February 2011 Dear Valued Customer: I am writing to provide you ...

www.ibx.com
February 2011
1901 MARKET STREET
PHILADELPHIA, PA 19103-1480
Dear Valued Customer:
I am writing to provide you with additional information about “grandfathering,” one of the
regulations that is part of the new health care reform legislation.
As we shared with you during the renewal process, the health care reform regulations required
certain changes to all plans, while others were optional if the plan met and continues to meet
certain qualifications for grandfathered status. Because you did not make a benefit change when
you renewed your contract with Independence Blue Cross (IBC), we want to remind you of the
requirements of the regulations pertaining to grandfathering and what maintaining a
grandfathered status means for your benefits program.
UNDERSTANDING GRANDFATHERING
Under the health care reform regulations, grandfathered status is available for plans that existed
on March 23, 2010, and that covered one or more individuals on that date. Employers that
comply with grandfathering requirements are exempt from including certain health care reform
requirements, such as covering designated preventive services at 100 percent as part of their
benefit program.
As we told you during the renewal process, certain actions under the regulations would end your
grandfathered status. These actions include but are not limited to an increase of more than five
percent in employee premium contributions for your health benefits program. For example, the
single rate for a benefits program is $100 and the employer subsidized $80 of the premium costs
in 2010 but dropped the subsidy to $74 in 2011. As a result, the employee’s premium
contribution increased by six percent and grandfathered status is lost.
YOUR ACTION IS REQUESTED
While IBC knows that the design of your current benefits program supports grandfathered status,
we do not know whether you have taken (or plan to take) any actions under the law that would
end your grandfathered status.
We need your help to verify your grandfathered status. Depending on whether your plan is
grandfathered or not, we need certain information from you to ensure that your plan is
administered within the parameters of the health care reform regulations.
If your plan is grandfathered: If your plan meets grandfathering requirements, please
complete the enclosed certification form and send it to the address below, fax it to 215-761-0260,
or email it to independencebluecrossfamilyofcompaniesattestation@ibx.com by February 25, 2011.
(over)
Independence Blue Cross offers products directly, through its subsidiaries Keystone Health Plan East and QCC Insurance Company, and with Highmark Blue Shield.
Independent Licensees of the Blue Cross and Blue Shield Association.

Independence Blue Cross
P.O. Box 13516
Philadelphia, PA 19103
We will keep your certification form on file in the event that we receive any questions from the
federal government regarding the grandfathered status of your plan.
If your plan is not grandfathered: If you are no longer entitled to grandfathered status, you
must comply with additional requirements under the health care reform regulations, such as
providing preventive care services at no cost and satisfying nondiscrimination requirements. If
you have made any changes that caused you to lose grandfathered status, please notify your IBC
account executive or broker by February 25, 2011 who will work with you to choose an
alternative IBC product that complies with the health care reform regulations. This is an
important decision. As outlined in the health care reform regulations, if you lose grandfathered
status and do not choose a compliant option, you may be subject to an excise tax of $100 per
person per day imposed by the federal government.
Under the health care reform regulations, we are also required to send the enclosed notification
to members of grandfathered plans informing them that their plans remain grandfathered. Unless
you notify us otherwise by February 25, 2011, we will send this notice to your members during
the week of March 14, 2011.
We are committed to providing you with the products and services you need to enable you to
continue to offer health insurance coverage to your employees. As we are unable to provide you
with legal or tax advice, you may want to consult with your attorney or other financial adviser if
you have any specific questions on whether your plan can maintain grandfathered status. Should
you have any other questions, please contact your broker or IBC account executive.
Sincerely,
John R. Janney
Sr. Vice President, Marketing Services