[Rules and Regulations]               
[Page 70114-70122]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17no10-12]                         

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD 9506]
RIN 1545-BJ91

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AB42

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Consumer Information and Insurance Oversight

45 CFR Part 147

RIN 0950-AA17
[OCIIO-9991-IFC2]

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

AGENCY: Internal Revenue Service, Department of the Treasury; Employee 
Benefits Security Administration, Department of Labor; Office of 
Consumer Information and Insurance Oversight, Department of Health and 
Human Services.

ACTION: Amendment to interim final rules with request for comments.

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SUMMARY: This document contains an amendment to interim final 
regulations implementing the rules for group health plans and health 
insurance coverage in the group and individual markets under provisions 
of the Patient Protection and Affordable Care Act regarding status as a 
grandfathered health plan; the amendment permits certain changes in 
policies, certificates, or contracts of insurance without loss of 
grandfathered status.

DATES: Effective Date. This amendment to the interim final regulations 
is effective on November 15, 2010.
    Comment Date. Comments are due on or before December 17, 2010.

ADDRESSES: Written comments may be submitted to any of the addresses 
specified below. Any comment that is submitted to any Department will 
be shared with the other 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 may be posted on the 
Internet and can be retrieved by most Internet search engines. Comments 
may be submitted anonymously.
    Department of Labor. Comments to the Department of Labor, 
identified by RIN 1210-AB42, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: E-OHPSCA1251amend.EBSA@dol.gov.
     Mail or Hand Delivery: Office of Health Plan Standards and 
Compliance Assistance, Employee Benefits Security Administration, Room 
N-5653, U.S. Department of Labor, 200 Constitution Avenue NW., 
Washington, DC 20210, Attention: RIN 1210-AB42.
    Comments received by the Department of Labor will be posted without 
change to http://www.regulations.gov and http://www.dol.gov/ebsa, and 
available for public inspection at the Public Disclosure Room, N-1513, 
Employee Benefits Security Administration, 200 Constitution Avenue, 
NW., Washington, DC 20210.
    Department of Health and Human Services. In commenting, please 
refer to file code OCIIO-9991-IFC2. Because of staff and resource 
limitations, we cannot accept comments by facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
     Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the instructions under 
the ``More Search Options'' tab.
     By regular mail. You may mail written comments to the 
following address ONLY: Office of Consumer Information and Insurance 
Oversight, Department of Health and Human Services, Attention: OCIIO-
9991-IFC2, Room 445-G, Hubert H. Humphrey Building, 200 Independence 
Avenue, SW., Washington, DC 20201.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
     By express or overnight mail. You may send written 
comments to the following address only: Office of Consumer Information 
and Insurance Oversight, Department of Health and Human Services, 
Attention: OCIIO-

[[Page 70115]]

9991-IFC2, Room 445-G, Hubert H. Humphrey Building, 200 Independence 
Avenue, SW., Washington, DC 20201.
     By hand or courier. If you prefer, you may deliver (by 
hand or courier) your written comments before the close of the comment 
period to the following address: Office of Consumer Information and 
Insurance Oversight, Department of Health and Human Services, 
Attention: OCIIO-9991-IFC2, Room 445-G, Hubert H. Humphrey Building, 
200 Independence Avenue, SW., Washington, DC 20201.

(Because access to the interior of the Hubert H. Humphrey Building is 
not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the OCIIO drop slots located in the main lobby of the building. A 
stamp-in clock is available for persons wishing to retain a proof of 
filing by stamping in and retaining an extra copy of the comments being 
filed.)
    Comments mailed to the address indicated as appropriate for hand or 
courier delivery may be delayed and received after the comment period.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 
three weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. EST. To schedule an appointment to view public comments, 
phone 1-800-743-3951.
    Internal Revenue Service. Comments to the IRS, identified by REG-
118412-10, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: CC:PA:LPD:PR (REG-118412-10), room 5205, Internal 
Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 
20044.
     Hand or courier delivery: Monday through Friday between 
the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-118412-10), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, 
NW., Washington, DC 20224.
    All submissions to the IRS will be open to public inspection and 
copying in room 1621, 1111 Constitution Avenue, NW., Washington, DC 
from 9 a.m. to 4 p.m.

FOR FURTHER INFORMATION CONTACT: Amy Turner or Beth Baum, Employee 
Benefits Security Administration, Department of Labor, at (202) 693-
8335; Karen Levin, Internal Revenue Service, Department of the 
Treasury, at (202) 622-6080; Lisa Campbell, Office of Consumer 
Information and Insurance Oversight, Department of Health and Human 
Services, at (301) 492-4100.
    Customer Service Information: Individuals interested in obtaining 
information from the Department of Labor concerning employment-based 
health coverage laws may call the EBSA Toll-Free Hotline at 1-866-444-
EBSA (3272) or visit the Department of Labor's Web site (http://
www.dol.gov/ebsa). In addition, information from HHS on private health 
insurance for consumers can be found on the Centers for Medicare & 
Medicaid Services (CMS) Web site (http://www.cms.hhs.gov/
HealthInsReformforConsume/01_Overview.asp) and the Office of Consumer 
Information & Insurance Oversight (OCIIO) Web site (http://www.hhs.gov/
OCIIO).

SUPPLEMENTARY INFORMATION:

I. Background

    The Patient Protection and Affordable Care Act (the Affordable Care 
Act), Public Law 111-148, was enacted on March 23, 2010; the Health 
Care and Education Reconciliation Act (the Reconciliation Act), Public 
Law 111-152, was enacted on March 30, 2010. The Affordable Care Act and 
the Reconciliation Act reorganize, amend, and add to the provisions in 
part A of title XXVII of the Public Health Service Act (PHS Act) 
relating to group health plans and health insurance issuers in the 
group and individual markets. The term ``group health plan'' includes 
both insured and self-insured group health plans.\1\ The Affordable 
Care Act adds section 715(a)(1) to the Employee Retirement Income 
Security Act (ERISA) and section 9815(a)(1) to the Internal Revenue 
Code (the Code) to incorporate the provisions of part A of title XXVII 
of the PHS Act into ERISA and the Code, and make them applicable to 
group health plans, and health insurance issuers providing health 
insurance coverage in connection with group health plans. The PHS Act 
sections incorporated by this reference are sections 2701 through 2728. 
PHS Act sections 2701 through 2719A are substantially new, though they 
incorporate some provisions of prior law. PHS Act sections 2722 through 
2728 are sections of prior law renumbered, with some, mostly minor, 
changes. Section 1251 of the Affordable Care Act, as modified by 
section 10103 of the Affordable Care Act and section 2301 of the 
Reconciliation Act, specifies that certain plans or coverage existing 
as of the date of enactment (that is, grandfathered health plans) are 
subject to only certain provisions.
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    \1\ The term ``group health plan'' is used in title XXVII of the 
PHS Act, part 7 of ERISA, and chapter 100 of the Code, and is 
distinct from the term ``health plan,'' as used in other provisions 
of title I of the Affordable Care Act. The term ``health plan,'' as 
used in those provisions, does not include self-insured group health 
plans.
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    The Departments of Health and Human Services, Labor, and the 
Treasury (the Departments) previously issued interim final regulations 
implementing section 1251 of the Affordable Care Act; these interim 
final regulations were published in the Federal Register on June 17, 
2010 (75 FR 34538). Additionally, on September 20, 2010,\2\ October 8, 
2010,\3\ October 12, 2010,\4\ and October 28, 2010,\5\ the Departments 
issued subregulatory guidance on a number of issues pertaining to the 
implementation of the Affordable Care Act, including several 
clarifications relating to the interim final regulations on 
grandfathered health plans.
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    \2\ The subregulatory guidance took the form of ``frequently 
asked questions'' (FAQs). The September 20, 2010 FAQs are available 
at http://www.dol.gov/ebsa/faqs/faq-aca.html and http://www.hhs.gov/
ociio/regulations/questions.html.
    \3\ The October 8, 2010 FAQs are available at http://
www.dol.gov/ebsa/faqs/faq-aca2.html and http://www.hhs.gov/ociio/
regulations/implementation_faq.html.
    \4\ The October 12, 2010 FAQs are available at http://
www.dol.gov/ebsa/faqs/faq-aca3.html and http://www.hhs.gov/ociio/
regulations/implementation_faq.html.
    \5\ The October 28, 2010 FAQs are available at http://
www.dol.gov/ebsa/faqs/faq-aca4.html and http://www.hhs.gov/ociio/
regulations/implementation_faq.html.
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    Section 1251 of the Affordable Care Act, as modified by section 
10103 of the Affordable Care Act and section 2301 of the Reconciliation 
Act, provides that certain plans or coverage existing as of March 23, 
2010 (the date of enactment of the Affordable Care Act) are subject to 
only certain provisions of the Affordable Care Act. The statute and the 
interim final regulations refer to these plans or health insurance 
coverage as grandfathered health plans. The statute and the interim 
final regulations provide that a group health plan or group or 
individual health insurance coverage is a grandfathered health plan 
with respect to individuals enrolled on March 23, 2010 regardless of 
whether an individual later renews the coverage. The interim final 
regulations specify certain changes to a plan or coverage that would 
cause it to no longer be a grandfathered health plan.
    In addition, the statute and the interim final regulations provide 
that a group health plan that provided coverage on March 23, 2010 
generally is also a grandfathered health plan with

[[Page 70116]]

respect to new employees (whether newly hired or newly enrolled) and 
their families that enroll in the grandfathered health plan after March 
23, 2010. The interim final regulations clarify that, in such cases, 
any health insurance coverage provided under the group health plan in 
which an individual was enrolled on March 23, 2010 is also a 
grandfathered health plan.
    Paragraph (g)(1) of the interim final regulations includes rules 
for determining when changes to the terms of a plan or health insurance 
coverage cause the plan or coverage to cease to be a grandfathered 
health plan. In addition to the changes described in paragraph (g)(1) 
of the interim final regulations that cause a plan to cease to be a 
grandfathered health plan, paragraph (a)(1)(ii) of the interim final 
regulations provides that if an employer or employee organization 
enters into a new policy, certificate, or contract of insurance after 
March 23, 2010, the policy, certificate, or contract of insurance is 
not a grandfathered health plan with respect to individuals in the 
group health plan. For example, under the interim final regulations, if 
a group health plan changes issuers after March 23, 2010, the group 
health plan ceases to be a grandfathered health plan, even if the plan 
otherwise would be a grandfathered health plan under the standards set 
forth in paragraph (g)(1).\6\ In contrast, under the interim final 
regulations, a change in third-party administrator (TPA) by a self-
insured group health plan does not cause the plan to relinquish 
grandfather status, provided that the change of TPA does not result in 
any other change that would cause loss of grandfather status under 
paragraph (g)(1).
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    \6\ In accordance with statutory provisions relating to 
collectively bargained group health plans, the interim final 
regulations include an exception for a group health plan governed by 
a collective bargaining agreement that was in effect on March 23, 
2010. In such a case, the grandfathered group health plan is 
permitted to change issuers, or change from a self-insured plan to 
an insured plan, or make a change described under paragraph (g)(1) 
of the interim final regulations (which would otherwise end 
grandfather status) and remain a grandfathered health plan for the 
remainder of the duration of the collective bargaining agreement.
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II. Overview of Amendment to the Interim Final Regulations

    The Departments have received comments on paragraph (a)(1)(ii) of 
the interim final regulations, which provides that a group health plan 
will relinquish grandfather status if it changes issuers or policies. 
The comments expressed four principal concerns about this provision of 
the regulations. First, commenters raised the concern that this 
provision treats insured group health plans, which cannot change 
issuers or policies without ceasing to be a grandfathered health plan, 
differently from self-insured group health plans, which can change TPAs 
without relinquishing grandfather status, as long as any other plan 
change (such as cost sharing or employer contributions) does not exceed 
the standards of paragraph (g)(1) of the interim final regulations. 
Second, commenters raised questions about circumstances in which a 
group health plan changes its issuer involuntarily (for example, the 
issuer withdraws from the market) yet the plan sponsor wants to 
maintain its grandfather status with a new issuer. Third, commenters 
noted that the provision would unnecessarily restrict the ability of 
issuers to reissue policies to current plan sponsors for administrative 
reasons unrelated to any change in the underlying terms of the health 
insurance coverage (for example, to transition the policy to a 
subsidiary of the original issuer or to consolidate a policy with its 
various riders or amendments) without loss of grandfather status. 
Finally, commenters expressed concern that the provision terminating 
grandfather status upon any change in issuer gives issuers undue and 
unfair leverage in negotiating the price of coverage renewals with the 
sponsors of grandfathered health plans, and that this interferes with 
the health care cost containment that tends to result from price 
competition.
    The interim final regulations issued on June 17, 2010 were based on 
an interpretation of the language in section 1251 of the Affordable 
Care Act providing that grandfather status is based on ``coverage under 
a group health plan or health insurance coverage in which such 
individual was enrolled on the date of the enactment of the Act.'' In 
adopting the interim final regulations, the Departments did not 
consider a new insurance policy issued after March 23, 2010 to be a 
grandfathered health plan (except for the special rule for a group 
health plan maintained pursuant to a collective bargaining agreement) 
because ``coverage'' under the new policy was not in place on that 
date.
    Following review of the comments submitted on this issue and 
further review and consideration of the provisions of section 1251 of 
the Affordable Care Act, the Departments have determined it is 
appropriate to amend the interim final regulations to allow a group 
health plan to change health insurance coverage (that is, to allow a 
group health plan to enter into a new policy, certificate, or contract 
of insurance) without ceasing to be a grandfathered health plan, 
provided that the plan continues to comply fully with the standards set 
forth in paragraph (g)(1). For purposes of section 1251 of the 
Affordable Care Act, the Departments now conclude that it is reasonable 
to construe the statutory term ``group health plan'' to apply the 
grandfather provisions uniformly to both self-insured and insured group 
health plans (and, consequently, to health insurance coverage offered 
in connection with a group health plan). Where insured coverage is 
provided not through a group health plan but instead in the individual 
market, a change in issuer would still be a change in the health 
insurance coverage in which the individual was enrolled on March 23, 
2010, and thus the new individual policy, certificate, or contract of 
insurance would not be a grandfathered health plan.
    This amendment modifies paragraph (a)(1) of the interim final 
regulations, which previously caused a group health plan to cease to be 
a grandfathered health plan if the plan entered into a new policy, 
certificate, or contract of insurance. The modification provides that a 
group health plan does not cease to be grandfathered health plan 
coverage merely because the plan (or its sponsor) enters into a new 
policy, certificate, or contract of insurance after March 23, 2010 \7\ 
(for example, a plan enters into a contract with a new issuer or a new 
policy is issued with an existing issuer). The amendment applies to 
such changes to group health insurance coverage that are effective on 
or after November 15, 2010, the date the amendment to the interim final 
regulations was made available for public inspection; the amendment 
does not apply retroactively to such changes to group health insurance 
coverage that were effective before this date.\8\ For this purpose, the 
date the new coverage becomes effective is the operative date, not the 
date a contract for a new policy, certificate or contract of insurance 
is entered into. Therefore, for example, if a plan enters into an 
agreement with an issuer on September 28, 2010 for a new policy to be 
effective on January 1, 2011, then January 1, 2011 is the date the new 
policy is effective and, therefore, the relevant date for purposes of 
determining the application of the

[[Page 70117]]

amendment to the interim final regulations. If, however, the plan 
entered into an agreement with an issuer on July 1, 2010 for a new 
policy to be effective on September 1, 2010, then the amendment would 
not apply and the plan would cease to be a grandfathered health plan.
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    \7\ Of course, with respect to changes to group health insurance 
coverage on or after March 23, 2010 but before June 14, 2010, the 
Departments' enforcement safe harbor remains in effect for good 
faith efforts to comply with a reasonable interpretation of the 
statute.
    \8\ As noted below, the Departments are inviting comments on 
this amendment to the interim final regulations.
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    Notwithstanding the ability to change health insurance coverage 
pursuant to the modification made by the amendment, if the new policy, 
certificate, or contract of insurance includes changes described in 
paragraph (g)(1) of the interim final regulations, the plan ceases to 
be a grandfathered health plan. In applying this amendment, as with 
other provisions of the interim final regulations, the rules apply 
separately to each benefit package made available under a group health 
plan.
    The amendment also provides that, to maintain status as a 
grandfathered health plan, a group health plan that enters into a new 
policy, certificate, or contract of insurance must provide to the new 
health insurance issuer (and the new health insurance issuer must 
require) documentation of plan terms (including benefits, cost sharing, 
employer contributions, and annual limits) under the prior health 
coverage sufficient to determine whether any change described in 
paragraph (g)(1) is being made. This documentation may include a copy 
of the policy or summary plan description. The amendment also makes 
minor conforming changes to other provisions of the interim final 
regulations.
    Thus, a plan can retain its grandfather status if it changes its 
carrier, so long as it has not made any other changes that would revoke 
its status. This amendment is being issued on an interim final basis to 
notify plans as soon as possible of the change and is effective 
prospectively to minimize disruption to participants and beneficiaries. 
The Departments are continuing to review and evaluate the comments 
received in response to the June 17, 2010 interim final regulations. In 
addition, the Departments invite comments on this amendment to the 
interim final regulations, including the prospective effective date of 
the rule and how that affects plans with different plan years. Final 
regulations on grandfathered health plans will be published in the near 
future.

III. Interim Final Rules and Waiver of Delay of Effective Date

    Section 9833 of the Code, section 734 of ERISA, and section 2792 of 
the PHS Act authorize the Secretaries of the Treasury, Labor, and HHS 
(collectively, the Secretaries) to promulgate any interim final rules 
that they determine are appropriate to carry out the provisions of 
chapter 100 of the Code, part 7 of subtitle B of title I of ERISA, and 
part A of title XXVII of the PHS Act, which include PHS Act sections 
2701 through 2728 and the incorporation of those sections into ERISA 
section 715 and Code section 9815. The rule set forth in this amendment 
governs the applicability of the requirements in these sections and is 
therefore appropriate to carry them out. Therefore, the foregoing 
interim final rule authority applies to this amendment.
    In addition, under Section 553(b) of the Administrative Procedure 
Act (APA) (5 U.S.C. 551 et seq.) a general notice of proposed 
rulemaking is not required when an agency, for good cause, finds that 
notice and public comment thereon are impracticable, unnecessary, or 
contrary to the public interest. Although the provisions of the APA 
that ordinarily require a notice of proposed rulemaking do not apply 
here because of the specific authority granted by section 9833 of the 
Code, section 734 of ERISA, and section 2792 of the PHS Act, even if 
the APA were applicable, the Secretaries have determined that it would 
be impracticable and contrary to the public interest to delay putting 
the provisions of this amendment to the June 17, 2010 interim final 
regulations in place until an additional public notice and comment 
process was completed.
    As noted in the preamble to the June 17, 2010 interim final 
regulations, numerous provisions of the Affordable Care Act are 
applicable for plan years (in the individual market, policy years) 
beginning on or after September 23, 2010, six months after date of 
enactment. Because grandfathered health plans are exempt from many of 
these provisions while group health plans and group and individual 
health insurance coverage that are not grandfathered health plans must 
comply with them, it was critical for plans and issuers to receive 
clear guidance as to whether they were so exempt as soon as possible; 
accordingly, the June 17, 2010 interim final regulations were published 
without prior notice and comment. While the Affordable Care Act 
provisions have become effective with respect to certain plans and 
coverage, the majority of plans and coverage have not yet become 
subject to the Act. It is critical to provide those plans with the 
guidance in these interim final rules immediately. In addition, the 
provisions of this amendment essentially are the product of prior 
notice and comment, as they are a logical outgrowth of the June 17, 
2010 interim final regulations which provided an opportunity for public 
comment, and are being issued in response to public comments received.
    For the foregoing reasons, the Departments have determined that it 
is impracticable and contrary to the public interest to engage in full 
notice and comment rulemaking before putting these regulations into 
effect, and that it is in the public interest to promulgate interim 
final regulations.
    In addition, under Section 553(d) of the APA, regulations are to be 
published at least 30 days before they take effect. Again, under 
section 553(d)(3), this requirement may be waived ``for good cause 
found and published with the rule.'' For the reasons set forth above, 
the Departments have determined that there is good cause for waiver of 
the 30 day delay of effective date requirement in section 553(d).

IV. Economic Impact and Paperwork Burden

A. Overview and Need for Regulatory Action--Department of Labor and 
Department of Health and Human Services

    As stated earlier in this preamble, the Departments of Health and 
Human Services, Labor, and the Treasury (the Departments) previously 
issued interim final regulations implementing section 1251 of the 
Affordable Care Act that were published in the Federal Register on June 
17, 2010 (75 FR 34538). Paragraph (a)(1)(ii) of the interim final 
regulations provides that if a group health plan changes the issuer 
providing the insured health coverage after March 23, 2010, the group 
health plan ceases to be a grandfathered health plan. Paragraph (g)(1) 
of the interim final regulations includes rules for determining when 
changes to the terms of a plan or health insurance coverage cause a 
plan or coverage to cease to be a grandfathered health plan.
    As described earlier in this preamble, comments expressed a number 
of concerns regarding the change in issuer rule. Among other concerns, 
comments stated that the change in issuer rule provides issuers with 
undue leverage in negotiating the price of coverage renewals with 
grandfathered health plans, because a change in carrier would result in 
plans relinquishing their grandfathered status. Therefore, in effect, 
the provision could impede employers' efforts to obtain group health 
insurance coverage for their employees at the lowest cost. Commenters 
also expressed concern that the rule creates an unlevel playing field 
for self-insured

[[Page 70118]]

and fully-insured group health plans, because the former could change 
plan administrators without relinquishing their grandfathered health 
plan status, while the latter could not change issuers without 
relinquishing such status.
    After reviewing the comments concerning this issue and further 
analyzing the statutory provision, the Departments have determined that 
it is appropriate to amend the interim final regulations to allow group 
health plans to change a health insurance policy or issuer providing 
health insurance coverage without ceasing to be a grandfathered health 
plan, provided that the standards set forth under paragraph (g)(1) of 
the interim final regulations are met. The Departments expect that this 
amendment will result in a small increase in the number of plans 
retaining their grandfathered status relative to the estimates made in 
the interim final regulations. The Departments did not produce a range 
of estimates for the number of affected entities given considerable 
uncertainty about the behavioral response to this amendment. For a 
further discussion, see Section II. Overview of Amendment to the 
Interim Final Regulations, above.

B. Executive Order 12866--Department of Labor and Department of Health 
and Human Services

    Under Executive Order 12866 (58 FR 51735), ``significant'' 
regulatory actions are subject to review by the Office of Management 
and Budget (OMB). Section 3(f) of the Executive Order defines a 
``significant regulatory action'' as an action that is likely to result 
in a rule (1) having an annual effect on the economy of $100 million or 
more in any one year, or adversely and materially affecting a sector of 
the economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local or tribal governments or communities 
(also referred to as ``economically significant''); (2) creating a 
serious inconsistency or otherwise interfering with an action taken or 
planned by another agency; (3) materially altering the budgetary 
impacts of entitlement grants, user fees, or loan programs or the 
rights and obligations of recipients thereof; or (4) raising novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order. OMB has 
determined that this amendment to the interim final regulations is 
significant within the meaning of section 3(f)(4) of the Executive 
Order. Accordingly, OMB has reviewed the amendment pursuant to the 
Executive Order.

C. Regulatory Flexibility Act--Department of Labor and Department of 
Health and Human Services

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to Federal rules that are subject to 
the notice and comment requirements of section 553(b) of the APA (5 
U.S.C. 551 et seq.) and that are likely to have a significant economic 
impact on a substantial number of small entities. Under Section 553(b) 
of the APA, a general notice of proposed rulemaking is not required 
when an agency, for good cause, finds that notice and public comment 
thereon are impracticable, unnecessary, or contrary to the public 
interest. The interim final regulations were exempt from the APA, 
because the Departments made a good cause finding that a general notice 
of proposed rulemaking is not necessary earlier in this preamble. 
Therefore, the RFA did not apply and the Departments were not required 
to either certify that the regulations or this amendment would not have 
a significant economic impact on a substantial number of small entities 
or conduct a regulatory flexibility analysis.
    Nevertheless, the Departments carefully considered the likely 
impact of the amendment on small entities and believe that the 
amendment will have a positive impact on small plans, because such 
plans are more likely to be fully-insured. The Departments estimated in 
the regulatory impact analysis for the interim final regulations that 
small plans were more likely to relinquish grandfathered health plan 
status due to changes in issuers or policies than large plans. 
Therefore, this amendment to the interim final regulations will benefit 
small plans that want to retain their grandfathered health plan status 
while still changing health insurance issuers. This change should give 
employers greater flexibility to keep premiums affordable for the same 
plan.

D. Special Analyses--Department of the Treasury

    Notwithstanding the determinations of the Department of Labor and 
Department of Health and Human Services, for purposes of the Department 
of the Treasury, it has been determined that this Treasury decision is 
not a significant regulatory action for purposes of 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 these regulations. For the 
applicability of the RFA, refer to the Special Analyses section in the 
preamble to the cross-referencing notice of proposed rulemaking 
published elsewhere in this issue of the Federal Register. Pursuant to 
section 7805(f) of the Code, these temporary regulations have been 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on their impact on small businesses.

E. Paperwork Reduction Act

    As part of their continuing efforts to reduce paperwork and 
respondent burden, the Departments conduct a preclearance consultation 
program to provide the general public and Federal agencies with an 
opportunity to comment on proposed and continuing collections of 
information in accordance with the Paperwork Reduction Act of 1995 
(PRA) (44 U.S.C. 3506(c)(2)(A)). This helps to ensure that requested 
data can be provided in the desired format, reporting burden (time and 
financial resources) is minimized, and collection requirements on 
respondents can be properly assessed.
    As discussed earlier in this preamble, the amendment to the interim 
final regulation adds a new disclosure requirement that requires the 
group health plan that is changing health insurance coverage to provide 
to the succeeding health insurance issuer (and the succeeding health 
insurance issuer must require) documentation of plan terms (including 
benefits, cost sharing, employer contributions, and annual limits) 
under the prior health insurance coverage sufficient to make a 
determination whether the standards of paragraph (g)(1) are exceeded. 
The Departments expect that this amendment will result in a small 
increase in the number of plans retaining their grandfathered status 
relative to the estimates made in the interim final regulations. 
Although the Departments did not produce a range of estimates for the 
number of affected entities due to the considerable uncertainty 
regarding the behavioral response to this amendment, the Departments 
estimate that the new disclosure requirement associated with the 
amendment will result in a total hour burden of 3,845 hours and a total 
cost burden of $260,000.\9\ The Departments welcome comments on this 
estimate.
---------------------------------------------------------------------------

    \9\ The Departments applied the same methodology that was used 
in estimating the hour and cost burden associated with the 
information collection requests (ICRs) contained in the interim 
final regulations to make this estimate.
---------------------------------------------------------------------------

    The Office of Management and Budget has approved revisions to the 
ICRs contained under OMB Control Numbers

[[Page 70119]]

1210-0140 (Department of Labor), 1545-2178 (Department of the Treasury; 
Internal Revenue Service), and 0938-1093 (Department of Health and 
Human Services) reflecting this estimate. A copy of the ICR may be 
obtained by contacting the PRA addressee: G. Christopher Cosby, Office 
of Policy and Research, U.S. Department of Labor, Employee Benefits 
Security Administration, 200 Constitution Avenue, NW., Room N-5718, 
Washington, DC 20210. Telephone: (202) 693-8410; Fax: (202) 219-2745. 
These are not toll-free numbers. E-mail: ebsa.opr@dol.gov. ICRs 
submitted to OMB also are available at reginfo.gov (http://
www.reginfo.gov/public/do/PRAMain).

F. Congressional Review Act

    This amendment to the interim final regulations is subject to the 
Congressional Review Act provisions of the Small Business Regulatory 
Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.) and has been 
transmitted to Congress and the Comptroller General for review. The 
interim final rule is not a ``major rule'' as that term is defined in 5 
U.S.C. 804, because it does not result in (1) an annual effect on the 
economy of $100 million or more; (2) a major increase in costs or 
prices for consumers, individual industries, or Federal, State, or 
local government agencies, or geographic regions; or (3) significant 
adverse effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and export markets.

G. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires 
agencies to prepare several analytic statements before proposing any 
rules that may result in annual expenditures of $100 million (as 
adjusted for inflation) by State, local and tribal governments or the 
private sector. This amendment to the interim final regulations is not 
subject to the Unfunded Mandates Reform Act, because they are being 
issued as an interim final regulation. However, consistent with the 
policy embodied in the Unfunded Mandates Reform Act, this amendment to 
the interim final regulations has been designed to be the least 
burdensome alternative for State, local and tribal governments, and the 
private sector, while achieving the objectives of the Affordable Care 
Act.

H. Federalism Statement--Department of Labor and Department of Health 
and Human Services

    Executive Order 13132 outlines fundamental principles of 
federalism, and requires the adherence to specific criteria by Federal 
agencies in the process of their formulation and implementation of 
policies that have ``substantial direct effects'' on the States, the 
relationship between the national government and States, or on the 
distribution of power and responsibilities among the various levels of 
government. Federal agencies promulgating regulations that have these 
federalism implications must consult with State and local officials, 
and describe the extent of their consultation and the nature of the 
concerns of State and local officials in the preamble to the 
regulation.
    In the Departments' view, this amendment to the regulation has 
federalism implications, because it has direct effects on the States, 
the relationship between the national government and States, or on the 
distribution of power and responsibilities among various levels of 
government. However, in the Departments' view, the federalism 
implications of the regulation is substantially mitigated because, with 
respect to health insurance issuers, the Departments expect that the 
majority of States will enact laws or take other appropriate action 
resulting in their meeting or exceeding the Federal standard.
    In general, through section 514, ERISA supersedes State laws to the 
extent that they relate to any covered employee benefit plan, and 
preserves State laws that regulate insurance, banking, or securities. 
While ERISA prohibits States from regulating a plan as an insurance or 
investment company or bank, the preemption provisions of ERISA section 
731 and PHS Act section 2724 (implemented in 29 CFR 2590.731(a) and 45 
CFR 146.143(a)) apply so that the HIPAA requirements (including those 
of the Affordable Care Act) are not to be ``construed to supersede any 
provision of State law which establishes, implements, or continues in 
effect any standard or requirement solely relating to health insurance 
issuers in connection with group health insurance coverage except to 
the extent that such standard or requirement prevents the application 
of a requirement'' of a Federal standard. The conference report 
accompanying HIPAA indicates that this is intended to be the 
``narrowest'' preemption of State laws. (See House Conf. Rep. No. 104-
736, at 205, reprinted in 1996 U.S. Code Cong. & Admin. News 2018.) 
States may continue to apply State law requirements except to the 
extent that such requirements prevent the application of the Affordable 
Care Act requirements that are the subject of this rulemaking. State 
insurance laws that are more stringent than the Federal requirements 
are unlikely to ``prevent the application of'' the Affordable Care Act, 
and be preempted. Accordingly, States have significant latitude to 
impose requirements on health insurance issuers that are more 
restrictive than the Federal law.
    In compliance with the requirement of Executive Order 13132 that 
agencies examine closely any policies that may have federalism 
implications or limit the policy making discretion of the States, the 
Departments have engaged in efforts to consult with and work 
cooperatively with affected State and local officials, including 
attending conferences of the National Association of Insurance 
Commissioners and consulting with State insurance officials on an 
individual basis. It is expected that the Departments will act in a 
similar fashion in enforcing the Affordable Care Act requirements. 
Throughout the process of developing this amendment, to the extent 
feasible within the specific preemption provisions of HIPAA as it 
applies to the Affordable Care Act, the Departments have attempted to 
balance the States' interests in regulating health insurance issuers, 
and Congress' intent to provide uniform minimum protections to 
consumers in every State. By doing so, it is the Departments' view that 
they have complied with the requirements of Executive Order 13132.
    Pursuant to the requirements set forth in section 8(a) of Executive 
Order 13132, and by the signatures affixed to these regulations, the 
Departments certify that the Employee Benefits Security Administration 
and the Office of Consumer Information and Insurance Oversight have 
complied with the requirements of Executive Order 13132 for the 
attached amendment to the interim final regulations in a meaningful and 
timely manner.

V. Statutory Authority

    The Department of the Treasury temporary regulations are adopted 
pursuant to the authority contained in sections 7805 and 9833 of the 
Code.
    The Department of Labor interim final regulations are adopted 
pursuant to the authority contained in 29 U.S.C. 1027, 1059, 1135, 
1161-1168, 1169, 1181-1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a, 
1191b, and 1191c; sec.

[[Page 70120]]

101(g), Pub. L. 104-191, 110 Stat. 1936; sec. 401(b), Pub. L. 105-200, 
112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L. 110-343, 122 
Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-148, 124 Stat. 
119, as amended by Public Law 111-152, 124 Stat. 1029; Secretary of 
Labor's Order 6-2009, 74 FR 21524 (May 7, 2009).
    The Department of Health and Human Services interim final 
regulations are adopted pursuant to the authority contained in sections 
2701 through 2763, 2791, and 2792 of the PHS Act (42 U.S.C. 300gg 
through 300gg-63, 300gg-91, and 300gg-92), as amended.

List of Subjects

26 CFR Part 54

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

29 CFR Part 2590

    Continuation coverage, Disclosure, Employee benefit plans, Group 
health plans, Health care, Health insurance, Medical child support, 
Reporting and recordkeeping requirements.

45 CFR Part 147

    Health care, Health insurance, Reporting and recordkeeping 
requirements, and State regulation of health insurance.


    Approved: November 8, 2010.
Steven T. Miller,
Deputy Commissioner for Services and Enforcement, Internal Revenue 
Service.
Michael F. Mundaca,
Assistant Secretary of the Treasury (Tax Policy).

    Signed this 5th day of November 2010.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.

    Approved: November 9, 2010.
Jay Angoff,
Director, Office of Consumer Information and Insurance Oversight.

    Approved: November 9, 2010.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.

Department of the Treasury

Internal Revenue Service

26 CFR Chapter I

0
Accordingly, 26 CFR part 54 is amended as follows:

PART 54--PENSION EXCISE TAXES

0
Paragraph 1. The authority citation for part 54 continues to read in 
part as follows:

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


0
Par. 2. Section 54.9815-1251T is amended by:
0
1. Revising paragraph (a)(1).
0
2. Redesignating paragraphs (a)(3) introductory text, (a)(3)(i), and 
(a)(3)(ii) as paragraphs (a)(3)(i), (a)(3)(i)(A) and (a)(3)(i)(B), 
respectively.
0
3. Adding new paragraph (a)(3)(ii).
0
4. Removing paragraphs (a)(5) and (f)(2).
0
5. Redesignating paragraph (f)(1) as paragraph (f).
0
6. Revising the last sentence in newly-designated paragraph (f).
0
7. Revising paragraph (g)(4) Example 9.
    The revisions and addition reads as follows:


Sec.  54.9815-1251T  Preservation of right to maintain existing 
coverage (temporary).

    (a) Definition of grandfathered health plan coverage--(1) In 
general--(i) Grandfathered health plan coverage. Grandfathered health 
plan coverage means coverage provided by a group health plan, or a 
health insurance issuer, in which an individual was enrolled on March 
23, 2010 (for as long as it maintains that status under the rules of 
this section). A group health plan or group health insurance coverage 
does not cease to be grandfathered health plan coverage merely because 
one or more (or even all) individuals enrolled on March 23, 2010 cease 
to be covered, provided that the plan has continuously covered someone 
since March 23, 2010 (not necessarily the same person, but at all times 
at least one person). In addition, subject to the limitation set forth 
in paragraph (a)(1)(ii) of this section, a group health plan (and any 
health insurance coverage offered in connection with the group health 
plan) does not cease to be a grandfathered health plan merely because 
the plan (or its sponsor) enters into a new policy, certificate, or 
contract of insurance after March 23, 2010 (for example, a plan enters 
into a contract with a new issuer or a new policy is issued with an 
existing issuer). For purposes of this section, a plan or health 
insurance coverage that provides grandfathered health plan coverage is 
referred to as a grandfathered health plan. The rules of this section 
apply separately to each benefit package made available under a group 
health plan or health insurance coverage.
    (ii) Changes in group health insurance coverage. Subject to 
paragraphs (f) and (g)(2) of this section, if a group health plan 
(including a group health plan that was self-insured on March 23, 2010) 
or its sponsor enters into a new policy, certificate, or contract of 
insurance after March 23, 2010 that is effective before November 15, 
2010, then the plan ceases to be a grandfathered health plan.
* * * * *
    (3)(i) * * *
    (ii) Change in group health insurance coverage. To maintain status 
as a grandfathered health plan, a group health plan that enters into a 
new policy, certificate, or contract of insurance must provide to the 
new health insurance issuer (and the new health insurance issuer must 
require) documentation of plan terms (including benefits, cost sharing, 
employer contributions, and annual limits) under the prior health 
coverage sufficient to determine whether a change causing a cessation 
of grandfathered health plan status under paragraph (g)(1) of this 
section has occurred.
* * * * *
    (f) * * * After the date on which the last of the collective 
bargaining agreements relating to the coverage that was in effect on 
March 23, 2010 terminates, the determination of whether health 
insurance coverage maintained pursuant to a collective bargaining 
agreement is grandfathered health plan coverage is made under the rules 
of this section other than this paragraph (f) (comparing the terms of 
the health insurance coverage after the date the last collective 
bargaining agreement terminates with the terms of the health insurance 
coverage that were in effect on March 23, 2010).
    (g) * * *
    (4) * * *
    Example 9. (i) Facts. A group health plan not maintained 
pursuant to a collective bargaining agreement offers three benefit 
packages on March 23, 2010. Option F is a self-insured option. 
Options G and H are insured options. Beginning July 1, 2013, the 
plan increases coinsurance under Option H from 10% to 15%.
    (ii) Conclusion. In this Example 9, the coverage under Option H 
is not grandfathered health plan coverage as of July 1, 2013, 
consistent with the rule in paragraph (g)(1)(ii) of this section. 
Whether the coverage under Options F and G is grandfathered health 
plan coverage is determined separately under the rules of this 
paragraph (g).

Department of Labor

Employee Benefits Security Administration

29 CFR Chapter XXV

0
29 CFR part 2590 is amended as follows:

[[Page 70121]]

PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS

0
1. The authority citation for part 2590 continues to read as follows:

    Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a, 1191b, and 1191c; 
sec. 101(g), Pub. L.104-191, 110 Stat. 1936; sec. 401(b), Pub. L. 
105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L. 
110-343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-
148, 124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029; 
Secretary of Labor's Order 6-2009, 74 FR 21524 (May 7, 2009).


0
2. Section 2590.715-1251 is amended by:
0
1. Revising paragraph (a)(1).
0
2. Redesignating paragraphs (a)(3), (a)(3)(i) and (a)(3)(ii) as 
paragraphs (a)(3)(i), (a)(3)(i)(A) and (a)(3)(i)(B), respectively.
0
3. Adding new paragraph (a)(3)(ii).
0
4. Removing paragraphs (a)(5) and (f)(2).
0
5. Redesignating paragraph (f)(1) as paragraph (f).
0
6. Revising the last sentence in newly-designated paragraph (f).
0
7. Revising paragraph (g)(4) Example 9.
    The revisions and addition reads as follows:


Sec.  2590.715-1251  Preservation of right to maintain existing 
coverage.

    (a) Definition of grandfathered health plan coverage--(1) In 
general--(i) Grandfathered health plan coverage. Grandfathered health 
plan coverage means coverage provided by a group health plan, or a 
health insurance issuer, in which an individual was enrolled on March 
23, 2010 (for as long as it maintains that status under the rules of 
this section). A group health plan or group health insurance coverage 
does not cease to be grandfathered health plan coverage merely because 
one or more (or even all) individuals enrolled on March 23, 2010 cease 
to be covered, provided that the plan has continuously covered someone 
since March 23, 2010 (not necessarily the same person, but at all times 
at least one person). In addition, subject to the limitation set forth 
in paragraph (a)(1)(ii) of this section, a group health plan (and any 
health insurance coverage offered in connection with the group health 
plan) does not cease to be a grandfathered health plan merely because 
the plan (or its sponsor) enters into a new policy, certificate, or 
contract of insurance after March 23, 2010 (for example, a plan enters 
into a contract with a new issuer or a new policy is issued with an 
existing issuer). For purposes of this section, a plan or health 
insurance coverage that provides grandfathered health plan coverage is 
referred to as a grandfathered health plan. The rules of this section 
apply separately to each benefit package made available under a group 
health plan or health insurance coverage.
    (ii) Changes in group health insurance coverage. Subject to 
paragraphs (f) and (g)(2) of this section, if a group health plan 
(including a group health plan that was self-insured on March 23, 2010) 
or its sponsor enters into a new policy, certificate, or contract of 
insurance after March 23, 2010 that is effective before November 15, 
2010, then the plan ceases to be a grandfathered health plan.
* * * * *
    (3)(i) * * *
    (ii) Change in group health insurance coverage. To maintain status 
as a grandfathered health plan, a group health plan that enters into a 
new policy, certificate, or contract of insurance must provide to the 
new health insurance issuer (and the new health insurance issuer must 
require) documentation of plan terms (including benefits, cost sharing, 
employer contributions, and annual limits) under the prior health 
coverage sufficient to determine whether a change causing a cessation 
of grandfathered health plan status under paragraph (g)(1) of this 
section has occurred.
* * * * *
    (f) * * * After the date on which the last of the collective 
bargaining agreements relating to the coverage that was in effect on 
March 23, 2010 terminates, the determination of whether health 
insurance coverage maintained pursuant to a collective bargaining 
agreement is grandfathered health plan coverage is made under the rules 
of this section other than this paragraph (f) (comparing the terms of 
the health insurance coverage after the date the last collective 
bargaining agreement terminates with the terms of the health insurance 
coverage that were in effect on March 23, 2010).
    (g) * * *
    (4) * * *
    Example 9.  (i) Facts. A group health plan not maintained 
pursuant to a collective bargaining agreement offers three benefit 
packages on March 23, 2010. Option F is a self-insured option. 
Options G and H are insured options. Beginning July 1, 2013, the 
plan increases coinsurance under Option H from 10% to 15%.
    (ii) Conclusion. In this Example 9, the coverage under Option H 
is not grandfathered health plan coverage as of July 1, 2013, 
consistent with the rule in paragraph (g)(1)(ii) of this section. 
Whether the coverage under Options F and G is grandfathered health 
plan coverage is determined separately under the rules of this 
paragraph (g).

Department of Health and Human Services

45 CFR Chapter I

0
Accordingly, 45 CFR part 147 is amended as follows:

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL HEALTH INSURANCE MARKETS

0
1. The authority citation for part 147 continues to read as follows:

    Authority:  Secs. 2701 through 2763, 2791, and 2792 of the 
Public Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-
91, and 300gg-92), as amended.


0
2. Section 147.140 is amended by:
0
1. Revising paragraph (a)(1).
0
2. Redesignating paragraphs (a)(3), (a)(3)(i) and (a)(3)(ii) as 
paragraphs (a)(3)(i), (a)(3)(i)(A) and (a)(3)(i)(B), respectively.
0
3. Adding new paragraph (a)(3)(ii).
0
4. Removing paragraphs (a)(5) and (f)(2).
0
5. Redesignating paragraph (f)(1) as paragraph (f).
0
6. Revising the last sentence in newly-designated paragraph (f).
0
7. Revising paragraph (g)(4) Example 9.
    The revisions and addition reads as follows:


Sec.  147.140  Preservation of right to maintain existing coverage.

    (a) Definition of grandfathered health plan coverage--(1) In 
general--(i) Grandfathered health plan coverage. Grandfathered health 
plan coverage means coverage provided by a group health plan, or a 
group or individual health insurance issuer, in which an individual was 
enrolled on March 23, 2010 (for as long as it maintains that status 
under the rules of this section). A group health plan or group health 
insurance coverage does not cease to be grandfathered health plan 
coverage merely because one or more (or even all) individuals enrolled 
on March 23, 2010 cease to be covered, provided that the plan has 
continuously covered someone since March 23, 2010 (not necessarily the 
same person, but at all times at least one person). In addition, 
subject to the limitation set forth in paragraph (a)(1)(ii) of this 
section, a group health plan (and any health insurance coverage offered 
in connection with the group health plan) does not cease to be a 
grandfathered health plan merely because the plan (or its sponsor) 
enters into a new policy, certificate, or contract of insurance after 
March 23, 2010 (for

[[Page 70122]]

example, a plan enters into a contract with a new issuer or a new 
policy is issued with an existing issuer). For purposes of this 
section, a plan or health insurance coverage that provides 
grandfathered health plan coverage is referred to as a grandfathered 
health plan. The rules of this section apply separately to each benefit 
package made available under a group health plan or health insurance 
coverage.
    (ii) Changes in group health insurance coverage. Subject to 
paragraphs (f) and (g)(2) of this section, if a group health plan 
(including a group health plan that was self-insured on March 23, 2010) 
or its sponsor enters into a new policy, certificate, or contract of 
insurance after March 23, 2010 that is effective before November 15, 
2010, then the plan ceases to be a grandfathered health plan.
* * * * *
    (3)(i) * * *
    (ii) Change in group health insurance coverage. To maintain status 
as a grandfathered health plan, a group health plan that enters into a 
new policy, certificate, or contract of insurance must provide to the 
new health insurance issuer (and the new health insurance issuer must 
require) documentation of plan terms (including benefits, cost sharing, 
employer contributions, and annual limits) under the prior health 
coverage sufficient to determine whether a change causing a cessation 
of grandfathered health plan status under paragraph (g)(1) of this 
section has occurred.
* * * * *
    (f) * * * After the date on which the last of the collective 
bargaining agreements relating to the coverage that was in effect on 
March 23, 2010 terminates, the determination of whether health 
insurance coverage maintained pursuant to a collective bargaining 
agreement is grandfathered health plan coverage is made under the rules 
of this section other than this paragraph (f) (comparing the terms of 
the health insurance coverage after the date the last collective 
bargaining agreement terminates with the terms of the health insurance 
coverage that were in effect on March 23, 2010).
    (g) * * *
    (4) * * *
    Example 9. (i) Facts. A group health plan not maintained 
pursuant to a collective bargaining agreement offers three benefit 
packages on March 23, 2010. Option F is a self-insured option. 
Options G and H are insured options. Beginning July 1, 2013, the 
plan increases coinsurance under Option H from 10% to 15%.
    (ii) Conclusion. In this Example 9, the coverage under Option H 
is not grandfathered health plan coverage as of July 1, 2013, 
consistent with the rule in paragraph (g)(1)(ii) of this section. 
Whether the coverage under Options F and G is grandfathered health 
plan coverage is determined separately under the rules of this 
paragraph (g).

[FR Doc. 2010-28861 Filed 11-15-10; 4:15 pm]
BILLING CODE 4830-01-4510-29-4120-01-P