Internal Revenue Bulletin 2010-35 (PDF rendition): IRS Revenue Procedures

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

Bulletin No. 201
0-35
August 30, 2010
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Proc. 2010–29, page 309.
This procedure provides domestic asset/liability percentages
and domestic investment yields needed by foreign life insur-
ance companies and foreign property and liability insurance
companies to compute their minimum effectively connected
net investment income under section 842(b) of the Code for
taxable years beginning after December 31, 2008.
EMPLOYEE PLANS
T.D. 9493, page 273.
REG–120391–10, page 310.
Final, temporary, and proposed regulations under section 9815
oftheCodeprovideguidanceconcerningtherequirementthat
group health plans and health insurance issuers must provide
coverage for preventive health services without imposing cost-
sharing requirements under the Affordable Care Act.
EXCISE TAX
T.D. 9493, page 273.
REG–120391–10, page 310.
Final, temporary, and proposed regulations under section 9815
oftheCodeprovideguidanceconcerningtherequirementthat
group health plans and health insurance issuers must provide
coverage for preventive health services without imposing cost-
sharing requirements under the Affordable Care Act.
Fi
nding Lists begin on page ii.
Index for July through August begins on page iv.

The IRS Mission
Provide Americ
a’s taxpayers top-quality service by helping
them understa
nd and meet their tax responsibilities and en-
force the law wi
th integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
August 30, 20102010–35 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 9815.
—Additional
Market Reform
s
26 CFR 54.9815–2713T: Coverage of preventive
health services (temporary).
T.D. 9493
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 54
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Part 2590
RIN 1210–AB44
DEPARTMENT OF HEALTH
AND HUMAN SERVICES
OCIIO–9992–IFC
45 CFR Part 147
RIN 0938–AQ07
Interim Final Rules for Group
Health Plans and Health
Insurance Issuers Relating
to Coverage of Preventive
Services under the Patient
Protection and Affordable
Care Act
AGENCIES:Internal Revenue Service,
Department of the Treasury; Employee
Benefits Security Administration, De-
partment of Labor; Office of Consumer
Information and Insurance Oversight, De-
partment of Health and Human Services.
ACTION:Interim final rules with request
for comments.
SUMMA
RY:This document contains in-
terim
final regulations implementing the
rules
for group health plans and health in-
suran
ce coverage in the group and indi-
vidu
al markets under provisions of the Pa-
tien
t Protection and Affordable Care Act
rega
rding preventive health services.
DATES:Effect
ive Date:These interim fi-
nal regulatio
ns are effective on September
17, 2010.
Comment date.
Comments are due on
or before Sept
ember 17, 2010.
Applicabilit
y dates.Theseinterimfi-
nal regulati
ons generally apply to group
health plans
and group health insurance is-
suers for pla
n years beginning on or after
September 23
, 2010. These interim final
regulations
generally apply to individual
health insu
rance issuers for policy years
beginning o
n or after September 23, 2010.
ADDRESSES:
Written comments may be
submitted t
o any of the addresses specified
below. Any c
omment that is submitted to
any Depart
ment will be shared with the
other Depa
rtments. Please do not submit
duplicate
s.
All commen
ts will be made available
to the publ
ic.WARNING: Do not in-
clude any p
ersonally identifiable informa-
tion (such
as name, address, or other con-
tact info
rmation) or confidential business
informat
ion that you do not want publicly
disclose
d. All comments are posted on the
Internet
exactly as received, and can be
retriev
ed by most Internet search engines.
No delet
ions, modifications, or redactions
will be m
ade to the comments received, as
they are
public records. Comments may be
submitt
ed anonymously.
Departm
entofLabor. Comments to the
Departm
ent of Labor, identified by RIN
1210–A
B44, by one of the following meth-
ods:
•Federa
leRulemakingPortal:
http:/
/www.regulations.gov. Follow
the ins
tructions for submitting com-
ments.
•Email:
E-OHPS
CA2713.EBSA@dol.gov.
•Mail or
Hand Delivery:Officeof
Health
Plan Standards and Compliance
Assis
tance, Employee Benefits Secu-
rity A
dministration, Room N–5653,
U.S. D
epartment of Labor, 200 Con-
stitu
tion Avenue NW, Washington, DC
20210
,Attention: RIN 1210–AB44.
Comme
nts received by the Depart-
ment o
f Labor will be posted without
change tohttp
://www.regulations.govand
http://www.d
ol.gov/ebsa, and available for
public inspec
tion at the Public Disclosure
Room, N–1513
, Employee Benefits Se-
curity Admin
istration, 200 Constitution
Avenue, NW, W
ashington, DC 20210.
Department o
f Health and Human Ser-
vices.Incom
menting, please refer to file
code OCIIO–9
992–IFC. Because of staff
and resourc
e limitations, we cannot accept
comments by
facsimile (FAX) transmis-
sion.
You may subm
it comments in one of
four ways (p
lease choose only one of the
ways listed
):
1.Electron
ically. You may submit
electronic
comments on this regulation to
http://ww
w.regulations.gov. Follow the
instructi
ons under the “More Search Op-
tions” tab
.
2.By regul
ar mail.Youmaymail
written co
mments to the following address
ONLY:
Office of Consumer Information and
Insurance Oversight
Department of Health and
Human Services,
Attention: OCIIO–9992–IFC,
P.O. Box 8016,
Baltimore, MD 21244–1850.
Please a
llow sufficient time for mailed
comment
s to be received before the close
of the co
mment period.
3.By exp
ress or overnight mail.You
may send
written comments to the follow-
ing addr
ess ONLY:
Office of Consumer Information and
Insurance Oversight,
Department of Health and
Human Services,
Attention: OCIIO–9992–IFC,
Mail Stop C4–26–05,
7500 Security Boulevard,
Baltimore, MD 21244–1850.
4.By h
and or courier
. If you prefer,
you ma
y deliver (by hand or courier) your
writt
en comments before the close of the
comme
nt period to either of the following
addre
sses:
a. For
delivery in Washington, DC—
2010–35 I.R.B.273August 30, 2010

Office of Consumer Information and
Insurance Oversight,
Department of Health and
Human Services,
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 read-
ily 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 retain-
ing an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD—
Centers for Medicare &
Medicaid Services,
Department of Health and
Human Services,
7500 Security Boulevard,
Baltimore, MD 21244–1850
If you intend to deliver your comments
to the Baltimore address, please call (410)
786–7195 in advance to schedule your ar-
rival with one of our staff members.
Comments mailed to the addresses in-
dicated as appropriate for hand or courier
delivery may be delayed and received after
the comment period.
Submission of comments on paperwork
requirements. You may submit comments
on this document’s paperwork require-
ments by following the instructions at the
end of the “Collection of Information Re-
quirements” section in this document.
Inspection of Public Comments:All
comments received before the close of
the comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments re-
ceived before the close of the comment
period on the following website as soon
as possible after they have been received:
http://www.regulations.gov. Follow the
search instructions on that Web site to
view public comments.
Comments received timely will also
be available for public inspection as they
are received, generally beginning ap-
proximately three weeks after publication
of a document, at the headquarters of
the Centers for Medicare & Medicaid
Services, 7500 Security Boulevard, Balti-
more, Maryland 21244, Monday through
Friday of each week from 8:30 a.m. to
4 p.m. EST. To schedule an appoint-
ment to view public comments, phone
1–800–743–3951.
Internal Revenue Service. Comments
to the IRS, identified by REG–120391–10,
by one of the following methods:
•FederaleRulemakingPortal:
http://www.regulations.gov. Follow
the instructions for submitting com-
ments.
•Mail:CC:PA:LPD:PR
(REG–120391–10), room 5205, Inter-
nal Revenue Service, P.O. Box 7604,
Ben Franklin Station, Washington, DC
20044.
•Hand or courier delivery: Monday
through Friday between the hours of
8a.m.and4p.m.to:CC:PA:LPD:PR
(REG–120391–10), 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 Adminis-
tration, Department of Labor, at (202)
693–8335; Karen Levin, Internal Revenue
Service, Department of the Treasury, at
(202) 622–6080; Jim Mayhew, Office
of Consumer Information and Insurance
Oversight, Department of Health and Hu-
man Services, at (410) 786–1565.
Customer Service Information:In-
dividuals interested in obtaining infor-
mation from the Department of Labor
concerning employment-based health cov-
erage 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 ad-
dition, information from HHS on pri-
vate health insurance for consumers can
be found on the Centers for Medicare
& Medicaid Services (CMS) website
(http://www.cms.hhs.gov/HealthInsRe-
formforConsume/01_Overview.asp)and
information on health reform can be found
athttp://www.healthreform.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The Patient Protection and Affordable
Care Act (the Affordable Care Act), Pub.
L. 111–148, was enacted on March 23,
2010; the Health Care and Education Rec-
onciliation Act (the Reconciliation Act),
Pub. L. 111–152, was enacted on March
30, 2010. The Affordable Care Act and
the Reconciliation Act reorganize, amend,
and add to the provisions of 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 Af-
fordable Care Act adds section 715(a)(1)
to the Employee Retirement Income Secu-
rity 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 cover-
age 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.
Subtitles A and C of title I of the Af-
fordable Care Act amend the requirements
of title XXVII of the PHS Act (changes
to which are incorporated into ERISA
section 715). The preemption provi-
sions of ERISA section 731 and PHS Act
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” does not include self-insured group health plans.
August 30, 20102742010–35 I.R.B.

section 2724
2
(implemented in 29 CFR
2590.731(a) and 45 CFR 146.143(a)) ap-
ply so that the requirements of part 7 of
ERISA and title XXVII of the PHS Act,
as amended by 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 or individual health insur-
ance coverage except to the extent that
such standard or requirement prevents
the application of a requirement” of the
Affordable Care Act.Accordingly, State
laws that impose on health insurance is-
suers requirements that are stricter than
those imposed by the Affordable Care Act
will not be superseded by the Affordable
Care Act.
The Departments of Health and Human
Services, Labor, and the Treasury (the De-
partments) are issuing regulations in sev-
eral phases implementing the revised PHS
Act sections 2701 through 2719A and re-
lated provisions of the Affordable Care
Act. The first phase in this series was the
publication of a Request for Information
relating to the medical loss ratio provisions
of PHS Act section 2718, published in the
Federal Registeron April 14, 2010 (75
FR 19297). The second phase was interim
final regulations implementing PHS Act
section 2714 (requiring dependent cover-
age of children to age 26), published in
theFederal Registeron May 13, 2010
(75 FR 27122). The third phase was in-
terim final regulations implementing sec-
tion 1251 of the Affordable Care Act (re-
lating to status as a grandfathered health
plan), published in theFederal Register
on June 17, 2010 (T.D. 9489, 2010–29
I.R.B. 55 [75 FR 34538]). The fourth
phase was interim final regulations im-
plementing PHS Act sections 2704 (pro-
hibiting preexisting condition exclusions),
2711 (regarding lifetime and annual dollar
limits on benefits), 2712 (regarding restric-
tions on rescissions), and 2719A (regard-
ing patient protections), published in the
Federal Registeron June 28, 2010 (T.D.
9491, 2010–32 I.R.B. 186 [75 FR 37188]).
These interim final regulations are being
published to implement PHS Act section
2713 (relating to coverage for preventive
services). PHS Act section 2713 is gen-
erally effective for plan years (in the indi-
vidual market, policy years) beginning on
or after September 23, 2010, which is six
months after the March 23, 2010 date of
enactment of the Affordable Care Act. The
implementation of other provisions of PHS
Act sections 2701 through 2719A will be
addressed in future regulations.
II. Overview of the Regulations:
PHS Act Section 2713, Coverage of
Preventive Health Services (26 CFR
54.9815–2713T, 29 CFR 2590.715–2713,
45 CFR 147.130)
Section 2713 of the PHS Act, as added
by the Affordable Care Act, and these
interim final regulations require that a
group health plan and ahealth insurance
issuer offering group or individual health
insurance coverage provide benefits for
and prohibit the imposition of cost-sharing
requirements with respect to:
•Evidence-based items or services that
have in effect a rating of A or B in
the current recommendations of the
United States Preventive Services Task
Force (Task Force) with respect to the
individual involved.
3
•Immunizations for routine use in chil-
dren, adolescents, and adults that have
in effect a recommendation from the
Advisory Committee on Immunization
Practices of the Centers for Disease
Control and Prevention (Advisory
Committee) with respect to the indi-
vidual involved. A recommendation
of the Advisory Committee is consid-
ered to be “in effect” after it has been
adopted by the Director of the Centers
for Disease Control and Prevention. A
recommendation is considered to be
for routine use if it appears on the Im-
munization Schedules of the Centers
for Disease Control and Prevention.
•With respect to infants, children, and
adolescents, evidence-informed pre-
ventive care and screenings provided
for in the comprehensive guidelines
supported by the Health Resources and
Services Administration (HRSA).
•With respect to women, evidence-in-
formed preventive care and screening
provided for in comprehensive guide-
lines supported by HRSA (not other-
wise addressed by the recommenda-
tions of the Task Force). The De-
partment of HHS is developing these
guidelines and expects to issue them no
later than August 1, 2011.
The complete list of recommendations
and guidelines that are required to be
covered under these interim final regula-
tions can be found athttp://www.Health-
Care.gov/center/regulations/preven-
tion.html. Together, the items and services
described in these recommendations and
guidelines are referred to in this preamble
as “recommended preventive services.”
These interim final regulations clar-
ify the cost-sharing requirements when a
recommended preventive service is pro-
vided during an office visit. First, if a
recommended preventive service is billed
separately (or is tracked as individual en-
counter data separately) from an office
visit, then a plan or issuer may impose
cost-sharing requirements with respect to
the office visit. Second, if a recommended
preventive service isnot billed separately
(or is not tracked as individual encounter
data separately) from an office visit and
the primary purpose of the office visit is
the delivery of such an item or service,
then a plan or issuer may not impose
cost-sharing requirements with respect to
the office visit. Finally, if a recommended
preventive service isnot billed separately
(or is not tracked as individual encounter
data separately) from an office visit and
the primary purpose of the office visit is
not the delivery of such an item or ser-
vice, then a plan or issuer may impose
cost-sharing requirements with respect to
theofficevisit. Thereferencetotracking
individual encounter data was included
to provide guidance with respect to plans
and issuers that use capitation or similar
2
Code section 9815 incorporates the preemption provisions of PHS Act section 2724. Prior to the Affordable Care Act, there were no express preemption provisions in chapter 100 of the
Code.
3
Under PHS Act section 2713(a)(5), the Task Force recommendations regarding breast cancer screening, mammography, and prevention issued in or around November of 2009 are not to
be considered current recommendations on this subject for purposes of any law. Thus, the recommendations regarding breast cancer screening, mammography, and prevention issued by the
Task Force prior to those issued in or around November of 2009 (i.e., those issued in 2002) will be considered current until new recommendations in thisarea are issued by the Task Force or
appear in comprehensive guidelines supported by the Health Resources and Services Administration concerning preventive care and screenings for women.
2010–35 I.R.B.275August 30, 2010

payment arrangements that do not bill in-
dividually for items and services.
Examples in these interim final regula-
tions illustrate these provisions. In one ex-
ample, an individual receives a cholesterol
screening test, a recommended preventive
service, during a routine office visit. The
plan or issuer may impose cost-sharing re-
quirements for the office visit because the
recommended preventive service is billed
as a separate charge. A second exam-
ple illustrates that treatment resulting from
a preventive screening can be subject to
cost-sharing requirements if the treatment
is not itself a recommended preventive ser-
vice. In another example, an individual re-
ceives a recommended preventive service
that is not billed as a separate charge. In
this example, the primary purpose for the
office visit is recurring abdominal pain and
not the delivery of a recommended preven-
tive service; therefore the plan or issuer
may impose cost-sharing requirements for
the office visit. In the final example, an in-
dividual receives a recommended preven-
tive service that is not billed as a sepa-
rate charge, and the delivery of that service
is the primary purpose of the office visit.
Therefore, the plan or issuer may not im-
pose cost-sharing requirements for the of-
fice visit.
With respect to a plan or health in-
surance coverage that has a network of
providers, these interim final regulations
make clear that a plan or issuer is not
required to provide coverage for recom-
mended preventive services delivered by
an out-of-network provider. Such a plan
orissuermayalsoimposecost-sharingre-
quirements for recommended preventive
services delivered by an out-of-network
provider.
These interim final regulations provide
that if a recommendation or guideline for a
recommended preventive service does not
specify the frequency, method, treatment,
or setting for the provision of that service,
the plan or issuer can use reasonable med-
ical management techniques to determine
any coverage limitations. The use of rea-
sonable medical management techniques
allows plans and issuers to adapt these rec-
ommendations and guidelines to coverage
of specific items and services where cost
sharing must be waived. Thus, under these
interim final regulations, a plan or issuer
may rely on established techniques and the
relevant evidence base to determine the
frequency, method, treatment, or setting
for which a recommended preventive ser-
vice will be available without cost-sharing
requirements to the extent not specified in
a recommendation or guideline.
The statute and these interim final reg-
ulations clarify that a plan or issuer con-
tinues to have the option to cover preven-
tive services in addition to those required
to be covered by PHS Act section 2713.
For such additional preventive services, a
plan or issuer may impose cost-sharing re-
quirements at its discretion. Moreover, a
plan or issuer may impose cost-sharing re-
quirements for a treatment that is not a
recommended preventive service, even if
the treatment results from a recommended
preventive service.
The statute requires the Departments to
establish an interval of not less than one
year between when recommendations or
guidelines under PHS Act section 2713(a)
4
are issued, and the plan year (in the in-
dividual market, policy year) for which
coverage of the services addressed in such
recommendations or guidelines must be in
effect. These interim final regulations pro-
vide that such coverage must be provided
for plan years (in the individual market,
policy years) beginning on or after the later
of September 23, 2010, or one year after
the date the recommendation or guideline
is issued. Thus, recommendations and
guidelines issued prior to September 23,
2009 must be provided for plan years (in
the individual market, policy years) begin-
ning on or after September 23, 2010. For
the purpose of these interim final regula-
tions, a recommendation or guideline of
the Task Force is considered to be issued
on the last day of the month on which the
Task Force publishes or otherwise releases
the recommendation;a recommendation
or guideline of the Advisory Committee
is considered to be issued on the date on
which it is adopted by the Director of the
Centers for Disease Control and Preven-
tion; and a recommendation or guideline
in the comprehensive guidelines supported
by HRSA is considered to be issued on
the date on which it is accepted by the
Administrator of HRSA or, if applicable,
adopted by the Secretary of HHS. For
recommendations and guidelines adopted
after September 23, 2009, information at
http://www.HealthCare.gov/center/regu-
lations/prevention.htmlwill be updated on
an ongoing basis and will include the date
on which the recommendation or guide-
line was accepted or adopted.
Finally, these interim final regulations
make clear that a plan or issuer is not re-
quired to provide coverage or waive cost-
sharing requirements for any item or ser-
vice that has ceased to be a recommended
preventive service.
5
Other requirements of
Federal or State law may apply in con-
nection with ceasing to provide coverage
or changing cost-sharing requirements for
any such item or service. For example,
PHS Act section 2715(d)(4) requires a plan
or issuer to give 60 days advance notice to
an enrollee before any material modifica-
tion will become effective.
Recommendations or guidelines in ef-
fect as of July 13, 2010 are described in
section V later in this preamble. Any
change to a recommendation or guideline
that has — at any point since September
23, 2009 — been included in the recom-
mended preventive services will be noted
athttp://www.HealthCare.gov/center/reg-
ulations/prevention.html. As described
above, new recommendations and guide-
lines will also be noted at this site and
plans and issuers need not make changes
to coverage and cost-sharing require-
ments based on a new recommendation or
guideline until the first plan year (in the
individual market, policy year) beginning
on or after the date that is one year after the
new recommendation or guideline went
4
Section 2713(b)(1) refers to an interval between “the date on which a recommendation described in subsection (a)(1) or (a)(2) or a guideline under subsection (a)(3) is issued and the plan
year with respect to which the requirement described in subsection (a) is effective with respect to the service described in such recommendation or guideline.” While the first part of this
statement does not mention guidelines under subsection (a)(4), it would make no sense to treat the services covered under (a)(4) any differently thanthose in (a)(1), (a)(2), and (a)(3). First,
the same sentence refers to “the requirement described in subsection (a),” which would include a requirement under (a)(4). Secondly, the guidelinesunder (a)(4) are from the same source as
those under (a)(3), except with respect to women rather than infants, children and adolescents; and other preventive services involving women are addressed in (a)(1), so there is no plausible
policy rationale for treating them differently. Third, without this clarification, it would be unclear when such services would have to be covered. These interim final regulations accordingly
apply the intervals established therein to services under section 2713(a)(4).
5
For example, if a recommendation of the United States Preventive Services Task Force is downgraded from a rating of A or B to a rating of C or D, or if a recommendation or guideline no
longer includes a particular item or service.
August 30, 20102762010–35 I.R.B.

into effect. Therefore, by visiting this site
once per year, plans or issuers will have
straightforward access to all the informa-
tion necessary to determine any additional
items or services that must be covered
without cost-sharing requirements, or to
determine any items or services that are
no longer required to be covered.
The Affordable Care Act gives author-
ity to the Departments to develop guide-
lines for group health plans and health
insurance issuers offering group or indi-
vidual health insurance coverage to uti-
lize value-based insurance designs as part
of their offering of preventive health ser-
vices. Value-based insurance designs in-
clude the provision of information and in-
centives for consumers that promote ac-
cess to and use of higher value providers,
treatments, and services. The Departments
recognize the important role that value-
based insurance design can play in pro-
moting the use of appropriate preventive
services. These interim final regulations,
for example, permit plans and issuers to
implement designs that seek to foster bet-
ter quality and efficiency by allowing cost-
sharing for recommended preventive ser-
vices delivered on an out-of-network basis
while eliminating cost-sharing for recom-
mended preventive health services deliv-
ered on an in-network basis. The Depart-
ments are developing additional guidelines
regarding the utilization of value-based in-
surance designs by group health plans and
health insurance issuers with respect to
preventive benefits. The Departments are
seeking comments related to the develop-
ment of such guidelines for value-based
insurance designs that promote consumer
choice of providers or services that offer
the best value and quality, while ensuring
access to critical, evidence-based preven-
tive services.
The requirements to cover recom-
mended preventive services without any
cost-sharing requirements do not apply to
grandfathered health plans.See26 CFR
54.9815–1251T, 29 CFR 2590.715–1251,
and 45 CFR 147.140 (75 FR 34538, June
17, 2010).
III. Interim Final Regulations and
Request for Comments
Section 9833 of the Code, section 734
of ERISA, and section 2792 of the PHS
Act authorize the Secretaries of the Trea-
sury, Labor, and HHS (collectively, the
Secretaries) to promulgate any interim fi-
nal rules that they determine are appropri-
ate to carry out the provisions of chapter
100 of the Code, part 7 of subtitle B of ti-
tle I of ERISA, and part A of title XXVII of
the PHS Act, which include PHS Act sec-
tions 2701 through 2728 and the incorpo-
ration of those sections into ERISA section
715 and Code section 9815.
In addition, under Section 553(b) of
the Administrative Procedure Act (APA)
(5 U.S.C. 551et seq.) a general notice of
proposed rulemaking is not required when
an agency, for good cause, finds that notice
and public comment thereon are imprac-
ticable, unnecessary, or contrary to the
public interest. The provisions of the APA
that ordinarily require a notice of proposed
rulemaking do not apply here because of
thespecificauthority granted by section
9833 of the Code, section 734 of ERISA,
and section 2792 of the PHS Act. How-
ever, even if the APA were applicable, the
Secretaries have determined that it would
be impracticable and contrary to the pub-
lic interest to delay putting the provisions
in these interim final regulations in place
until a full public notice and comment
process was completed. As noted above,
the preventive health service 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.
Had the Departments published a notice
of proposed rulemaking, provided for a
60-day comment period, and only then
prepared final regulations, which would
be subject to a 60-day delay in effective
date, it is unlikely that it would have been
possible to have final regulations in effect
before late September, when these require-
ments could be in effect for some plans or
policies. Moreover, the requirements in
these interim final regulations require sig-
nificant lead time in order to implement.
These interim final regulations require
plans and issuers to provide coverage
for preventive services listed in certain
recommendations and guidelines without
imposing any cost-sharing requirements.
Preparations presumably would have to be
made to identify thesepreventive services.
With respect to the changes that would be
required to be made under these interim
final regulations, group health plans and
health insurance issuers subject to these
provisions have to be able to take these
changes into account in establishing their
premiums, and in making other changes
to the designs of plan or policy benefits,
and these premiums and plan or policy
changes would have to receive necessary
approvals in advance of the plan or policy
year in question.
Accordingly, in order to allow plans and
health insurance coverage to be designed
and implemented on a timely basis, regu-
lations must be published and available to
the public well in advance of the effective
date of the requirements of the Affordable
Care Act. It is not possible to have a full
notice and comment process and to publish
final regulations in the brief time between
enactment of the Affordable Care Act and
the date regulations are needed.
The Secretaries further find that is-
suance of proposed regulations would not
be sufficient because the provisions of the
Affordable Care Act protect significant
rights of plan participants and beneficia-
ries and individuals covered by individual
health insurance policies and it is essential
that participants, beneficiaries, insureds,
plan sponsors, and issuers have certainty
about their rights and responsibilities.
Proposed regulations are not binding and
cannot provide the necessary certainty.
By contrast, the interim final regulations
provide the public with an opportunity for
comment, but without delaying the effec-
tive date of the regulations.
For the foregoing reasons, the Depart-
ments have determined that it is imprac-
ticable and contrary to the public interest
to engage in full notice and comment rule-
making before putting these interim final
regulations into effect, and that it is in the
public interest to promulgate interim final
regulations.
IV.EconomicImpact
Under Executive Order 12866 (58 FR
51735), a “significant” regulatory action is
subject to review by the Office of Manage-
ment 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 ef-
fect on the economy of $100 million or
more in any one year, or adversely and ma-
terially affecting a sector of the economy,
productivity, competition, jobs, the envi-
ronment, public health or safety, or State,
2010–35 I.R.B.277August 30, 2010

local or tribal governments or communi-
ties (also referred to as “economically sig-
nificant”); (2) creating a serious inconsis-
tency or otherwise interfering with an ac-
tion taken or planned by another agency;
(3) materially altering the budgetary im-
pacts 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 regulation is
economically significant within the mean-
ing of section 3(f)(1) of the Executive Or-
der, because it is likely to have an annual
effect on the economy of $100 million in
any one year. Accordingly, OMB has re-
viewed these rules pursuant to the Exec-
utive Order. The Departments provide an
assessment of the potential costs, benefits,
and transfers associated with these interim
final regulations, summarized in the fol-
lowing table.
TABLE 1.—Accounting Table (2011-2013)
Benefits
Qualitative: By expanding coverage and eliminating cost sharing for the recommended preventive services, the Departments
expect access and utilization of these servicesto increase. To the extent that individualsincrease their use of these services the
Departments anticipate several benefits: (1) prevention and reduction in transmission of illnesses as a result of immunization and
screening of transmissible diseases; (2) delayed onset, earliertreatment, and reduction in morbidity and mortality as a result
of early detection, screening, and counseling; (3) increased productivity and fewer sick days; and (4) savings from lower
health care costs. Another benefit of these interim final regulations will be to distribute the cost of preventive services more
equitably across the broad insured population.
Costs
Qualitative: New costs to the health care system result when beneficiaries increase their use of preventive services in response to
the changes in coverage and cost-sharing requirements of preventive services. The magnitude ofthis effect on utilization
depends on the price elasticity of demand and the percentage change in prices facing those with reduced cost sharing or newly
gaining coverage.
Transfers
Qualitative: Transfers will occur to the extent that costs that were previously paid out-of-pocket for certain preventive services
will now be covered by group health plans andissuers under these interimfinal regulations. Risk pooling in the group market
will result in sharing expected cost increases across an entire plan or employee group as higher average premiums for all
enrollees. However, not all of those covered will utilize preventive services to an equivalent extent. As a result, these interim final
regulations create a small transfer from those paying premiums in the group market utilizing less than the average volume of
preventive services in their risk pool to those whose utilization is greater than average. To the extent there is risk pooling in the
individual market, a similar transfer will occur.
A.The Need for Federal Regulatory
Action
As discussed later in this preamble,
there is current underutilization of preven-
tive services, which stems from three main
factors. First, due to turnover in the health
insurance market, health insurance issuers
do not currently have incentives to cover
preventive services, whose benefits may
only be realized in the future when an indi-
vidual may no longer be enrolled. Second,
many preventive services generate bene-
fits that do not accrue immediately to the
individual that receives the services, mak-
ing the individual less likely to take-up,
especially in the face of direct, imme-
diate costs. Third, some of the benefits
of preventive services accrue to society
as a whole, and thus do not get factored
into an individual’s decision-making over
whether to obtain such services.
These interim final regulations ad-
dress these market failures through two
avenues. First, they require coverage
of recommended preventive services by
non-grandfathered group health plans and
health insurance issuers in the group and
individual markets, thereby overcom-
ing plans’ lack of incentive to invest in
these services. Second, they eliminate
cost-sharing requirements, thereby remov-
ing a barrier that could otherwise lead
an individual to not obtain such services,
given the long-term and partially external
nature of benefits.
These interim final regulations are nec-
essary in order to provide rules that plan
sponsors and issuers can use to determine
how to provide coverage for certain pre-
ventive health care services without the
imposition of cost sharing in connection
with these services.
B.PHS Act Section 2713, Coverage
of Preventive Health Services (26 CFR
54.9815–2713T, 29 CFR 2590.715–2713,
45 CFR 147.130)
1.Summary
As
discussed earlier in this preamble,
PH
S Act section 2713, as added by the Af-
fo
rdable Care Act, and these interim final
re
gulations require a group health plan and
ah
ealth insurance issuer offering group
o
r individual health insurance coverage to
p
rovide benefits for and prohibit the im-
p
osition of cost-sharing requirements with
r
espect to the following preventive health
s
ervices:
•Evidence-based items or services that
have in effect a rating of A or B in
the current recommendations of the
United States Preventive Services Task
Force (Task Force). While these guide-
lines will change over time, for the
purposes of this impact analysis, the
Departments utilized currently avail-
able guidelines, which include blood
pressure and cholesterol screening,
diabetes screening for hypertensive
August 30, 20102782010–35 I.R.B.

patients, various cancer and sexually
transmitted infection screenings, and
counseling related to aspirin use, to-
bacco cessation, obesity, and other
topics.
•Immunizations for routine use in chil-
dren, adolescents, and adults that have
in effect a recommendation from the
Advisory Committee on Immunization
Practices of the Centers for Disease
Control and Prevention (Advisory
Committee) with respect to the indi-
vidual involved.
•With respect to infants, children, and
adolescents, evidence-informed pre-
ventive care and screenings provided
for in the comprehensive guidelines
supported by the Health Resources and
Services Administration (HRSA).
•With respect to women, evidence-in-
formed preventive care and screening
provided for in comprehensive guide-
lines supported by HRSA (not other-
wise addressed by the recommenda-
tions of the Task Force). The De-
partment of HHS is developing these
guidelines and expects to issue them no
later than August 1, 2011.
2.Preventive Services
For the purposes of this analysis, the
Departments used the relevant recommen-
dations of the Task Force and Advisory
Committee and current HRSA guidelines
as described in section V later in this pre-
amble. In addition to covering immu-
nizations, these lists include such services
as blood pressure and cholesterol screen-
ing, diabetes screening for hypertensive
patients, various cancer and sexually trans-
mitted infection screenings, genetic testing
for the BRCA gene, adolescent depression
screening, lead testing, autism testing, and
oral health screening and counseling re-
lated to aspirin use, tobacco cessation, and
obesity.
3.Estimated Number of Affected Entities
For purposes of the new requirements
in the Affordable Care Act that apply to
group health plans andhealth insurance
issuers in the group and individual mar-
kets, the Departments have defined a large
group health plan as an employer plan with
100 or more workers and a small group
plan as an employer plan with less than
100 workers. The Departments estimated
that there are approximately 72,000 large
and 2.8 million small ERISA-covered
group health plans with an estimated 97.0
million participants in large group plans
and 40.9 million participants in small
group plans.
6
The Departments estimate
that there are 126,000 governmental plans
with 36.1 million participants in large
plans and 2.3 million participants in small
plans.
7
The Departments estimate there
are 16.7 million individuals under age 65
covered by individual health insurance
policies.
8
As described in the Departments’ in-
terim final regulations relating to status
as a grandfathered health plan,
9
the Af-
fordable Care Act preserves the ability
of individuals to retain coverage under a
group health plan or health insurance cov-
erage in which the individual was enrolled
on March 23, 2010 (a grandfathered health
plan). Group health plans, and group and
individual health insurance coverage, that
are grandfathered health plans do not have
to meet the requirements of these interim
final regulations. Therefore, only plans
and issuers offering group and individual
health insurance coverage that are not
grandfathered health plans will be affected
by these interim final regulations.
Plans can choose to relinquish their
grandfather status in order to make certain
otherwise permissible changes to their
plans.
10
The Affordable Care Act pro-
vides plans with the ability to maintain
grandfathered status in order to promote
stability for consumers while allowing
plans and sponsors to make reasonable
adjustments to lower costs and encourage
the efficient use of services. Based on an
analysis of the changes plans have made
over the past few years, the Departments
expect that more plans will choose to make
these changes over time and therefore the
number of grandfathered health plans is
expected to decrease. Correspondingly,
the number of plans and policies affected
by these interim final regulations is likely
to increase over time. In addition, the
number of individuals receiving the ben-
efits of the Affordable Care Act is likely
to increase over time. The Departments’
mid-range estimate is that 18 percent of
large employer plans and 30 percent of
small employer plans would relinquish
grandfather status in 2011, increasing
over time to 45 percent and 66 percent
respectively by 2013, although there is
substantial uncertainty surrounding these
estimates.
11
Using the mid-range assumptions,
the Departments estimate that in 2011,
roughly 31 million people will be enrolled
in group health plans subject to the pre-
vention provisions in these interim final
regulations, growing to approximately 78
million in 2013.
12
The mid-range esti-
mates suggest that approximately 98 mil-
lion individuals will be enrolled in grand-
fathered group health plans in 2013, many
of which already coverpreventive services
(see discussion of the extent of preventive
services coverage in employer-sponsored
plans later in this preamble).
6
All participant counts and the estimates of individual policies are from the U.S. Department of Labor, EBSA calculations using the March 2008 CurrentPopulation Survey Annual Social
and Economic Supplement and the 2008 Medical Expenditure Panel Survey.
7
Estimate is from the 2007 Census of Government.
8
US Census Bureau, Current Population Survey, March 2009.
9
75 FR 34538 (June 17, 2010).
10
See 75 FR 34538 (June 17, 2010).
11
See 75 Fed. Reg. 34538 (June 17, 2010) for a detailed description of the derivation of the estimates for the percentages of grandfathered health plans.In brief, the Departments used
data from the 2008 and 2009 Kaiser Family Foundations/Health Research and Educational Trust survey of employers to estimate the proportion of plans that made changes in cost-sharing
requirements that would have caused them to relinquish grandfather status if those same changes were made in 2011, and then applied a set of assumptions about how employer behavior
might change in response to the incentives createdby the grandfather regulations to estimate the proportion of plans likely to relinquish grandfather status. The estimates of changes in 2012
and2013werecalculatedbyusingthe2011calculationsandassumingthatanidentical percentage of plan sponsors will relinquish grandfather statusineachyear.
12
To estimate the number of individuals covered in grandfathered health plans, the Departments extended the analysis described in 75 Fed. Reg. 34538, and estimated a weighted average
of the number of employees in grandfathered health plans in the large employer and small employer markets separately, weighting by the number of employees in each employer’s plan.
Estimates for the large employer and small employer markets were then combined, using the estimates supplied above that there are 133.1 million covered lives in the large group market, and
43.2 million in the small group market.
2010–35 I.R.B.279August 30, 2010

In the individual market, one study
estimated that 40 percent to 67 percent of
individual policies terminate each year.
Because all newly purchased individual
policies are not grandfathered, the De-
partments expect that a large proportion
of individual policies will not be grand-
fathered, covering up to and perhaps
exceeding 10 million individuals.
13
However, not all of the individuals
potentially affected by these interim fi-
nal regulations will directly benefit given
the prevalence and variation in insurance
coverage today. State laws will affect the
number of entities affected by all or some
provision of these interim final regula-
tions, since plans, policies, and enrollees
in States that already have certain re-
quirements will be affected to different
degrees.
14
For instance, 29 States require
that health insurance issuers cover most
or all recommended immunizations for
children.
15
Of these 29 States, 18 States
require first-dollar coverage of immu-
nizations so that the insurers pay for
immunizations without a deductible and
12 States exempt immunizations from
copayments (e.g.,$5, $10, or $20 per vac-
cine) or coinsurance (e.g.,10 percent or
20 percent of charges). State laws also
require coverage of certain other preven-
tive health services. Every State except
Utah mandates coverage for some type
of breast cancer screening for women.
Twenty-eight States mandate coverage for
some cervical cancer screening and 13
States mandate coverage for osteoporosis
screening.
16
Estimation of the number of entities
immediately affected by some or all pro-
visions of these interim final regulations
is further complicated by the fact that,
although not all States require insurance
coverage for certain preventive services,
many health plans have already chosen
to cover these services. For example,
most health plans cover most childhood
and some adult immunizations contained
in the recommendations from the Ad-
visory Committee. A survey of small,
medium and large employers showed that
78 percent to 80 percent of their point
of service, preferred provider organi-
zation (PPO), and health maintenance
organization (HMO) health plans covered
childhood immunizations and 57 percent
to 66 percent covered influenza vaccines
in 2001.
17
All 61 health plans (HMOs and
PPOs) responding to a 2005 America’s
Health Insurance Plans (AHIP) survey
covered childhood immunizations
18
in
their best-selling products and almost all
health plans (60 out of 61) covered diph-
theria-tetanus-pertussis vaccines and in-
fluenza vaccines for adults.
19
Asurveyof
private and public employer health plans
found that 84 percent covered influenza
vaccines in 2002-2003.
20
Similarly, many health plans already
cover preventive services today, but there
are differences in the coverage of these ser-
vices in the group and individual markets.
According to a 2009 survey of employer
health benefits, over 85 percent of em-
ployer-sponsored health insurance plans
covered preventive services without hav-
ing to meet a deductible.
21
Coverage of
preventive services does vary slightly by
employer size, with large employers being
more likely to cover such services than
small employers.
22
In contrast, coverage
of preventive services is less prevalent and
varies more significantly in the individual
market.
23
For PPOs, only 66.2 percent of
single policies purchased covered adult
physicals, while 94.1 percent covered can-
cer screenings.
24
In summary, the number of affected en-
tities depends on several factors, such as
whether a health plan retains its grandfa-
ther status, the number of new health plans,
whether State benefit requirements for pre-
ventive services apply, and whether plans
or issuers voluntarily offer coverage and/or
no cost sharing for recommended preven-
tive services. In addition, participants,
beneficiaries, and enrollees in such plans
or health insurance coverage will be af-
fected in different ways: some will newly
gain coverage for recommended preven-
tive services, while others will have the
cost sharing that they now pay for such ser-
vices eliminated. As such, there is consid-
erable uncertainty surrounding estimation
of the number of entities affected by these
interim final regulations.
4.Benefits
The Departments anticipate that four
types of benefits will result from these in-
terim final regulations. First, individuals
will experience improved health as a result
of reduced transmission, prevention or de-
layed onset, and earlier treatment of dis-
ease. Second, healthier workers and chil-
dren will be more productive with fewer
missed days of work or school. Third,
some of the recommended preventive ser-
vices will result in savings due to lower
health care costs. Fourth, the cost of pre-
13
Adele M. Kirk. The Individual Insurance Market: A Building Block for Health Care Reform?Health Care Financing Organization Research Synthesis.May 2008.
14
Of note, State insurance requirements do not apply to self-insured group health plans, whose participants and beneficiaries make up 57 percent of covered employees (in firms with 3 or
more employees) in 2009 according to a major annual survey of employers due to ERISA preemption of State insurance laws.See e.g., Kaiser Family Foundation and Health Research and
Education Trust,Employer Health Benefits 2009 Annual Survey(2009).
15
See e.g., American Academy of Pediatrics,State Legislative Report(2009).
16
See Kaiser Family Foundation, www.statehealthfacts.org.
17
See e.g., Mary Ann Bondi et. al., “Employer Coverage of Clinical Preventive Services in the United States,”American Journal of Health Promotion,20(3), pp. 214–222 (2006).
18
The specific immunizations include: DTaP (diphtheria and tetanus toxoids and acellular Pertussis), Hib (Haemophilus influenzatype b), Hepatitis B, inactivated polio, influenza, MMR
(measles, mumps, and rubella), pneumococcal, and varicella vaccine.
19
McPhillips-Tangum C., Rehm B., Hilton O. “Immunization practices and policies: A survey of health insurance plans.”AHIP Coverage.47(1), 32–7 (2006).
20
See e.g., Matthew M. Davis et. al., “Benefits Coverage forAdult Vaccines in Employer-Sponsored Health Plans,” University of Michigan for the CDC National Immunizations Program
(2003).
21
See e.g., Kaiser Family Foundation and Health Research and Education Trust,Employer Health Benefits 2009 Annual Survey (2009)available at http://ehbs.kff.org/pdf/2009/7936.pdf.
22
See e.g.,MaryAnnBondiet. al., “Employer Coverage of Clinical Preventive Services in the United States,”American Journal of Health Promotion,20(3), pp. 214–222 (2006).
23
Seee.g., Matthew M. Davis et. al., “Benefits Coverage for Adult Vaccines in Employer-Sponsored Health Plans,” University of Michigan for the CDC National Immunizations Program
(2003).
24
See Individual Health Insurance 2006-2007: A Comprehensive Survey of Premiums, Availability, and Benefits. Available at http://www.ahipresearch.org/pdfs/Individual_Market_Sur-
vey_December_2007.pdf
August 30, 20102802010–35 I.R.B.

ventive services will be distributed more
equitably.
By expanding coverage and eliminating
cost sharing for recommended preventive
services, these interim final regulations
could be expected to increase access to
and utilization of these services, which are
not used at optimal levels today. Nation-
wide, almost 38 percent of adult residents
over 50 have never had a colorectal can-
cer screening (such as a sigmoidoscopy
or a colonoscopy)
25
andalmost18per-
cent of women over age 18 have not been
screened for cervical cancer in the past
three years.
26
Vaccination rates for child-
hood vaccines are generally high due to
State laws requiring certain vaccinations
for children to enter school, but recom-
mended childhood vaccines that are not
subject to State laws and adult vaccines
have lower vaccination rates (e.g.,the
meningococcal vaccination rate among
teenagers is 42 percent).
27
Studies have
shown that improved coverage of preven-
tive services leads to expanded utilization
of these services,
28
which would lead to
substantial benefits as discussed further
below.
In addition, these interim final regu-
lations limit preventive service coverage
under this provision to services recom-
mended by the Task Force, Advisory Com-
mittee, and HRSA. The preventive ser-
vices given a grade of A or B by the Task
Force have been determined by the Task
Force to have at least fair or good
29
evi-
dence that the preventive service improves
important health outcomes and that bene-
fits outweigh harms in the judgment of an
independent panel of private sector experts
in primary care and prevention.
30
Simi-
larly, the mission of the Advisory Com-
mittee is to provide advice that will lead
to a reduction in the incidence of vac-
cine preventable diseases in the United
States, and an increase in the safe use
of vaccines and related biological prod-
ucts. The comprehensive guidelines for in-
fants, children, and adolescents supported
by HRSA are developed by multidisci-
plinary professionals in the relevant fields
to provide a framework for improving chil-
dren’s health and reducing morbidity and
mortality based on a review of the rele-
vant evidence. The statute and interim
final regulations limit the preventive ser-
vices covered to those recommended by
the Task Force, Advisory Committee, and
HRSA because the benefits of these pre-
ventive services will be higher than others
that may be popular but unproven.
Research suggests significant health
benefits from a number of the preventive
services that would be newly covered with
no cost sharing by plans and issuers under
the statute and these interim final regu-
lations. A recent article inJAMAstated,
“By one account, increasing delivery of
just five clinical preventive services would
avert 100,000 deaths per year.”
31
These
five services are all items and services rec-
ommended by the Task Force, Advisory
Committee, and/or the comprehensive
guidelines supported by HRSA. The Na-
tional Council on Prevention Priorities
(NCPP) estimated that almost 150,000
lives could potentially be saved by in-
creasing the 2005 rate of utilization to 90
percent for eight of the preventive services
recommended by the Task Force or Advi-
sory Committee.
32
Table 2 shows eight of
the services and thenumber of lives po-
tentially saved if utilization of preventive
services were to increase to 90 percent.
25
This differs from the Task Force recommendationthat individuals aged 50–75 receive fecal occult blood testing,sigmoidoscopy, or colonoscopy screening for colorectal cancer.
26
For Behavioral Risk Factor Surveillance System Numberssee e.g.Centers for Disease Control and Prevention (CDC).Behavioral Risk Factor Surveillance System Survey Data.Atlanta,
Georgia: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, (2008)at http://apps.nccd.cdc.gov/BRFSS/page.asp?cat=CC&yr=2008&state=UB#CC.
27
Seehttp://www.cdc.gov/vaccines/stats-surv/imz-coverage.htm#nisfor vaccination rates.
28
See e.g., Jonathan Gruber,The Role of Consumer Copayments for Health Care: Lessons from the RAND Health Insurance Experiment and Beyond, Kaiser Family Foundation (Oct. 2006).
T
his paper examines an experiment in which copays randomly vary across several thousand individuals. The author finds that individuals are sensitiveto prices for health services-i.e.as
c
opays decline, more services are demanded. Seee.g., Sharon Long, “On the Road to Universal Coverage: Impacts of Reform in Massachusetts At One Year,” Health Affairs, Volume 27,
N
umber 4 (June 2008). The author investigated the case of Massachusetts, where coverageof preventive services became a requirement in2007, and foundthat for individuals under 300
percent of the poverty line, doctor visits for preventive care increased by6.1 percentage points in the year after adoption, even after controlling for observable characteristics. Additionally,
the incidence of individuals citing cost as the reason for not receiving preventive screenings declined by 2.8 percentage points from 2006 to 2007. Inthe Massachusetts case, these preventive
care services were not necessarily free; therefore, economists would expecta higher differential under these interim final rules because of the price sensitivity of health care usage.
29
The Task Force defines good and fair evidence as follows. Good: Evidence includes consistent resultsfrom well-designed, well-conducted studies inrepresentative populations that directly
assess effects on health outcomes. Fair: Evidence is sufficient to determine effects on health outcomes, but the strength of the evidence is limited by the number, quality or consistency of the
individual studies, generalizability to routine practice or indirect nature of the evidence on health outcomes. Seehttp://www.ahrq.gov/clinic/uspstf/gradespre.htm#drec.
30
Seehttp://www.ahrq.gov/clinic/uspstf/gradespre.htm#drecfor details of the Task Force grading.
31
Woolf, Steven. A Closer Look at the Economic Argument for Disease Prevention.JAMA2009;301(5):536–538.
32
See National Commission on Prevention Priorities.Preventive Care: A National Profile on Use, Disparities, and Health Benefits.Partnership for Prevention, August 2007. athttp://www.pre-
vent.org/content/view/129/72/#citationsaccessed on 6/22/2010. Lives saved were estimated using models previouslydeveloped to rank clinical preventive services. See Maciosek MV, Edwards
NM,Coffield AB, Flottemesch TJ, Nelson WW, Goodman MJ, Rickey DA, ButaniAB, Solberg LI. Priorities among effective clinical preventive services: methods.AmJPrevMed2006;
31(1):90–96.
2010–35 I.R.B.281August 30, 2010

TABLE 2.—Lives Saved from Increasing Utilization of Selected Preventive Services to 90 percent
Preventive ServicePopulation Group
Percent utilizing preventive
service in 2005
Lives saved annually if
percent utilizing preventive
service increased to 90
percent
Regular aspirin use
Men 40+ and women 50+
40%
45,000
Smoking cessation advice
and help to quitAll adult smokers
28%42,000
Colorectal cancer screening
Adults 50+
48%14,000
Influenza vaccination
Adults 50+
37%12,000
Cervical cancer screening in
the past 3 yearsWomen 18-64
83%620
Cholesterol screening
Men 35+ and women 45+
79%
2,450
Breast cancer screening in
the past two yearsWomen 40+
67%3,700
Chlamydia screening
Women 16-25
40%30,000
Source: National Commission on Prevention Priorities, 2007
Since financial barriers are not the only
reason for sub-optimalutilization rates,
population-wide utilization of preventive
services is unlikely to increase to the 90
percent level assumed in Table 2 as a result
of these interim final regulations. Current
utilization of preventive services among
insured populations varies widely, but the
Departments expect that utilization will
increase among those individuals in plans
affected by the regulation because the pro-
visions eliminate cost sharing and require
coverage for these services.
These interim final regulations are
expected to increase the take-up rate of
preventive services and are likely, over
time, to lead physicians to increase their
use of these services knowing that they
will be covered, and covered with zero
copayment. In the absence of data on
the elasticity of demand for these specific
services, it is difficult to know precisely
how many more patients will use these
services. Evidence from studies compar-
ing the utilization of preventive services
such as blood pressure and cholesterol
screening between insured and uninsured
individuals with relatively high incomes
suggests that coverage increases usage
rates in a wide range between three and
30 percentage points, even among those
likely to be able to afford basic preventive
services out-of-pocket.
33
A reasonable
assumption is that the average increase
in utilization of these services will be
modest, perhaps on the order of 5 to 10
percentage points for some of them. For
services that are generally covered without
cost sharing in the current market, the De-
partments would expect minimal change
in utilization.
Preventive services’ benefits have also
been evaluated individually. Effective
cancer screening, early treatment, and
sustained risk reduction could reduce the
death rate due to cancer by 29 percent.
34
Improved blood sugar control could re-
duce the risk for eye disease, kidney
disease and nerve disease by 40 percent in
people with Type 1 or Type 2 diabetes.
35
Some recommended preventive ser-
vices have both individual and public
health value. Vaccines have reduced or
eliminated serious diseases that, prior to
vaccination, routinely caused serious ill-
nesses or deaths. Maintaining high levels
of immunization in the general population
protects the un-immunized from exposure
to the vaccine-preventable disease, so that
individuals who cannot receive the vaccine
or who do not have a sufficient immune
response to the vaccine to protect against
the disease are indirectly protected.
36
A second type of benefit from these
interim final regulations is improved
workplace productivity and decreased
absenteeism for school children. Numer-
ous studies confirm that ill health com-
promises worker output and that health
prevention efforts can improve worker
productivity. For example, one study
found that 69 million workers reported
missing days due to illness and 55 million
workersreportedatimewhentheywere
unable to concentrate at work because of
their own illness or a family member’s
illness.
37
Together, labor time lost due to
health reasons represents lost economic
output totaling $260 billion per year.
38
Prevention efforts can help prevent these
types of losses. Studies have also shown
33
The Commonwealth Fund. “Insurance Coverage and the Receipt of Preventive Care.” 2005.http://www.commonwealthfund.org/Content/Performance-Snapshots/Financial-and-Structural-
Access-to-Care/Insurance-Coverage-and-Receipt-of-Preventive-Care.aspx.
34
Curry,SusanJ.,Byers,Tim,andHewitt,Maria,eds.2003.Fulfilling the Potential of Cancer Prevention and Early Detection.Washington, DC: National Academies Press.
35
Centers for Disease Control and Prevention. 2010. Diabetes at a Glance . See http://www.cdc.gov/chronicdisease/resources/publications/aag/pdf/2010/diabetes_aag.pdf
36
See Modern Infectious Disease Epidemiology by Johan Giesecke 1994, Chapter 18 The Epidemiology of Vaccination.
37
Health and Productivity Among U.S. Workers, Karen Davis, Ph.D., Sara R. Collins, Ph.D., Michelle M. Doty, Ph.D., Alice Ho, and Alyssa L. Holmgren, TheCommonwealth Fund, August
2005 http://www.commonwealthfund.org/Content/Publications/Issue-Briefs/2005/Aug/Health-and-Productivity-Among-U-S—Workers.aspx.
38
Ibid.
August 30, 20102822010–35 I.R.B.

that reduced cost-sharing for medical ser-
vices results in fewer restricted-activity
days at work,
39
and increased access to
health insurance coverage improves labor
market outcomes by improving worker
health.
40
Thus, the expansion of benefits
and the elimination of cost sharing for
preventive services as provided in these
interim final regulations can be expected
to have substantial productivity benefits in
the labor market.
Illnesses also contribute to increased
absenteeism among school children, which
could be avoided with recommended pre-
ventive services. In 2006, 56 percent of
students missed between one and five days
of school due to illness, 10 percent missed
between six and ten days and five percent
missed11ormoredays.
41
Obesity in par-
ticular contributes to missed school days:
one study from the University of Pennsyl-
vania found that overweight children were
absent on average 20 percent more than
their normal-weight peers.
42
Studies also
show that influenza contributes to school
absenteeism, and vaccination can reduce
missed school days and indirectly improve
community health.
43
These interim final
regulations will ensure that children have
access to preventive services, thus decreas-
ing the number of days missed due to ill-
ness.
44
Similarly, regular pediatric care,
including care by physicians specializing
in pediatrics, can improve child health out-
comes and avert preventable health care
costs. For example, one study of Medic-
aid enrolled children found that when chil-
dren were up to date for their age on their
schedule of well-child visits, they were
less likely to have an avoidable hospital-
ization at a later time.
45
A third type of benefit from some pre-
ventive services is cost savings. Increasing
the provision of preventive services is ex-
pected to reduce the incidence or severity
of illness, and, as a result, reduce expendi-
tures on treatment of illness. For example,
childhood vaccinationshave generally
been found to reduce such expenditures
by more than the cost of the vaccinations
themselves and generate considerable ben-
efits to society. Researchers at the Centers
for Disease Control and Prevention (CDC)
studying the economic impact of DTaP
(diphtheria and tetanus toxoids and acel-
lular Pertussis), Td (tetanus and diphtheria
toxoids), Hib (Haemophilus influenzatype
b), IPV (inactivated poliovirus), MMR
(measles, mumps and rubella), Hepatitis B
and varicella routine childhood vaccines
found that every dollar spent on immuniza-
tionsin2001wasestimatedtosave$5.30
on direct health care costs and $16.50 on
total societal costs of the diseases as they
are prevented or reduced (direct health
care associated with the diseases averted
were $12.1 billion and total societal costs
averted were $33.9 billion).
46
A review of preventive services by the
National Committee on Prevention Prior-
ities found that, in addition to childhood
immunizations, two of the recommended
preventive services — discussing aspirin
use with high-risk adults and tobacco use
screening and brief intervention — are
cost-saving on net.
47
By itself, tobacco
use screening with a brief intervention
was found to save more than $500 per
smoker.
48
Another area where prevention could
achieve savings is obesity prevention and
reduction. Obesity is widely recognized
as an important driver of higher health
care expenditures.
49
The Task Force rec-
ommends children over age six and adults
be screened for obesity and be offered or
referred to counseling to improve weight
status or promote weight loss. Increasing
obesity screening and referrals to counsel-
ing should decrease obesity and its related
costs. If providers are able to proactively
identify and monitor obesity in child pa-
tients, they may reduce the incidence of
adult health conditions that can be expen-
sive to treat, such as diabetes, hyperten-
sion, and adult obesity.
50
One recent study
estimated that a one-percentage-point re-
duction in obesity among twelve-year-olds
39
See e.g., RAND,The Health Insurance Experiment: A Classic RAND Study Speaks to the Current Health Care Reform Debate, Rand Research Brief, Number 9174 (2006), at
http://www.rand.org/pubs/research_briefs/2006/RAND_RB9174.pdfand Janet Currie et. al., “Has Public Health Insurance forOlder Children Reduced Disparities in Access to Care and
Health Outcomes?”,JournalofHealthEconomics, Volume 27, Issue 6, pages 1567–1581 (Dec. 2008). With early childhoodinterventions, there appear to be improved health outcomes in
later childhood. Analogously, health interventions in early adulthood could have benefits for future productivity.
40
In a RAND policy brief, the authors cite results from the RAND Health Insurance Experiment in which cost-sharing is found to correspond with workers having fewer restricted-activity
d
ays-evidence that free care for certain services may be productivity enhancing.See e.g., RAND,The Health Insurance Experiment: A Classic RAND Study Speaks to the Current Health Care
R
eform Debate, Rand Research Brief, Number 9174 (2006),at http://www.rand.org/pubs/research_briefs/2006/RAND_RB9174.pdf.See e.g.Janet Currie et. al., “Has Public Health Insurance
f
or Older Children Reduced Disparities in Access to Care and Health Outcomes?”Journal of Health Economics, Volume 27, Issue 6, pages 1567–1581 (Dec. 2008). With early childhood
interventions, there appears to be improved health outcomes in later childhood. Analogously, health interventions in early adulthood could have benefits for future productivity. Council of
Economic Advisers. “The Economic Case for Health Reform.” (2009).
41
Bloom B, Cohen RA. Summary health statistics for U.S. children: National Health Interview Survey, 2006. Vital Health Stat 2007;10(234). Available athttp://www.cdc.gov/nchs/nhis.htm.
42
University of Pennsylvania 2007:http://www.upenn.edu/pennnews/news/childhood-obesity-indicates-greater-risk-school-absenteeism-university-pennsylvania-study-revea
43
Davis, Mollie M., James C. King, Ginny Cummings, and Laurence S. Madger. “Countywide School-Based Influenza Immunization: Direct and Indirect Impact on Student Absenteeism.”
Pediatrics122.1 (2008).
44
Moonie,Sheniz,DavidA.Sterling,LarryFiggs,andMarioCastro. “Asthma Status and Severity Affects Missed School Days.”Journal of School Health76.1 (2006): 18–24.
45
Bye, “Effectiveness of Compliance with Pediatric PreventativeCare Guidelines Among Medicaid Beneficiaries.”
46
Fangjun Zhou, Jeanne Santoli, Mark L. Messonnier, Hussain R. Yusuf, Abigail Shefer, Susan Y. Chu, Lance Rodewald, Rafael Harpaz. Economic Evaluation of the 7-Vaccine Routine
Childhood Immunization Schedule in the United States.Archives of Pediatric and Adolescent Medicine2005; 159(12): 1136–1144. The estimates of the costs savings are based on current
immunization levels. The incremental impact of increasing immunization rates is likely to be smaller, but still significant and positive.
47
MaciosekMV,CoffieldAB,EdwardsNM,CoffieldAB,FlottemeschTJ,GoodmanMJ, Solberg LI. Priorities among effective clinical preventive services: Results of a Systematic Review
and Analysis.AmJPrevMed2006; 31(1):52–61.
48
Solberg LI, Maciosed, MV, Edwards NM,Khanchandani HS, and Goodman MJ. Repeated tobacco-use screening and intevention in clinical practice: Healthimpact and cost effectiveness.
American Journal of Preventive Medicine. 2006;31(1).
49
Congressional Budget Office. “Technological Change and the Growth of Health Care Spending.” January 2008. Box 1, pdf p. 18.http://www.cbo.gov/ftpdocs/89xx/doc8947/01–31-
TechHealth.pdf.
50
“Working Group Report on Future Research Directions in Childhood Obesity Prevention and Treatment.” National Heart Lung and Blood Institute, National Institute of Health, U.S.
Department of Health and Human Services (2007),available at http://www.nhlbi.nih.gov/meetings/workshops/child-obesity/index.htm.
2010–35 I.R.B.283August 30, 2010

would save $260.4 million in total medical
expenditures.
51
A full quantification of the cost sav-
ings from the extension of coverage of
preventive services in these interim final
regulations is not possible, but to illus-
trate the potential savings, an assessment
of savings from obesity reduction was con-
ducted. According to the CDC, in 2008,
34.2 percent of U.S. adults and 16.9 per-
cent of children were obese (defined as
having a body mass index (BMI) of 30.0
or greater).
52
Obesity is associated with in-
creased risk for coronary heart disease, hy-
pertension, stroke, type 2 diabetes, several
types of cancer, diminished mobility, and
social stigmatization.
53
As a result, obesity
is widely recognized as an important driver
of higher health care expenditures on an in-
dividual
54
and national level.
55
As described below, the Departments’
analysis assumes that the utilization of
preventive services will increase when
they are covered with zero copayment,
and these interim final regulations are
expected to increase utilization of dietary
counseling servicesboth among people
who currently have the service covered
with a copayment and among people for
whom the service is not currently covered
at all.
Data from the 2009 Kaiser Family
Foundation Employer Health Benefits
Survey shows that 73 percent of employ-
ees with employer-sponsored insurance
from a small (< 200 employees) employer
do not currently have coverage for weight
lossprograms,comparedto38percentat
large firms.
56
In the illustrative analysis
below, the share of individuals without
weight loss coverage in the individual
market is assumed to be equal to the share
in the small group market.
The size of the increase in the number of
individuals receiving dietary counseling or
other weight loss services will be limited
by current physicianpractice patterns, in
which relatively few individuals who are
obese receive physician recommendations
for dietary counseling. In one study of pa-
tients at an internal medicine clinic in the
Bronx, NY, approximately 15 percent of
obese patients received a recommendation
for dietary counseling.
57
Similarly, among
overweight and obese patients enrolled in
the Cholesterol Education and Research
Trial, approximately 15 to 20 percent were
referred to nutrition counseling.
58
These interim final regulations are ex-
pected to increase the take-up rate of coun-
seling among patients who are referred to
it, and may, over time, lead physicians to
increase their referral to such counseling,
knowing that it will be covered, and cov-
ered without cost sharing. The effect of
these interim final regulations is expected
to be magnified because of the many other
public and private sector initiatives dedi-
cated to combating the obesity epidemic.
In the absence of data on take-up of
counseling among patients who are re-
ferred by their physicians, it is difficult
to know what fraction of the estimated
15 percent to 20 percent of patients who
are currently referred to counseling fol-
low through on that referral, or how that
fraction will change after coverage of
these services is expanded. A reasonable
assumption is that utilization of dietary
counseling among patients who are obese
might increase by five to 10 percentage
points as a result of these interim final
regulations. If physicians change their
behavior and increase the rate at which
they refer to counseling, the effect might
be substantially larger.
The share of obese individuals with-
out weight loss coverage is estimated to
be 29 percent.
59
It is assumed that obese
individuals have health care costs 39 per-
cent above average, based on a McKinsey
Global Institute analysis.
60
The Task Force
noted that counseling interventions led to
sustained weight loss ranging from four
percent to eight percent of body weight,
although there is substantial heterogeneity
in results across interventions, with many
interventions having little long-term ef-
fect.
61
Assuming midpoint reduction of
six percent of body weight, the BMI for
an individual taking up such an interven-
tion would fall by six percent as well, as
height would remain constant. Based on
the aforementioned McKinsey Global In-
stitute analysis, a six percent reduction in
BMI for an obese individual (from 32 to
around 30, for example) would result in a
reduction in health care costs of approx-
imately five percent. This parameter for
cost reduction is subject to considerable
uncertainty, given the wide range of po-
tential weight loss strategies with varying
degrees of impact on BMI, and their inter-
connectedness with changes in individual
health care costs.
Multiplying the percentage reduction in
health care costs by the total premiums of
obese individuals newly gaining obesity
prevention coverage allows for an illustra-
tive calculation of the total dollar reduction
in premiums, and dividing by total premi-
ums for the affected population allows for
an estimate of the reduction in average pre-
51
Ibid.
52
Centers for Disease Control and Prevention. “Obesity and Overweight.” 2010.http://www.cdc.gov/nchs/fastats/overwt.htm.
53
Agency for Healthcare Research and Quality (AHRQ).“Screening for Obesity in Adults.” December 2003.http://www.ahrq.gov/clinic/3rduspstf/obesity/obesrr.pdf.
54
Thorpe, Kenneth E. “The Future Costs of Obesity: National and State Estimates of the Impact of Obesity on Direct Health Care Expenses.” November 2009;McKinsey Global Institute.
“Sample data suggest that obese adults canincur nearly twice the annual health care costs of normal-weight adults.” 2007.
55
Congressional Budget Office. “Technological Change and the Growth of Health Care Spending.” January 2008. Box 1, pdf p. 18.http://www.cbo.gov/ftpdocs/89xx/doc8947/01–31-
TechHealth.pdf.
56
Kaiser Family Foundation. 2009 Employer Health Benefits Annual Survey. Public Use File provided to CEA; documentation of statistical analysis available upon request. See
http://ehbs.kff.org.
57
Davis NJ, Emerenini A, Wylie-Rosett J. “Obesity management: physician practice patterns and patient preference,”Diabetes Education. 2006 Jul-Aug; 32(4):557–61
58
Molly E. Waring, PhD, Mary B. Roberts, MS, Donna R. Parker, ScD and Charles B.Eaton, MD, MS. “Documentation and Management of Overweight and Obesity inPrimary Care,”The
Journal of the American Board of Family Medicine 22(5): 544–552 (2009).
59
This estimate is constructed using a weighted average obesity rate taking into account the share of the population aged 0 to 19 and 20 to 74 and their respective obesity rates, derived from
Census Bureau and Centers for Disease Control andPrevention data.. U.S. Census Bureau. “Current Population Survey (CPS) Table Creator.” 2010.http://www.census.gov/hhes/www/cp-
stc/cps_table_creator.html. Centers for Disease Control and Prevention. “Obesity and Overweight.” 2010.http://www.cdc.gov/nchs/fastats/overwt.htm.
60
McKinsey Global Institute Analysis provided to CEA.
61
Agency for Healthcare Research and Quality (AHRQ). “Screening for Obesity in Adults.” December 2003. p. 4.http://www.ahrq.gov/clinic/3rduspstf/obesity/obesrr.pdf.
August 30, 20102842010–35 I.R.B.

miums across the entire affected popula-
tion. Doing so results in a potential pri-
vate premium reduction of 0.05 percent to
0.1 percent from lower health care costs
due to a reduction in obesity for enrollees
in non-grandfathered plans. This does not
account for potential savings in Medicaid,
Medicare, or other health programs.
A fourth benefit of these interim fi-
nal regulations will be to distribute the
cost of preventive services more equitably
across the broad insured population. Some
Americans in plans affected by these reg-
ulations currently have no coverage of
certain recommended preventive services,
and pay for them entirely out-of-pocket.
For some individuals who currently have
no coverage of certain recommended
preventive services, these interim final
regulations will result in a large savings
in out-of-pocket payments, and only a
small increase in premiums. Many other
Americans have limited coverage of cer-
tain recommended preventive services,
with large coinsurance or deductibles,
and also make substantial out-of-pocket
payments to obtain preventive services.
Some with limited coverage of preventive
services will also experience large savings
as a result of these interim final regula-
tions. Reductions in out-of-pocket costs
are expected to be largest among people in
age groups in which relatively expensive
preventive servicesare most likely to be
recommended.
5.Costs and Transfers
The changes in how plans and is-
suers cover the recommended preventive
services resulting from these interim fi-
nal regulations will result in changes in
covered benefits and premiums for in-
dividuals in plans and health insurance
coverage subject to these interim final reg-
ulations. New costs to the health system
result when beneficiaries increase their
use of preventive services in response to
the changes in coverage of preventive
services. Cost sharing, including coin-
surance, deductibles, and copayments,
divides the costs of health services be-
tween the insurer and the beneficiaries.
The removal of cost sharing increases the
quantity of services demanded by lowering
the direct cost of the service to consumers.
Therefore, the Departments expect that the
statute and these interim final regulations
will increase utilization of the covered
preventive services. The magnitude of this
effect on utilization depends on the price
elasticity of demand.
Several studies have found that individ-
uals are sensitive to prices for health ser-
vices.
62
Evidence that consumers change
their utilization of preventive services is
available from CDC researchers who stud-
ied out-of-pocket costs of immunizations
for privately insured children up to age 5
in families in Georgia in 2003, to find that
a one percent increase in out-of-pocket
costs for routine immunizations (DTaP,
IPV, MMR, Hib, and Hep B) was asso-
ciated with a 0.07 percent decrease in
utilization.
63
Along with new costs of induced uti-
lization, there are transfers associated with
these interim final regulations. A transfer
is a change in who pays for the services,
where there is not an actual change in the
level of resources used. For example, costs
that were previously paid out-of-pocket for
certain preventive services will now be
covered by plans and issuers under these
interim final regulations. Such a transfer
of costs could be expected to lead to an in-
crease in premiums.
a.Estimate of average changes in health
insurance premiums
The Departments assessed the impact
of eliminating cost sharing, increases in
services covered, and induced utilization
on the average insurance premium using a
model to evaluate private health insurance
plans against a nationally representative
population. The model is based on the
Medical Expenditure Panel Survey data
from 2004, 2005, and 2006 on house-
hold spending on health care, which are
scaled to levels consistent with the CMS
projections of the National Health Expen-
diture Accounts.
64
This data is combined
with data from the Employer Health Ben-
efits Surveys conducted by the Kaiser
Family Foundation and Health Research
and Education Trust to model a “typical
PPO coverage” plan. The model then
allows the user to assess changes in cov-
ered expenses, benefits, premiums, and
induced utilization of services resulting
from changes in the characteristics of the
plan. The analysis of changes in cover-
age is based on the average per-person
covered expenses and insurance benefits.
The average covered expense is the total
charge for covered services; insurance
benefits are the part of the covered ex-
penses covered by the insurer. The effect
on the average premium is then estimated
based on the percentage changes in the
insurance benefits and the distribution
of the individuals across individual and
group markets in non-grandfathered plans.
The Departments assume that the percent
increase for insurance benefits and premi-
ums will be the same. This is based on two
assumptions: (1) that administrative costs
included in the premium will increase pro-
portionally with the increase in insurance
benefits; and (2) that the increases in in-
surance benefits will be directly passed
on to the consumer in the form of higher
premiums. These assumptions bias the es-
timates of premium changes upward. Us-
ing this model, the Departments assessed:
(1) changes in cost-sharing for currently
covered and utilized services, (2) changes
in services covered, and (3) induced uti-
lization of preventive services. There are
several additional sources of uncertainty
concerning these estimates. First, there
is no accurate, granular data on exactly
what baseline coverage is for the particu-
lar preventive services addressed in these
interim final regulations. Second, there is
uncertainty over behavioral assumptions
related to additional utilization that results
from reduced cost-sharing. Therefore,
after providing initial estimates, the De-
partments provide a sensitivity analysis to
capture the potential range of impacts of
these interim final regulations.
From the Departments’ analysis of
the Medical Expenditure Panel Survey
62
See e.g., Jonathan Gruber,The Role of Consumer Copayments for Health Care: Lessons from the RAND Health Insurance Experiment and Beyond, Kaiser Family Foundation (Oct. 2006).
This paper examines an experiment in which copays randomly vary across several thousand individuals. The author finds that individuals are sensitive to prices for health services-i.e.,as
copays decline, more services are demanded.
63
See e.g., Noelle-Angelique Molinariet. al., “Out-of-Pocket Costs of Childhood Immunizations: A Comparison by Type of Insurance Plan,”Pediatrics, 120(5) pp. 148–156 (2006).
64
The National Health Expenditure Accounts (NHEA) are the official estimates of total health care spending in the United States. See http://www.cms.gov/NationalHealthExpendData/02_Na-
tionalHealthAccountsHistorical.asp.
2010–35 I.R.B.285August 30, 2010

(MEPS) data, controlled to be consistent
with projections of the National Health
Expenditure Accounts, the average person
with employer-sponsored insurance (ESI)
has $264 in covered expenses for preven-
tive services, of which $240 is paid by
insurance, and $24 is paid out-of-pocket.
65
When preventive services are covered with
zero copayment, the Departments expect
the average preventive benefit (holding
utilization constant) will increase by $24.
This is a 0.6 percent increase in insurance
benefits and premiums for plans that have
relinquished their grandfather status. A
similar, but larger effect is expected in
the individual market because existing
evidence suggests that individual health
insurance policies generally have less gen-
erous benefits for preventive services than
group health plans. However, the evidence
base for current coverage and cost shar-
ing for preventive services in individual
health insurance policies is weaker than
for group health plans, making estimation
of the increase in average benefits and
premiums in the individual market highly
uncertain.
For analyses of changes in covered
services, the Departments used the Blue
Cross/Blue Shield Standard (BC/BS) plan
offered through the Federal Employees
Health Benefits Program as an average
plan.
66
Other analyses have used the
BC/BS standard option as an average
plan as it was designed to reflect stan-
dard practice within employer-sponsored
health insurance plans.
67
BC/BS covers
most of the preventive services listed in
the Task Force and Advisory Commit-
tee recommendations, and most of the
preventive services listed in the compre-
hensive guidelines for infants, children,
and adolescents supported by HRSA. Not
covered by the BC/BS Standard plan are
the recommendations for genetic testing
for the BRCA gene, adolescent depression
screening,
68
lead testing, autism testing,
and oral health screening.
69
The Departments estimated the increase
in benefits from newly covered services by
estimating the number of new services that
would be provided times the cost of pro-
viding the services, and then spread these
new costs across the total insured popu-
lation. The Departments estimated that
adding coverage for genetic screening and
depression screening would increase insur-
ance benefits an estimated 0.10 percent.
Adding lead testing, autism testing, and
oral health screening would increase in-
surance benefits by an estimated 0.02 per-
cent. This results in a total average in-
crease in insurance benefits on these ser-
vices of 0.12 percent, or just over $4 per
insured person. This increase represents a
mixture of new costs and transfers, depen-
dent on whether beneficiaries previously
would have purchased these services on
their own. It is also important to remem-
ber that actual plan impacts will vary de-
pending on baseline benefit levels, and that
grandfathered healthplans will not experi-
ence any impact from these interim final
regulations. The Departments expect the
increase to be larger in the individual mar-
ket because coverage of preventive ser-
vices in the individual market is less com-
plete than coverage in the group market,
but as noted previously, the evidence base
for the individual market is weaker than
that of the group market, making detailed
estimates of the size of this effect difficult
and highly uncertain.
Actuaries use an “induction formula” to
estimate the behavioral change in response
to changes in the relative levels of cover-
age for health services. For this analysis,
the Departments used the model to esti-
mate the induced demand (the increased
use of preventive services). The model
uses a standard actuarial formula for in-
duction 1/(1+alpha*P), where alpha is the
“induction parameter” and P is the aver-
age fraction of the cost of services paid by
the consumer. The induction parameter for
physician services is 0.7, derived by the
standard actuarial formula that is generally
consistent with the estimates of price elas-
ticity of demand from the RAND Health
Insurance Experiment and other economic
studies.
70
Removing cost sharing for pre-
ventive services lowers the direct cost to
consumers of using preventive services,
which induces additional utilization, esti-
mated with the model above to increase
covered expenses and benefits by approx-
imately $17, or 0.44 percent in insurance
benefits in group health plans. The Depart-
ments expect a similar but larger effect in
the individual market, although these esti-
mates are highly uncertain.
The Departments calculated an estimate
of the average impact using the informa-
tion from the analyses described above,
using estimates of the number of individ-
uals in non-grandfathered health plans in
the group and individual markets in 2011.
The Departments estimate that premiums
will increase by approximately 1.5 percent
on average for enrollees in non-grandfa-
thered plans. This estimate assumes that
any changes in insurance benefits will be
directly passed on to the consumer in the
form of changes in premiums. As men-
tioned earlier, this assumption biases the
estimates of premium change upward.
b.Sensitivity analysis
As discussed previously, there is sub-
stantial uncertainty associated with the es-
timates presented above. To address the
uncertainty in the group market, the De-
partments first varied the estimated change
to underlying benefits, to address the par-
ticular uncertainty behind the estimate of
baseline coverage of preventive services in
the group market. The estimate for the per
person annual increase in insurance ben-
efits from adding coverage for new ser-
65
The model does not distinguish between recommended and non-recommended preventive services, and so this likely represents an overestimate of the insurance benefits for preventive
services.
66
The Blue Cross Blue Shield standard option plan documentation is available online athttp://fepblue.org/benefitplans/standard-option/index.html.
67
Frey A, Mika S, Nuzum R, and Schoen C. “Setting a National Minimum Standard forHealth Benefits: How do State Benefit Mandates Compare with Benefits in Large-Group Plans?”
Issue Brief. Commonwealth Fund June 2009 available at http://www.commonwealthfund.org/Content/Publications/Issue-Briefs/2009/Jun/Setting-a-National-Minimum-Standard-for-Health-
Benefits.aspx.
68
The Task Force recommends that women whose family history is associated with an increased risk for deleterious mutations in BRCA1 or BRCA2 genes be referred for genetic counseling
and evaluation for BRCA testing and screening of adolescents (12–18 years of age) for major depressive disorder (MDD) when systems are in place to ensure accurate diagnosis, psychotherapy
(cognitive-behavioral or interpersonal), and follow-up.
69
Lead, autism, and oral health screening are from the HRSA comprehensive guidelines.
70
Standard formula best described in “Quantity-Price Relationships in Health Insurance”, Charles L Trowbridge, Chief Actuary, Social Security Administration (DHEW Publication No.
(SSA)73–11507, November 1972)..
August 30, 20102862010–35 I.R.B.

vices is approximately $4. The Depart-
ments considered the impact of a smaller
and larger addition in benefits of approxi-
mately $2 and $6 per person. To consider
the impact of uncertainty around the size of
the behavioral change (that is, the utiliza-
tion of more services when cost sharing is
eliminated), the Departments analyzed the
impact on insurance benefits if the behav-
ioral change were 15 percent smaller and
15 percent larger.
In the individual market, to accommo-
date the greater uncertainty relative to the
group market, the Departments considered
the impact of varying the increase in ben-
efits resulting from cost shifting due to the
elimination of cost sharing, in addition to
varying the cost of newly covered services
and behavioral change.
Combining results in the group and
individual markets for enrollees in
non-grandfathered plans, the Depart-
ments’ low-end is a few tenths of a percent
lower than the mid-range estimate of ap-
proximately 1.5 percent, and the high-end
estimate is a few tenths of a percent higher.
Grandfathered health plans are not sub-
ject to these interim final regulations and
therefore would not experience this pre-
mium change.
6.Alternatives considered
Several provisions in these interim final
regulations involved policy choices. One
was whether to allow a plan or issuer to im-
pose cost sharing for an office visit when
a recommended preventive service is pro-
vided in that visit. Sometimes a recom-
mended preventive service is billed sepa-
rately from the office visit; sometimes it is
not. The Departments decided that the cost
sharing prohibition of these interim final
regulations applies to the specific preven-
tive service as recommended by the guide-
lines. Therefore, if the preventive service
is billed separately from the office visit, it
is the preventive service that has cost shar-
ing waived, not the entire office visit.
A second policy choice was if the pre-
ventive service is not billed separately
from the office visit, whether these in-
terim final regulations should prohibit cost
sharing for any office visit in which any
recommended preventive service was ad-
ministered, or whether cost sharing should
be prohibited only when the preventive
service is the primary purpose of the office
visit. Prohibiting cost sharing for office
visits when any recommended preventive
service is provided, regardless of the pri-
mary purpose of the visit, could lead to an
overly broad application of these interim
final regulations; for example, a person
who sees a specialist for a particular con-
dition could end up with a zero copayment
simply because his or her blood pressure
was taken as part of the office visit. This
could create financial incentives for con-
sumers to request preventive services at
office visits that are intended for other
purposes in order to avoid copayments and
deductibles. The increased prevalence of
the application of zero cost sharing would
lead to increased premiums compared with
the chosen option, without a meaningful
additional gain in access to preventive
services.
A third issue involves health plans that
have differential cost sharing for services
provided by providers who are in and out
of their networks. These interim final reg-
ulations provide that a plan or issuer is not
required to provide coverage for recom-
mended preventive services delivered by
an out-of-network provider. The plan or is-
suer may also impose cost sharing for rec-
ommended preventive services delivered
by an out-of-network provider. The De-
partments considered that requiring cover-
age by out-of-network providers at no cost
sharing would result in higher premiums
for these interim final regulations. Plans
and issuers negotiate allowed charges with
in-network providers as a way to promote
effective, efficient health care, and allow-
ing differences in cost sharing in- and out-
of-network enables plans to encourage use
of in-network providers. Allowing zero
cost sharing for out of network providers
could reduce providers’ incentives to par-
ticipate in insurer networks. The Depart-
ments decided that permitting cost shar-
ing for recommended preventive services
provided by out-of-network providers is
the appropriate option to preserve choice
of providers for individuals, while avoid-
ing potentially larger increases in costs and
transfers as well as potentially lower qual-
ity care.
C.Regulatory Flexibility
Act—Department of Labor and
Department of Health and Human
Services
The Regulatory Flexibility Act (5
U.S.C. 601et seq.) (RFA) imposes cer-
tain 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. 551et seq.) and that
are likely to have a significant economic
impact on a substantial number of small
entities. Section 9833 of the Code, section
734 of ERISA, and section 2792 of the
PHS Act authorize the Secretaries to pro-
mulgate 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 or 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 sec-
tions into ERISA section 715 and Code
section 9815.
Moreover, under Section 553(b) of the
APA, a general notice of proposed rule-
making is not required when an agency,
for good cause, finds that notice and pub-
lic comment thereon are impracticable, un-
necessary, or contrary to the public inter-
est. These interim final regulations are ex-
empt from APA, because the Departments
made a good cause finding that a general
notice of proposed rulemaking is not nec-
essary earlier in this preamble. Therefore,
the RFA does not apply and the Depart-
ments are not required to either certify that
the rule would not have a significant eco-
nomic impact on a substantial number of
small entities or conduct a regulatory flex-
ibility analysis.
Nevertheless, the Departments care-
fully considered the likely impact of the
rule on small entities in connection with
their assessment under Executive Order
12866. Consistent with the policy of
the RFA, the Departments encourage the
public to submit comments that suggest
alternative rules that accomplish the stated
purpose of the Affordable Care Act and
minimize the impact on small entities.
D.Special Analyses-Department of the
Treasury
Notwithstanding the determinations of
the Department of Labor and Department
2010–35 I.R.B.287August 30, 2010

of Health and Human Services, for pur-
poses of the Department of the Treasury, it
has been determined that this Treasury de-
cision is not a significant regulatory action
for purposes of Executive Order 12866.
Therefore, a regulatory assessment is not
required. It has alsobeen determined that
section 553(b) of the APA (5 U.S.C. chap-
ter 5) does not apply to these interim fi-
nal 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 Bulletin. Pur-
suant to section 7805(f) of the Code, these
temporary regulations have been submit-
ted to the Chief Counsel for Advocacy
of the Small BusinessAdministration for
comment on their impact on small busi-
nesses.
E.Paperwork Reduction Act: Department
of Labor, Department of the Treasury,
and Department of Health and Human
Services
These interim final regulations are not
subject to the requirements of the Paper-
work Reduction Act of 1980 (44 U.S.C.
3501et seq.) because it does not contain
a “collection of information” as defined in
44 U.S.C. 3502 (11).
F.Congressional Review Act
These interim final regulations are
subject to the Congressional Review Act
provisions of the Small Business Regula-
tory Enforcement Fairness Act of 1996 (5
U.S.C. 801et seq.) and have been trans-
mitted to Congress and the Comptroller
General for review.
G.Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of
1995 (Public Law 104–4) requires agen-
cies 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.
These interim final regulations are not sub-
ject to the Unfunded Mandates Reform Act
because they are being issued as interim fi-
nal regulations. However, consistent with
thepolicyembodiedintheUnfundedMan-
dates Reform Act, these interim final reg-
ulations have been designed to be the least
burdensome alternative for State, local and
tribal governments, and the private sector,
while achieving the objectives of the Af-
fordable Care Act.
HFederalism Statement—Department
of Labor and Department of Health and
Human Services
Executive Order 13132 outlines fun-
damental principles of federalism, and
requires the adherence to specific criteria
by Federal agencies in the process of their
formulation and implementation of poli-
cies 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 consulta-
tion and the nature of the concerns of State
and local officials in the preamble to the
regulation.
In the Departments’ view, these interim
final regulations have federalism impli-
cations, because they have direct effects
on the States, the relationship between
the national government and States, or on
the distribution of power and responsibili-
ties among various levels of government.
However, in the Departments’ view, the
federalism implications of these interim fi-
nal regulations are 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 stan-
dards.
In general, through section 514, ERISA
supersedes State laws to the extent that
they relate to any covered employee ben-
efit plan, and preserves State laws that
regulate insurance, banking, or securities.
While ERISA prohibits States from regu-
lating a plan as an insurance or investment
company or bank, the preemption provi-
sions of section 731 of ERISA and section
2724 of the PHS Act (implemented in 29
CFR 2590.731(a) and 45 CFR 146.143(a))
apply so that the HIPAA requirements (in-
cluding 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 ex-
cept 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 require-
ments on health insurance issuers that are
more restrictive than the Federal law.
In compliance with the requirement of
Executive Order 13132that agencies ex-
amine closely any policies that may have
federalism implications or limit the policy
making discretion of the States, the De-
partments have engaged in efforts to con-
sultwithandworkcooperativelywithaf-
fected State and local officials, including
attending conferencesof the National As-
sociation 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 require-
ments. Throughout the process of devel-
oping these interim final regulations, to the
extent feasible within the specific preemp-
tion provisions of HIPAA as it applies to
the Affordable Care Act, the Departments
have attempted to balance the States’ in-
terests in regulating health insurance is-
suers, and Congress’ intent to provide uni-
form minimum protections to consumers
in every State. By doing so, it is the De-
partments’ 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 in-
terim final regulations, the Departments
certify that the Employee Benefits Secu-
rity Administration and the Centers for
Medicare & Medicaid Services have com-
August 30, 20102882010–35 I.R.B.

plied with the requirements of Executive
Order 13132 for the attached regulations in
a meaningful and timely manner.
V. Recommended Preventive Services
as of July 14, 2010.
The materials that follow list recom-
mended preventive services, current as of
July 14, 2010, that will have to be covered
without cost-sharing when delivered by
an in-network provider. In many cases,
the recommendations or guidelines went
into effect before September 23, 2009;
therefore the recommended services must
be covered under these interim final reg-
ulations in plan years (in the individual
market, policy years) that begin on or after
September 23, 2010. However, there are
some services that appear in the figure that
are based on recommendations or guide-
lines that went into effect at some point
later than September 23, 2009. Those ser-
vices do not have to be covered under these
interim final regulations until plan years
(in the individual market, policy years)
that begin at some point later than Septem-
ber 23, 2010. In addition, there are a
few recommendations and guidelines that
went into effect after September 23, 2009
and are not included in the figure. In both
cases, information athttp://www.Health-
Care.gov/center/regulations/preven-
tion.htmlspecifically identifies those ser-
vices and the relevant dates. The materials
athttp://www.HealthCare.gov/center/reg-
ulations/prevention.htmlwill be updated
on an ongoing basis, and will contain the
most current recommended preventive
services.
A.Recommendations of the United States
Preventive Services Task Force (Task
Force)
Recommendations of the Task Force
appear in a chart that follows. This chart
includes a description of the topic, the text
of the Task Force recommendation, the
grade the recommendation received (A or
B), and the date that the recommendation
went into effect.
B.Recommendations of the Advisory
Committee On Immunization Practices
(Advisory Committee) That Have Been
Adopted by the Director of the Centers for
Disease Control and Prevention
Recommendations of the Advisory
Committee appear in four immunization
schedules that follow: a schedule for
children age 0 to 6 years, a schedule for
children age 7 to 18 years, a “catch-up”
schedule for children, and a schedule for
adults. Immunization schedules are is-
sued every year, and the schedules that
appear here are the 2010 schedules. The
schedules contain graphics that provide
information about the recommended age
for vaccination, number of doses needed,
interval between the doses, and (for adults)
recommendations associated with partic-
ular health conditions. In addition to the
graphics, the schedules contain detailed
footnotes that provide further information
on each immunization in the schedule.
C.Comprehensive Guidelines Supported
by the Health Resources and Services
Administration (HRSA) for Infants,
Children, and Adolescents
Comprehensive guidelines for infants,
children, and adolescents supported by
HRSA appear in two charts that follow:
the Periodicity Schedule of the Bright
Futures Recommendations for Pediatric
Preventive Health Care, and the Uniform
Panel of the Secretary’s Advisory Com-
mittee on Heritable Disorders in Newborns
and Children.
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2010–35 I.R.B.295August 30, 2010

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August 30, 20103022010–35 I.R.B.

2010–35 I.R.B.303August 30, 2010

VI. Statutory Authority
The Department of the Treasury tem-
porary 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. 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).
The Department of Health and Hu-
man Services interim final regulations are
adopted pursuant to the authority con-
tained in sections 2701 through 2763,
2791, and 2792 of the PHS Act (42 USC
300gg through 300gg–63, 300gg–91, and
300gg–92), as amended.
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement,
Internal Revenue Service.
ApprovedJuly 8, 2010.
Michael F. Mundaca,
Assistant Secretary
oftheTreasury(TaxPolicy).
Signed this9thday ofJuly, 2010.
Phyllis C. Borzi,
Assistant Secretary
Employee Benefits
Security Administration
Department of Labor.
OCIIO–9992–IFC
Dated:July 9, 2010.
Jay Angoff,
Director,
Office of Consumer Information
and Insurance Oversight.
Dated:July 9, 2010.
Kathleen Sebelius,
Secretary,
Department of Health
and Human Services.
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Chapter 1
Accordingly, 26 CFR Part 54 is
amended as follows:
PART 54—PENSION EXCISE TAXES
Paragraph 1. The authority citation for
part 54 is amended by adding an entry
for §54.9815–2713T in numerical order to
read in part as follows:
Authority: 26 U.S.C. 7805. * * *
Section 54.9815–2713T also issued un-
der 26 U.S.C. 9833. * * *
Par. 2. Section 54.9815–2713T is
added to read as follows:
§54.9815–2713T Coverage of preventive
health services (temporary).
(a)Services—(1)In general.Begin-
ning at the time described in paragraph
(b) of this section, a group health plan,
or a health insurance issuer offering group
health insurance coverage, must provide
coverage for all of the following items and
services, and may not impose any cost-
sharing requirements (such as a copay-
ment, coinsurance, or deductible) with re-
spect to those items or services:
(i) Evidence-based items or services
that have in effect a rating of A or B in the
current recommendations of the United
States Preventive Services Task Force with
respect to the individual involved (except
as otherwise provided in paragraph (c) of
this section);
(ii) Immunizations for routine use in
children, adolescents, and adults that have
in effect a recommendation from the Ad-
visory Committee on Immunization Prac-
tices of the Centers for Disease Control
and Prevention with respect to the individ-
ual involved (for this purpose, a recom-
mendation from the Advisory Committee
on Immunization Practices of the Centers
for Disease Control and Prevention is con-
sidered in effect after it has been adopted
by the Director of the Centers for Disease
Control and Prevention, and a recommen-
dation is considered to be for routine use if
it is listed on the Immunization Schedules
of the Centers for Disease Control and Pre-
vention);
(iii) With respect to infants, children,
and adolescents, evidence-informed pre-
ventive care and screenings provided for
in comprehensive guidelines supported by
the Health Resources and Services Admin-
istration; and
(iv) With respect to women, to the ex-
tent not described in paragraph (a)(1)(i) of
this section, evidence-informed preven-
tive care and screenings provided for in
comprehensive guidelines supported by
the Health Resources and Services Ad-
ministration.
(2)Office visits— (i) If an item or ser-
vice described in paragraph (a)(1) of this
section is billed separately (or is tracked as
individual encounter data separately) from
an office visit, then a plan or issuer may
impose cost-sharing requirements with re-
spect to the office visit.
(ii) If an item or service described in
paragraph (a)(1) of this section is not billed
separately (or is not tracked as individual
encounter data separately) from an office
visit and the primary purpose of the office
visit is the delivery of such an item or ser-
vice, then a plan or issuer may not impose
cost-sharing requirements with respect to
the office visit.
(iii)Ifanitemorservicedescribedin
paragraph (a)(1) of this section is not billed
separately (or is not tracked as individual
encounter data separately) from an office
visit and the primary purpose of the office
visit is not the delivery of such an item or
service, then a plan or issuer may impose
cost-sharing requirements with respect to
the office visit.
(iv) The rules of this paragraph (a)(2)
are illustrated by the following examples:
Example 1.(i)Facts. An individual covered by
a group health plan visits an in-network health care
provider. While visiting the provider, the individual
is screened for cholesterol abnormalities, which has
in effect a rating of A or B in the current recommen-
dations of the United States Preventive Services Task
Force with respect to the individual. The provider
bills the plan for an office visit and for the laboratory
work of the cholesterol screening test.
(ii)Conclusion.InthisExample 1, the plan may
not impose any cost-sharing requirements with re-
spect to the separately-billed laboratory work of the
cholesterol screening test. Because the office visit is
billed separately from the cholesterol screening test,
the plan may impose cost-sharing requirements for
the office visit.
Example 2.(i)Facts. Same facts asExample 1.
As the result of the screening, the individual is diag-
nosed with hyperlipidemia and is prescribed a course
August 30, 20103042010–35 I.R.B.

of treatment that is not included in the recommenda-
tions under paragraph (a)(1) of this section.
(ii)Conclusion. In thisExample 2, because the
treatment is not included in the recommendations un-
der paragraph (a)(1) of this section, the plan is not
prohibited from imposing cost-sharing requirements
with respect to the treatment.
Example 3.(i)Facts. An individual covered by
a group health plan visits an in-network health care
provider to discuss recurring abdominal pain. During
the visit, the individual has a blood pressure screen-
ing,whichhasineffectaratingofAorBinthecur-
rent recommendations of the United States Preven-
tive Services Task Force with respect to the individ-
ual. The provider bills the plan for an office visit.
(ii)Conclusion.InthisExample 3, the blood pres-
sure screening is provided as part of an office visit for
which the primary purpose was not to deliver items
or services described in paragraph (a)(1) of this sec-
tion. Therefore, the plan may impose a cost-sharing
requirement for the office visit charge.
Example 4.(i)Facts. A child covered by a group
health plan visits an in-network pediatrician to re-
ceive an annual physical exam described as part of the
comprehensive guidelines supported by the Health
Resources and Services Administration. During the
office visit, the child receives additional items and
services that are not described in the comprehensive
guidelines supported by the Health Resources and
Services Administration, nor otherwise described in
paragraph (a)(1) of this section. The provider bills the
plan for an office visit.
(ii)Conclusion. In thisExample 4,theservice
was not billed as a separate charge and was billed as
part of an office visit. Moreover, the primary pur-
pose for the visit was to deliver items and services
described as part of the comprehensive guidelines
supported by the Health Resources and Services Ad-
ministration. Therefore, the plan may not impose a
cost-sharing requirement with respect to the office
visit.
(3)Out-of-network providers.Noth-
ing in this section requires a plan or is-
suer that has a network of providers to
provide benefits for items or services de-
scribed in paragraph (a)(1) of this section
that are delivered by an out-of-network
provider. Moreover, nothing in this sec-
tion precludes a plan or issuer that has a
network of providers from imposing cost-
sharing requirements for items or services
described in paragraph (a)(1) of this sec-
tion that are delivered by an out-of-net-
work provider.
(4)Reasonable medical management.
Nothing prevents a plan or issuer from
using reasonable medical management
techniques to determine the frequency,
method, treatment, or setting for an item
or service described in paragraph (a)(1) of
this section to the extent not specified in
the recommendation or guideline.
(5)Services not described. Nothing
in this section prohibits a plan or issuer
from providing coverage for items and
services in addition to those recommended
by the United States Preventive Services
Task Force or the Advisory Committee
on Immunization Practices of the Centers
for Disease Control and Prevention, or
provided for by guidelines supported by
the Health Resources and Services Ad-
ministration, or from denying coverage
for items and services that are not recom-
mended by that task force or that advisory
committee, or under those guidelines. A
plan or issuer may impose cost-sharing
requirements for a treatment not described
in paragraph (a)(1) of this section, even
if the treatment results from an item or
service described in paragraph (a)(1) of
this section.
(b)Timing—(1)In general. A plan or
issuer must provide coverage pursuant to
paragraph (a)(1) of this section for plan
years that begin on or after September 23,
2010, or, if later, for plan years that begin
on or after the date that is one year after
the date the recommendation or guideline
is issued.
(2)Changes in recommendations or
guidelines. A plan or issuer is not required
under this section to provide coverage for
any items and services specified in any
recommendation or guideline described
in paragraph (a)(1) of this section after
the recommendation or guideline is no
longer described in paragraph (a)(1) of
this section. Other requirements of Fed-
eral or State law may apply in connection
with a plan or issuer ceasing to provide
coverage for any such items or services,
including PHS Act section 2715(d)(4),
which requires a plan or issuer to give 60
days advance notice to an enrollee before
any material modification will become
effective.
(c)Recommendations not current.For
purposes of paragraph (a)(1)(i) of this
section, and for purposes of any other
provision of law, recommendations of the
United States Preventive Services Task
Force regarding breast cancer screening,
mammography, and prevention issued in
or around November 2009 are not consid-
ered to be current.
(d)Effective/applicability date.The
provisions of this section apply for plan
years beginning on or after September
23, 2010.See§54.9815–1251T for de-
termining the application of this section
to grandfathered health plans (providing
that these rules regarding coverage of pre-
ventive health services do not apply to
grandfathered health plans).
(e)Expiration date. This section ex-
pires on July 12, 2013 or on such earlier
dateasmaybeprovidedinfinalregula-
tions or other action published in theFed-
eral Register.
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Chapter XXV
29 CFR Part 2590 is amended as fol-
lows:
PART 2590—RULES AND
REGULATIONS FOR GROUP
HEALTH PLANS
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).
Subpart C—Other Requirements
2. Section 2590.715–2713 is added to
subpart C to read as follows:
§2590.715–2713 Coverage of preventive
health services.
(a)Services—(1)In general.Begin-
ning at the time described in paragraph
(b) of this section, a group health plan,
or a health insurance issuer offering group
health insurance coverage, must provide
coverage for all of the following items and
services, and may not impose any cost-
sharing requirements (such as a copay-
ment, coinsurance, or deductible) with re-
spect to those items or services:
(i) Evidence-based items or services
that have in effect a rating of A or B in the
current recommendations of the United
2010–35 I.R.B.305August 30, 2010

States Preventive Services Task Force with
respect to the individual involved (except
as otherwise provided in paragraph (c) of
this section);
(ii) Immunizations for routine use in
children, adolescents, and adults that have
in effect a recommendation from the Ad-
visory Committee on Immunization Prac-
tices of the Centers for Disease Control
and Prevention with respect to the individ-
ual involved (for this purpose, a recom-
mendation from the Advisory Committee
on Immunization Practices of the Centers
for Disease Control and Prevention is con-
sidered in effect after it has been adopted
by the Director of the Centers for Disease
Control and Prevention, and a recommen-
dation is considered to be for routine use if
it is listed on the Immunization Schedules
of the Centers for Disease Control and Pre-
vention);
(iii) With respect to infants, children,
and adolescents, evidence-informed pre-
ventive care and screenings provided for
in comprehensive guidelines supported by
the Health Resources and Services Admin-
istration; and
(iv) With respect to women, to the ex-
tent not described in paragraph (a)(1)(i) of
this section, evidence-informed preven-
tive care and screenings provided for in
comprehensive guidelines supported by
the Health Resources and Services Ad-
ministration.
(2)Office visits— (i) If an item or ser-
vice described in paragraph (a)(1) of this
section is billed separately (or is tracked as
individual encounter data separately) from
an office visit, then a plan or issuer may
impose cost-sharing requirements with re-
spect to the office visit.
(ii) If an item or service described in
paragraph (a)(1) of this section is not billed
separately (or is not tracked as individual
encounter data separately) from an office
visit and the primary purpose of the office
visit is the delivery of such an item or ser-
vice, then a plan or issuer may not impose
cost-sharing requirements with respect to
the office visit.
(iii)Ifanitemorservicedescribedin
paragraph (a)(1) of this section is not billed
separately (or is not tracked as individual
encounter data separately) from an office
visit and the primary purpose of the office
visit is not the delivery of such an item or
service, then a plan or issuer may impose
cost-sharing requirements with respect to
the office visit.
(iv) The rules of this paragraph (a)(2)
are illustrated by the following examples:
Example 1.(i)Facts. An individual
covered by a group health plan visits an
in-network health care provider. While
visiting the provider, the individual is
screened for cholesterol abnormalities,
which has in effect a rating of A or B
in the current recommendations of the
United States Preventive Services Task
Force with respect to the individual. The
provider bills the plan for an office visit
and for the laboratory work of the choles-
terol screening test.
(ii)Conclusion.InthisExample 1,the
plan may not impose any cost-sharing re-
quirements with respect to the separately-
billed laboratory work of the cholesterol
screening test. Because the office visit
is billed separately from the cholesterol
screening test, the plan may impose cost-
sharing requirements for the office visit.
Example 2.(i)Facts. Same facts asEx-
ample 1. As the result of the screening,
the individual is diagnosed with hyperlipi-
demia and is prescribed a course of treat-
ment that is not included in the recommen-
dations under paragraph (a)(1) of this sec-
tion.
(ii)Conclusion.InthisExample 2,be-
cause the treatment is not included in the
recommendations under paragraph (a)(1)
of this section, the plan is not prohibited
from imposing cost-sharing requirements
with respect to the treatment.
Example 3.(i)Facts. An individual
covered by a group health plan visits an
in-network health care provider to discuss
recurring abdominal pain. During the visit,
the individual has a blood pressure screen-
ing, which has in effect a rating of A or B in
the current recommendations of the United
States Preventive Services Task Force with
respect to the individual. The provider
bills the plan for an office visit.
(ii)Conclusion.InthisExample 3,the
blood pressure screening is provided as
part of an office visit for which the pri-
mary purpose was not to deliver items or
services described in paragraph (a)(1) of
this section. Therefore, the plan may im-
pose a cost-sharing requirement for the of-
fice visit charge.
Example 4.(i)Facts. A child covered
by a group health plan visits an in-network
pediatrician to receive an annual physical
exam described as part of the comprehen-
sive guidelines supported by the Health
Resources and Services Administration.
During the office visit, the child receives
additional items and services that are not
described in the comprehensive guidelines
supported by the Health Resources and
Services Administration, nor otherwise
described in paragraph (a)(1) of this sec-
tion. The provider bills the plan for an
office visit.
(ii)Conclusion.InthisExample 4,the
service was not billed as a separate charge
and was billed as part of an office visit.
Moreover, the primary purpose for the visit
was to deliver items and services described
as part of the comprehensive guidelines
supported by the Health Resources and
Services Administration. Therefore, the
plan may not impose a cost-sharing re-
quirement with respect to the office visit.
(3)Out-of-network providers.Noth-
ing in this section requires a plan or is-
suer that has a network of providers to
provide benefits for items or services de-
scribed in paragraph (a)(1) of this section
that are delivered by an out-of-network
provider. Moreover, nothing in this sec-
tion precludes a plan or issuer that has a
network of providers from imposing cost-
sharing requirements for items or services
described in paragraph (a)(1) of this sec-
tion that are delivered by an out-of-net-
work provider.
(4)Reasonable medical management.
Nothing prevents a plan or issuer from
using reasonable medical management
techniques to determine the frequency,
method, treatment, or setting for an item
or service described in paragraph (a)(1) of
this section to the extent not specified in
the recommendation or guideline.
(5)Services not described. Nothing
in this section prohibits a plan or issuer
from providing coverage for items and
services in additionto those recommended
by the United States Preventive Services
Task Force or the Advisory Committee
on Immunization Practices of the Centers
for Disease Control and Prevention, or
provided for by guidelines supported by
the Health Resources and Services Ad-
ministration, or from denying coverage
for items and services that are not recom-
mended by that task force or that advisory
committee, or under those guidelines. A
plan or issuer may impose cost-sharing
requirements for a treatment not described
August 30, 20103062010–35 I.R.B.

in paragraph (a)(1) of this section, even
if the treatment results from an item or
service described in paragraph (a)(1) of
this section.
(b)Timing—(1)In general.Aplanor
issuer must provide coverage pursuant to
paragraph (a)(1) of this section for plan
years that begin on or after September 23,
2010, or, if later, for plan years that begin
on or after the date that is one year after
the date the recommendation or guideline
is issued.
(2)Changes in recommendations or
guidelines. A plan or issuer is not required
under this section to provide coverage for
any items and services specified in any
recommendation or guideline described
in paragraph (a)(1) of this section after
the recommendation or guideline is no
longer described in paragraph (a)(1) of
this section. Other requirements of Fed-
eral or State law may apply in connection
with a plan or issuer ceasing to provide
coverage for any such items or services,
including PHS Act section 2715(d)(4),
which requires a plan or issuer to give 60
days advance notice to an enrollee before
any material modification will become
effective.
(c)Recommendations not current.For
purposes of paragraph (a)(1)(i) of this
section, and for purposes of any other
provision of law, recommendations of the
United States Preventive Services Task
Force regarding breast cancer screening,
mammography, and prevention issued in
or around November 2009 are not consid-
ered to be current.
(d)Applicability date. The provisions
of this section apply for plan years be-
ginning on or after September 23, 2010.
See§2590.715–1251 of this Part for de-
termining the application of this section to
grandfathered health plans (providing that
these rules regarding coverage of preven-
tive health services do not apply to grand-
fathered health plans).
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
45 CFR Subtitle A
For the reasons stated in the preamble,
the Department of Health and Human Ser-
vices amends 45 CFR part 147, added May
13, 2010, at 75 FR 27138, effective July
12, 2010, as follows:
PART 147—HEALTH INSURANCE
REFORM REQUIREMENTS FOR
THE GROUP AND INDIVIDUAL
HEALTH INSURANCE MARKETS
1. The authority citation for part 147
continues to read as follows:
Authority:Sections 2701 through
2763, 2791, and 2792 of the Public Health
Service Act (42 USC 300gg through
300gg–63, 300gg–91, and 300gg–92), as
amended.
2. Add §147.130 to read as follows:
§147.130 Coverage of preventive health
services.
(a)Services—(1)In general.Begin-
ning at the time described in paragraph (b)
of this section, a group health plan, or a
health insurance issuer offering group or
individual health insurance coverage, must
provide coverage for all of the following
items and services, and may not impose
any cost-sharing requirements (such as a
copayment, coinsurance, or deductible)
with respect to those items or services:
(i) Evidence-based items or services
that have in effect a rating of A or B in the
current recommendations of the United
States Preventive Services Task Force with
respect to the individual involved (except
as otherwise provided in paragraph (c) of
this section);
(ii) Immunizations for routine use in
children, adolescents, and adults that have
in effect a recommendation from the Ad-
visory Committee on Immunization Prac-
tices of the Centers for Disease Control
and Prevention with respect to the individ-
ual involved (for this purpose, a recom-
mendation from the Advisory Committee
on Immunization Practices of the Centers
for Disease Control and Prevention is con-
sidered in effect after it has been adopted
by the Director of the Centers for Disease
Control and Prevention, and a recommen-
dation is considered to be for routine use if
it is listed on the Immunization Schedules
of the Centers for Disease Control and Pre-
vention);
(iii) With respect to infants, children,
and adolescents, evidence-informed pre-
ventive care and screenings provided for
in comprehensive guidelines supported by
the Health Resources and Services Admin-
istration; and
(iv) With respect to women, to the ex-
tent not described in paragraph (a)(1)(i) of
this section, evidence-informed preven-
tive care and screenings provided for in
comprehensive guidelines supported by
the Health Resources and Services Ad-
ministration.
(2)Office visits— (i) If an item or ser-
vice described in paragraph (a)(1) of this
section is billed separately (or is tracked as
individual encounter data separately) from
an office visit, then a plan or issuer may
impose cost-sharing requirements with re-
spect to the office visit.
(ii) If an item or service described in
paragraph (a)(1) of this section is not billed
separately (or is not tracked as individual
encounter data separately) from an office
visit and the primary purpose of the office
visit is the delivery of such an item or ser-
vice, then a plan or issuer may not impose
cost-sharing requirements with respect to
the office visit.
(iii)Ifanitemorservicedescribedin
paragraph (a)(1) of this section is not billed
separately (or is not tracked as individual
encounter data separately) from an office
visit and the primary purpose of the office
visit is not the delivery of such an item or
service, then a plan or issuer may impose
cost-sharing requirements with respect to
the office visit.
(iv) The rules of this paragraph (a)(2)
are illustrated by the following examples:
Example 1.(i)Facts. An individual
covered by a group health plan visits an
in-network health care provider. While
visiting the provider, the individual is
screened for cholesterol abnormalities,
which has in effect a rating of A or B
in the current recommendations of the
United States Preventive Services Task
Force with respect to the individual. The
provider bills the plan for an office visit
and for the laboratory work of the choles-
terol screening test.
(ii)Conclusion.InthisExample 1,the
plan may not impose any cost-sharing re-
quirements with respect to the separately-
billed laboratory work of the cholesterol
screening test. Because the office visit
is billed separately from the cholesterol
screening test, the plan may impose cost-
sharing requirements for the office visit.
Example 2.(i)Facts. Same facts asEx-
ample 1. As the result of the screening,
the individual is diagnosed with hyperlipi-
demia and is prescribed a course of treat-
2010–35 I.R.B.307August 30, 2010

ment that is not included in the recommen-
dations under paragraph (a)(1) of this sec-
tion.
(ii)Conclusion.InthisExample 2,be-
cause the treatment is not included in the
recommendations under paragraph (a)(1)
of this section, the plan is not prohibited
from imposing cost-sharing requirements
with respect to the treatment.
Example 3.(i)Facts. An individual
covered by a group health plan visits an
in-network health care provider to discuss
recurring abdominal pain. During the visit,
the individual has a blood pressure screen-
ing, which has in effect a rating of A or B in
the current recommendations of the United
States Preventive Services Task Force with
respect to the individual. The provider
bills the plan for an office visit.
(ii)Conclusion.InthisExample 3,the
blood pressure screening is provided as
part of an office visit for which the pri-
mary purpose was not to deliver items or
services described in paragraph (a)(1) of
this section. Therefore, the plan may im-
pose a cost-sharing requirement for the of-
fice visit charge.
Example 4.(i)Facts. A child covered
by a group health plan visits an in-network
pediatrician to receive an annual physical
exam described as part of the comprehen-
sive guidelines supported by the Health
Resources and Services Administration.
During the office visit, the child receives
additional items and services that are not
described in the comprehensive guidelines
supported by the Health Resources and
Services Administration, nor otherwise
described in paragraph (a)(1) of this sec-
tion. The provider bills the plan for an
office visit.
(ii)Conclusion.InthisExample 4,the
service was not billed as a separate charge
and was billed as part of an office visit.
Moreover, the primary purpose for the visit
was to deliver items and services described
as part of the comprehensive guidelines
supported by the Health Resources and
Services Administration. Therefore, the
plan may not impose a cost-sharing re-
quirement for the office visit charge.
(3)Out-of-network providers.Noth-
ing in this section requires a plan or is-
suer that has a network of providers to
provide benefits foritems or services de-
scribed in paragraph (a)(1) of this section
that are delivered by an out-of-network
provider. Moreover, nothing in this sec-
tion precludes a plan or issuer that has a
network of providers from imposing cost-
sharing requirements for items or services
described in paragraph (a)(1) of this sec-
tion that are delivered by an out-of-net-
work provider.
(4)Reasonable medical management.
Nothing prevents a plan or issuer from
using reasonable medical management
techniques to determine the frequency,
method, treatment, or setting for an item
or service described in paragraph (a)(1) of
this section to the extent not specified in
the recommendation or guideline.
(5)Services not described. Nothing
in this section prohibits a plan or issuer
from providing coverage for items and
services in addition to those recommended
by the United States Preventive Services
Task Force or the Advisory Committee
on Immunization Practices of the Centers
for Disease Control and Prevention, or
provided for by guidelines supported by
the Health Resources and Services Ad-
ministration, or from denying coverage
for items and services that are not recom-
mended by that task force or that advisory
committee, or under those guidelines. A
plan or issuer may impose cost-sharing
requirements for a treatment not described
in paragraph (a)(1) of this section, even
if the treatment results from an item or
service described in paragraph (a)(1) of
this section.
(b)Timing—(1)In general. A plan or
issuer must provide coverage pursuant to
paragraph (a)(1) of this section for plan
years (in the individual market, policy
years) that begin on or after September
23, 2010, or, if later, for plan years (in the
individual market, policy years) that begin
on or after the date that is one year after
the date the recommendation or guideline
is issued.
(2)Changes in recommendations or
guidelines. A plan or issuer is not required
under this section to provide coverage for
any items and services specified in any
recommendation or guideline described
in paragraph (a)(1) of this section after
the recommendation or guideline is no
longer described in paragraph (a)(1) of
this section. Other requirements of Fed-
eral or State law may apply in connection
with a plan or issuer ceasing to provide
coverage for any such items or services,
including PHS Act section 2715(d)(4),
which requires a plan or issuer to give 60
days advance notice to an enrollee before
any material modification will become
effective.
(c)Recommendations not current.For
purposes of paragraph (a)(1)(i) of this
section, and for purposes of any other
provision of law, recommendations of the
United States Preventive Services Task
Force regarding breast cancer screening,
mammography, and prevention issued in
or around November 2009 are not consid-
ered to be current.
(d)Applicability date. The provisions
of this section apply for plan years (in the
individual market, for policy years) begin-
ning on or after September 23, 2010.See
§147.140 of this Part for determining the
application of this section to grandfathered
health plans (providing that these rules re-
garding coverage of preventive health ser-
vices do not apply to grandfathered health
plans).
(Filed by the Office of the Federal Register on July 14, 2010,
11:15 a.m., and published in the issue of the Federal Register
for July 19, 2010, 75 F.R. 41726)
August 30, 20103082010–35 I.R.B.

Part III. Administrative, Procedural, and Miscellaneous
26 CFR 601.105: Examination of returns and claims
for refund, credit, or abatement; determination of tax
liability.
Rev. Proc. 2010–29
SECTION 1. PURPOSE
This revenue procedure provides the
domestic asset/liability percentages and
domestic investment yields needed by for-
eign life insurance companies and foreign
property and liability insurance compa-
nies to compute their minimum effectively
connected net investment income under
section 842(b) of the Internal Revenue
Code for taxable years beginning after
December 31, 2008. Instructions are pro-
vided for computing foreign insurance
companies’ liabilities for the estimated tax
and installment payments of estimated tax
for taxable years beginning after Decem-
ber 31, 2008. For more specific guidance
regarding the computation of the amount
of net investment income to be included by
a foreign insurance company on its U.S. in-
come tax return, see Notice 89–96, 1989–2
C.B. 417. For the domestic asset/liability
percentage and domestic investment yield,
as well as instructions for computing for-
eign insurance companies’ liabilities for
estimated tax and installment payments of
estimated tax for taxable years beginning
after December 31, 2007, see Rev. Proc.
2009–34, 2009–34 I.R.B. 258.
SECTION 2. CHANGES
DOMESTICASSET/LIABILITY
PERCENTAGES FOR 2009. The Secre-
tary determines the domestic asset/liability
percentage separately for life insurance
companies and property and liability in-
surance companies. For the first taxable
year beginning after December 31, 2008,
the relevant domestic asset/liability per-
centages are:
138.5 percent for foreign life insurance
companies, and
193.4 percent for foreign property and
liability insurance companies.
.02 DOMESTIC INVESTMENT
YIELDS FOR 2009. The Secretary is
required to prescribe separate domestic in-
vestment yields for foreign life insurance
companies and for foreign property and
liability insurance companies. For the first
taxable year beginning after December 31,
2008, the relevant domestic investment
yields are:
5.2 percent for foreign life insurance
companies, and
4.2 percent for foreign property and li-
ability insurance companies.
.03 SOURCE OF DATA FOR 2009.
The section 842(b) percentages to be used
for the 2009 tax year are based on tax re-
turn data following the same methodology
used for the 2008 year.
SECTION 3.
APPLICATION—ESTIMATED TAXES
To compute estimated tax and the in-
stallment payments of estimated tax due
for taxable years beginning after Decem-
ber 31, 2008, a foreign insurance com-
pany must compute its estimated tax pay-
ments by adding to its income other than
net investment income the greater of (i) its
net investment income as determined un-
der section 842(b)(5), that is actually ef-
fectively connected with the conduct of a
trade or business within the United States
for the relevant period, or (ii) the mini-
mum effectively connected net investment
income under section 842(b) that would re-
sult from using the most recently available
domestic asset/liability percentage and do-
mestic investment yield. Thus, for install-
ment payments due after the publication of
this revenue procedure, the domestic as-
set/liability percentages and the domestic
investment yields provided in this revenue
procedure must be used to compute the
minimum effectively connected net invest-
ment income. However, if the due date of
an installment is less than 20 days after the
date this revenue procedure is published
in the Internal Revenue Bulletin, the as-
set/liability percentages and domestic in-
vestment yields provided in Rev. Proc.
2009–34 may be used to compute the mini-
mum effectively connected net investment
income for such installment. For further
guidance in computing estimated tax, see
Notice 89–96.
SECTION 4. EFFECTIVE DATE
This revenue procedure is effective for
taxable years beginning after December
31, 2008.
SECTION 5. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Sheila Ramaswamy of the
Office of Associate Chief Counsel (In-
ternational). For further information re-
garding this revenue procedure, contact
Sheila Ramaswamy at (202) 622–3870
(not a toll-free call).
2010–35 I.R.B.309August 30, 2010

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking by
Cross-Refere
nce to
Temporary Re
gulations
Requirement
for Group Health
Plans and Hea
lth Insurance
Issuers to P
rovide Coverage
of Preventi
ve Services under
the Patien
tProtectionand
Affordabl
eCareAct
REG–12039
1–10
AGENCY: In
ternal Revenue Service
(IRS), Tr
easury.
ACTION: No
tice of proposed rulemaking
by cross-
reference to temporary regula-
tions.
SUMMARY:
Elsewhere in this issue of the
Bulletin
, the IRS is issuing temporary reg-
ulations
(T.D. 9493) under the provisions
of the Pa
tient Protection and Affordable
Care Act
(the Affordable Care Act) regard-
ing prev
entive health services. The IRS
is issui
ng the temporary regulations at the
same tim
e that the Employee Benefits Se-
curity
Administration of the U.S. Depart-
ment of
Labor and the Office of Consumer
Inform
ation and Insurance Oversight of
the U.S
. Department of Health and Hu-
man Ser
vices are issuing substantially sim-
ilar i
nterim final regulations with respect
to gro
up health plans and health insur-
ance c
overage offered in connection with a
group
health plan under the Employee Re-
tirem
ent Income Security Act of 1974 and
the P
ublic Health Service Act. The tempo-
rary
regulations provide guidance to em-
ploy
ers, group health plans, and health in-
sura
nce issuers providing group health in-
sura
nce coverage. The text of those tem-
por
ary regulations also serves as the text
of t
hese proposed regulations.
DAT
ES: Written or electronic comments
and
requests for a public hearing must be
rec
eived by October 18, 2010.
ADD
RESSES: Send submissions to:
CC:
PA:LPD:PR(REG–120391–10),
room 5205, Int
ernal Revenue Service,
P.O. Box 7604,
BenFranklinSta-
tion, Washing
ton, DC 20044. Sub-
missions may b
e hand-delivered to:
CC:PA:LPD:PR
(REG–120391–10),
Courier’s De
sk, Internal Revenue Ser-
vice, 1111 Co
nstitution Avenue, NW,
Washington D
C 20224. Alternatively,
taxpayers ma
y submit comments elec-
tronically
via the Federal eRulemaking
Portal atht
tp://www.regulations.gov(IRS
REG–120391
–10).
FOR FURTHER
INFORMATION
CONTACT: Co
ncerning the regula-
tions, Kar
en Levin at 202–622–6080;
concernin
g submissions of com-
ments,Ric
hard A. Hurst at
Richard.A
.Hurst@irscounsel.treas.gov.
SUPPLEMEN
TARY INFORMATION:
Backgroun
d and Explanation of
Provision
s
The tempor
ary regulations published
elsewher
e in this issue of the Bulletin add
§54.9815
–2713T to the Miscellaneous Ex-
cise Tax R
egulations. The proposed and
temporar
y regulations are being published
as part o
f a joint rulemaking with the De-
partmen
t of Labor and the Department
of Healt
h and Human Services (the joint
rulemak
ing). The text of those temporary
regulat
ions also serves as the text of these
propos
ed regulations. The preamble to
the tem
porary regulations explains the
tempor
ary regulations and these proposed
regula
tions.
Specia
lAnalyses
It has b
een determined that this notice
of prop
osed rulemaking is not a signifi-
cant re
gulatory action as defined in Exec-
utive
Order 12866. Therefore, a regula-
tory a
ssessment is not required. It has also
been d
etermined that section 553(b) of the
Admin
istrative Procedure Act (5 U.S.C.
chapt
er 5) does not apply to these regu-
lati
ons, and because the regulation does
not i
mpose a collection of information re-
quir
ement on small entities, the Regula-
tory
Flexibility Act (5 U.S.C. chapter 6)
does
not apply. Pursuant to section 7805(f)
of the Interna
l Revenue Code, this regula-
tion has been s
ubmitted to the Chief Coun-
sel for Advoca
cy of the Small Business
Administrati
on for comment on its impact
on small busin
ess.
Comments and Requests for a Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written comments
(a signed original and eight (8) copies)
or electronic comments that are submitted
timely to the IRS. Comments are specifi-
cally requested on the clarity of the pro-
posed regulations and how they may be
made easier to understand. All comments
will be available for public inspection and
copying. A public hearing may be sched-
uled if requested in writing by a person
that timely submits written comments. If
a public hearing is scheduled, notice of the
date, time, and place for the hearing will
be published in the Federal Register.
Draftin
g Information
The principal author of these proposed
regulations is Karen Levin, Office of the
Division Counsel/Associate Chief Coun-
sel (Tax Exempt and Government Enti-
ties), IRS. The proposed regulations, as
well as the temporary regulations, have
been developed in coordination with per-
sonnel from the U.S. Department of Labor
and the U.S. Department of Health and Hu-
man Services.
*****
Propo
sed Amendments to the
Regul
ations
Accordingly, 26 CFR part 54 is pro-
posed to be amended as follows:
PART 54—PENSION EXCISE TAXES
Para
graph 1. The authority citation for
part
54 is amended by adding an entry in
nume
rical order to read in part as follows:
Auth
ority: 26 U.S.C. 7805 * * *
Sect
ion 54.9815–2713 also issued un-
der 2
6 U.S.C. 9833. * * *
August 30, 20103102010–35 I.R.B.

Par. 2. Section 54.9815–2713 is added
to read as follows:
§54.9815–2713 Coverage of preventive
health services.
[The text of proposed §54.9815–2713
is the same as the text of paragraphs (a)
through (c) of §54.9815–2713T published
elsewhere in this issue of the Bulletin].
Steven T. Miller,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on July 14, 2010,
11:15 a.m., and published in the issue of the Federal Register
for July 19, 2010, 75 F.R. 41787)
2010–35 I.R.B.311August 30, 2010

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
August 30, 2010i2010–35 I.R.B.

Numerical Finding List
1
Bulletins 2010–27 through 2010–35
Announcements:
2010-43, 2010-27 I.R.B.42
2010-44, 2010-28 I.R.B.54
2010-45, 2010-29 I.R.B.87
2010-46, 2010-29 I.R.B.87
2010-47, 2010-30 I.R.B.173
2010-48, 2010-32 I.R.B.234
2010-49, 2010-34 I.R.B.272
2010-50, 2010-33 I.R.B.260
2010-51, 2010-33 I.R.B.261
Notices:
2010-48, 2010-27 I.R.B.9
2010-49, 2010-27 I.R.B.10
2010-50, 2010-27 I.R.B.12
2010-51, 2010-29 I.R.B.83
2010-52, 2010-30 I.R.B.88
2010-53, 2010-31 I.R.B.182
2010-55, 2010-33 I.R.B.253
2010-56, 2010-33 I.R.B.254
2010-57, 2010-34 I.R.B.267
Proposed Regulations:
REG-139343-08, 2010-33 I.R.B.256
REG-151605-09, 2010-31 I.R.B.184
REG-112841-10, 2010-27 I.R.B.41
REG-118412-10, 2010-29 I.R.B.85
REG-120391-10, 2010-35 I.R.B.310
REG-120399-10, 2010-32 I.R.B.239
Revenue Procedures:
2010-25, 2010-27 I.R.B.16
2010-26, 2010-30 I.R.B.91
2010-27, 2010-31 I.R.B.183
2010-28, 2010-34 I.R.B.270
2010-29, 2010-35 I.R.B.309
Revenue Rulings:
2010-18, 2010-27 I.R.B.1
2010-19, 2010-31 I.R.B.174
Tax Conventions:
2010-48, 2010-32 I.R.B.234
Treasury Decisions:
9486, 2010-27 I.R.B.3
9487, 2010-28 I.R.B.48
9488, 2010-28 I.R.B.51
9489, 2010-29 I.R.B.55
9490, 2010-31 I.R.B.176
9491, 2010-32 I.R.B.186
9492, 2010-33 I.R.B.242
Treasury Decisions— Continued:
9493, 2010-35 I.R.B.273
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2010–1 through 2010–26 is in Internal Revenue Bulletin
2010–26, dated June 28, 2010.
2010–35 I.R.B.iiAugust 30, 2010

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2010–27 through 2010–35
Notices:
2003-19
Revoked by
Notice 2010-53, 2010-31 I.R.B.182
2009-47
Obsoleted by
Rev. Proc. 2010-28, 2010-34 I.R.B.270
Revenue Procedures:
81-18
Obsoleted by
Rev. Proc. 2010-27, 2010-31 I.R.B.183
2007-44
Modified by
Notice 2010-48, 2010-27 I.R.B.9
2009-18
Obsoleted in part by
Rev. Proc. 2010-25, 2010-27 I.R.B.16
2009-30
Superseded by
Rev. Proc. 2010-26, 2010-30 I.R.B.91
Treasury Decisions:
9487
Corrected by
Ann. 2010-50, 2010-33 I.R.B.260
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2010–1 through 2010–26 is in Internal Revenue Bulletin 2010–26, dated June 28, 2010.
August 30, 2010iii2010–35 I.R.B.

INDEX
Internal Revenue Bulletins 2010–27 through
2010–35
The abbreviation and number in parenthesis following the index entry
refer to the specific item; numbers in roman and italic type following
the parenthesis refers to the Internal Revenue Bulletin in which the item
may be found and the page number on which it appears.
Key to Abbreviations:
AnnAnnouncement
CDCourt Decision
DODelegation Order
EOExecutive Order
PLPublic Law
PTEProhibited Transaction Exemption
RPRevenue Procedure
RRRevenue Ruling
SPRStatement of Procedural Rules
TCTax Convention
TDTreasury Decision
TDOTreasury Department Order
EMPLOYEE PLANS
Disaster relief, qualified plans (Notice 48) 27,9
Excise taxes on prohibited tax shelter transactions and related
provisions (TD 9492) 33,242
Full funding, weighted average interest rates, segment rates for:
July 2010 (Notice 52) 30,88
August 2010 (Notice 57) 34,267
Proposed regulations:
26 CFR 54.9815–2704, –2711, –2712, –2719A, added; re-
quirements for group healthplans and health insurance
issuers under the Patient Protection and Affordable Care
Act relating to preexisting condition exclusions, lifetime
and annual limits, rescissions, and patient protections
(REG–120399–10) 32,239
26 CFR 54.9815–2713, added; rules relating to coverage of
preventive health services (REG–120391–10) 35,310
Qualified plans:
Alternative amortization schedules for single-employer plans
under PRA 2010 (Notice 55) 33,253
Special funding rules for multiemployer plans under PRA
2010 (Notice 56) 33,254
Regulations:
26 CFR 1.6033–5, added; 1.6033–5T, removed; 53.4965–1
thru –9, added; 53.6071–1, revised; 53.6071–1T(g) &
(h), removed; 54.6011–1, revised; 54.6011–1T(c) & (d),
removed; 301.6011(g)–1, added; 301.6033–5, added;
301.6033–5T, removed; 602.101, amended; excise taxes
on prohibited tax shelter transactions and related disclo-
sure requirements, disclosure requirements with respect to
prohibited tax shelter transactions, requirement of return
and time for filing (TD 9492) 33,242
EMPLOYEE PLANS—Cont.
26 CFR 54.9801–2, –3, amended; 54.9815–2704T, –2711T,
–2712T, –2719AT, added; 602.101(b), amended; require-
ments for group health plans and health insurance issuers
under the Patient Protection andAffordable Care Act relat-
ing to preexisting condition exclusions, lifetime and annual
limits, rescissions, and patient protections (TD 9491) 32,
186
26 CFR 54.9815–1251T, added; rules relating to status as
grandfathered health plans for group health plans and health
insurance coverage (TD 9489) 29,55
26 CFR 54.9815–2713T, added; rules relating to coverage of
preventive health services (TD 9493) 35,273
Revocation of Notice 2003–19 (Notice 53) 31,182
Rules relating to coverage of preventive health services (TD
9493) 35,273; (REG–120391–10) 35,310
Rules relating to preexisting condition exclusions, lifetime and
annual limits, rescissions, and patient protections (TD 9491)
32,186; (REG–120399–10) 32,239
Rules relating to status as grandfathered health plans for group
health plans and health insurance coverage (TD 9489) 29,55;
(REG-118412–10) 29,85
EMPLOYMENT TAX
Examination of returns and claims for refund, credit or abate-
ment, determination of correct tax liability (RP 27) 31,183
Revocation of Notice 2003–19 (Notice 53) 31,182
ESTATE TAX
Revocation of Notice 2003–19 (Notice 53) 31,182
EXCISE TAX
Examination of returns and claims for refund, credit or abate-
ment, determination of correct tax liability (RP 27) 31,183
Excise taxes on prohibited tax shelter transactions and related
provisions (TD 9492) 33,242
Guidance on section 5000B, indoor tanning services excise tax
(TD 9486) 27,3; (REG–112841–10) 27,41
Proposed regulations:
26 CFR 40.0–1, amended; 40.6302(c)–1, amended; 49.0–3,
added; 49.5000B–1, added; indoor tanning services excise
tax (REG–112841–10) 27,41
26 CFR 54.9815–1251T, added; rules relating to status as
grandfathered health plans for group health plans and health
insurance coverage (REG-118412–10) 29,85
26 CFR 54.9815–2704, –2711, –2712, –2719A, added; re-
quirements for group health plans and health insurance
issuers under the Patient Protection and Affordable Care
Act relating to preexisting condition exclusions, lifetime
and annual limits, rescissions, and patient protections
(REG–120399–10) 32,239
26 CFR 54.9815–2713, added; rules relating to coverage of
preventive health services (REG–120391–10) 35,310
2010–35 I.R.B.ivAugust 30, 2010

EXCISE TAX—Cont.
Regulations:
26 CFR 1.6033–5, added; 1.6033–5T, removed; 53.4965–1
thru –9, added 53.6071–1, revised; 53.6071–1T(g) &
(h), removed; 54.6011–1, revised; 54.6011–1T(c) & (d),
removed; 301.6011(g)–1, added; 301.6033–5, added;
301.6033–5T, removed; 602.101, amended; excise taxes
on prohibited tax shelter transactions and related disclo-
sure requirements, disclosure requirements with respect to
prohibited tax shelter transactions, requirement of return
and time for filing (TD 9492) 33,242
26 CFR 40.0–1, amended; 40.0–1T, added; 40.6302(c)–1,
amended; 40.6302(c)–1T, added; 49.0–3T, added;
49.5000B–1T, added; 602.101, amended; indoor tanning
services excise taxe (TD 9486) 27,3
26 CFR 54.9801–2, –3, amended; 54.9815–2704T, –2711T,
–2712T, –2719AT, added; 602.101(b) amended; require-
ments for group health plans and health insurance issuers
under the Patient Protection and Affordable Care Act relat-
ing to preexisting condition exclusions, lifetime and annual
limits, rescissions, and patient protections (TD 9491) 32,
186
26 CFR 54.9815–1251T, added; rules relating to status as
grandfathered healthplans for group health plans and health
insurance coverage (TD 9489) 29,55
26 CFR 54.9815–2713T, added; rules relating to coverage of
preventive health services (TD 9493) 35,273
Revocation of Notice 2003–19 (Notice 53) 31,182
Rules relating to coverage of preventive health services (TD
9493) 35,273; (REG–120391–10) 35,310
Rules relating to preexisting condition exclusions, lifetime and
annual limits, rescissions, and patient protections (TD 9491)
32,186; (REG–120399–10) 32,239
Rules relating to status as grandfathered health plans for group
health plans and health insurance coverage (TD 9489) 29,55;
(REG-118412–10) 29,85
EXEMPT ORGANIZATIONS
Excise taxes on prohibited tax shelter transactions and related
provisions (TD 9492) 33,242
Regulations:
26 CFR 1.6033–5, added; 1.6033–5T, removed; 53.4965–1
thru –9, added 53.6071–1, revised; 53.6071–1T(g) &
(h), removed; 54.6011–1, revised; 54.6011–1T(c) & (d),
removed; 301.6011(g)–1, added; 301.6033–5, added;
301.6033–5T, removed; 602.101, amended; excise taxes
on prohibited tax shelter transactions and related disclo-
sure requirements, disclosure requirements with respect to
prohibited tax shelter transactions, requirement of return
and time for filing (TD 9492) 33,242
Revocation of Notice 2003–19 (Notice 53) 31,182
Revocations (Ann 44) 28,54;(Ann45)29,87; (Ann 47) 30,173;
(Ann 49) 34,272
GIFT TAX
Revocation of Notice 2003–19 (Notice 53) 31,182
INCOME TAX
Corporations, section 382 treatment of prepaid income under
built-in gain provisions of section 382(h) (TD 9487) 28,48;
corrections (Ann 50) 33,260
Declaratory Judgment Suits (Ann 46) 29,87
Disciplinary actionsinvolving attorneys,certified public accoun-
tants, enrolled agents, and enrolled actuaries (Ann 43) 27,42;
(Ann 51) 33,261
Examination of returns and claims for refund, credit or abate-
ment, determination of correct tax liability (RP 27) 31,183
Extended carryback of losses to or from a consolidated group
(TD 9490) 31,176; (REG–151605–09) 31,184
Forms, 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G,
requirements for filing electronically, 2010 revision (RP 26)
30,91
Information reporting under the amendments to section 6041 for
gross proceeds paid and for payments to corporations (Notice
51) 29,83
Insurance companies:
Effectively connected income (RP 29) 35,309
Safe harbor under sections 7702 and 7702A for contracts with
a maturity date of 100, life insurance (RP 28) 34,270
Interest:
Investment:
Federal short-term, mid-term, and long-term rates for:
July 2010 (RR 18) 27,1
August 2010 (RR 19) 31,174
Interest and penalty suspension provisions under section 6404(g)
of the Internal Revenue Code (TD 9488) 28,51
Proposed Regulations:
26 CFR 1.1502–21, revised; extended carryback of losses to
or from a consolidated group (REG–151605–09) 31,184
26 CFR 300.0 thru 300.8, amended; 300.9, added; user fees
relating to enrollment and preparer tax identification num-
ber (REG–139343–08) 33,256
Publication 1220, Specifications for Filing Forms 1097, 1098,
1099, 3921, 3922, 5498, 8935, and W-2G Electronically, 2010
revision (RP 26) 30,91
Qualified mortgage bonds (QMBs) and mortgage credit certifi-
cate (MCCs), average area housing purchase price for 2010
(RP 25) 27,16
Regulations:
26 CFR 1.382–1, amended; 1.382–1T, added; 1.382–7, added;
1.382–7T, removed; built-in gains and losses under section
382(h) (TD 9487) 28,48; 1.382–2T, amended, correction
(Ann 50) 33,260
26 CFR 1.1502–21, amended; 1.1502–21T, revised; 602.101,
revised; extended carryback of losses to or from a consoli-
dated group (TD 9490) 31,176
26 CFR 301.6404–0, –4, added; 301.6404–4T, removed;
interest and penalty suspension provisions under section
6404(g) of the Internal Revenue Code (TD 9488) 28,51
August 30, 2010v2010–35 I.R.B.

INCOME TAX—Cont.
Revocation of Notice 2003–19 (Notice 53) 31,182
Revocations, exempt organizations (Ann 44) 28,54;(Ann45)
29,87; (Ann 47) 30,173;(Ann49)34,272
Section 382 limitation:
Fluctuation in value, ownership changes (Notice 50) 27,12
Ownership changes, small shareholders (Notice 49) 27,10
Tax convention, U.S. –Greenland reciprocal exemption agree-
ment (Ann 48) 32,234
User fees relating to enrollment and preparer tax identification
numbers (REG–139343–08) 33,256
SELF-EMPLOYMENT TAX
Revocation of Notice 2003–19 (Notice 53) 31,182
2010–35 I.R.B.viAugust 30, 2010

August 30, 20102010–35 I.R.B.

2010–35 I.R.B.August 30, 2010

August 30, 20102010–35 I.R.B.

INTERNAL REVENUE BULLETIN
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