U.S. Chamber lodges complaints with new rules for grandfathered health plans

New Obama administration rules designed to prevent employers from dropping healthcare coverage for their workers will do just the opposite, the U.S. Chamber of Commerce warned this week.

In 14 pages of public comments filed Monday with the Department of Labor, the Chamber said the strict nature of the guidelines will make it "impossible" for the administration to make good on its promise to allow Americans to keep their current coverage. 

"Plans evolve constantly and if individuals want to keep the coverage that they have (and have had), then individuals will necessarily want their plans to be able to continue to evolve and adapt with the customary changes that plans typically make," Chamber leaders wrote. 

"In defining permitted changes so prescriptively, the Departments’ approach not only goes beyond the intent of the statute, but makes the Administration’s promise impossible both for those offering coverage and those wishing to keep their current coverage."

As a concession to the insurance industry and business community, Democrats exempted existing health insurance plans from a number of the consumer protections contained in the new reform law. For example, grandfathered plans — those up and running when the legislation became law in March — don’t have to offer an insurance product absent a cost-sharing requirement. 

Grandfathered plans are also exempt from new minimum benefit standards, as well as claims denial rules outlined by the new law. The grandfather rules allow plans to make modest adjustments to benefits and cost-sharing, but significant changes are prohibited — at risk of losing the coveted grandfather status. 

Specifically, the Chamber argues:

• Cost-sharing limits are too tight. "By so severely restricting changes in cost-sharing, the regulations will effectively force plans to lose grandfathered status in order to remain solvent (as utilization and costs increase) and innovative (as treatment and technology advance)."

• Plans should not be prohibited from changing policies and issuers. "This creates a situation in which plans must choose between paying increased premiums without shopping for alternative coverage, or losing grandfathered plan status."

• The Department of Labor needs to be more specific about how plans will be told they've lost their grandfathered status. "[The rules] need to delineate details regarding the burden of proof in assessing whether grandfathered status is lost."

• New disclosure requirements are overkill. "Communicating to enrollees that there are other benefits that they could have had, if their employers chose to relinquish their grandfathered plan status, is unnecessary."

America's Health Insurance Plans is voicing similar complaints this August recess.