ABC Aug.16 expressed concern regarding the interim final rules issued June 17 by the Departments of Health and Human Services, Labor and Treasury, relating to a plan’s status as a “grandfathered health plan” under provisions of the Patient Protection and Affordable Care Act (PPACA).
As part of the Small Business Coalition for Affordable Healthcare, ABC and several other organizations filed comments with the Office of Consumer Information and Insurance Oversight expressing concern that the interim final rules relating to grandfathered health plans are based on a misguided interpretation of the legislative language and purpose of PPACA.
Under PPACA, grandfathered plans are certain group health plans and health insurance coverage which existed on March 23. Grandfathered plans are required to comply with some, but not all, of the health reforms contained in PPACA.
In its comments, the coalition notes that the rules are overly restrictive and could make it even more likely that small businesses will choose to drop their plans prior to 2014 as they are faced with unsustainable premium increases. Instead of lowering the number of uninsured Americans, these rules could actually increase the number of uninsured before the health care law is fully enacted.
The coalition also pointed out that neither PPACA nor the interim final rules address the core problem facing small businesses—the rising costs of health care. Instead, the rule strips small employers of the ability to exercise flexibility in adjusting to cost increases in order to maintain their current plan. The interim final rules should allow for more flexibility to keep more plans in grandfathered status, according to the comments.
Specifically, the coalition expressed concern that the interim final rules:
- Assume that the agencies promulgating the rules have been vested with more authority than they were provided by Congress and PPACA (Sec. 1251);
- Will increase, rather than decrease, costs for small businesses;
- Failed to conduct appropriate research and analysis evaluating the effects that the rules will have on the small group market where about 15 million employees access coverage;
- Give preferential treatment to collectively bargained plans by allowing them to switch plans until their final collective bargaining agreement terminates, but don’t allow small businesses the same flexibility; and
- Will force small employers, their employees and families out of the small group market where an offer of coverage is guaranteed, into either the individual marketplace where insurance can be denied or into a new marketplace (created by PPACA) where they will be exposed to more expensive insurance, a greater set of requirements and more expansive regulations.
For more information about the Interim Final Rule, click here.
To read ABC’s comments, click here.