Comment on FR Doc # 2010-14488

Employer provides a fixed dollar contribution toward certain retiree coverage options (which are part of a larger self-funded plan that also covers active employees). If plan costs rise such that employer has to increase the "premium" that it sets for such coverage, the employer's percentage of the premium will automatically decrease because it contributes a fixed dollar amount per retiree. Similarly, if plan costs descrease, at the end of the year, the employer's contribution percentage toward the overall cost of coerage could actually descrease. The regulations should address this type of fixed contribution, which is common in the retiree coverage context. (Similarly, it is common for employers who offer retiree coverage to use a wrap plan for 5500 filing purposes, such that the retiree coverage would not be considered a retiree only plan.) You might provide that such an option could lose grandfathering if the employer's percentage contribution towards the option descreases by more than 5% as compared to its March 23, 2010 or that this "descreased percentage" rule would not apply to a fixed dollar contribution.