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From: Nielsen, Mark (mcn@groom.com) [MNielsen@groom.com] Sent: Thursday, September 16, 2010 5:01 PM To: HHS HealthInsurance (HHS) Cc: Mazawey, Lou (ltm@groom.com) Subject: Waiver--UFT Welfare Fund Attachments: 20100916 Waiver Request.pdf
Dear Mr. Mayhew, On behalf of the United Federation of Teachers Welfare Fund (the "UFT Fund"), I am submitting this application for waiver of the restricted annual limits under Public Health Services Act 2711, pursuant to OCIIO Sub-Regulatory Guidance OCIIO 2010-1. The UFT Fund has a Plan Year that commences October 1, 2010. Accordingly, we respectfullyrequest the Department's expedited review of thiswaiver request, as provided for by 3 of the Sub-Regulatory Guidance. We appreciate your consideration of the UFT Fund's request. Please let Lou Mazawey or me know if you have any questions or need anything else. Lou can be reached at 202.861.6608, and I can be reached at at 202.861.5429. Best regards, Mark C. Nielsen

Mark C. Nielsen / 1701 Pennsylvania Ave., N.W. / Washington, DC 20006 / Phone: 202-861-5429 / Fax: 202-659-4503 / www.Groom.com / MNielsen@groom.com

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To comply with U.S. Treasury Regulations, we also inform you that, unless expressly stated otherwise, any tax advice contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code, and such advice cannot be quoted or referenced to promote or market to another party any transaction or matter addressed in this communication.

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Notice: This message is intended only for use by the person or entity to which it is addressed. Because it may contain confidential information intended solely for the addressee, you are notified that any disclosing, copying, downloading, distributing, or retaining of this message, and any attached files, is prohibited and may be a violation of state or federal law. If you received this message in error, please notify the sender by reply mail, and delete the message and all attached files.

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file:///T|/...600%20Response%20[YELLOW]/United%20Federation%20of%20Teachers%20Fund/Waiver--UFT%20Welfare%20Fund.htm[07/12/2011 11:01:05 AM]

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From: Nielsen, Mark (mcn@groom.com) [MNielsen@groom.com] Sent: Monday, September 20, 2010 10:28 AM To: Pham, Erica (HHS/OCIIO) Subject: WAIVER Application/Supplement to UFT Welfare Fund Waiver request Attachments: Supplemental Attestation.pdf; Segal Letter re Cost Increase.pdf
Dear Erica, Following up our telephone conversation Friday afternoon regarding the United Federation of Teachers Welfare Fund's (the "Fund's") request for waiver of the restricted annual limit that would otherwise be applicable to its prescription drug benefit program, I am attaching two items: 1.A supplemental attestation Fund's Executive Director, attesting that an increase in the annual limit from its current level of $ (b)(4) to $750,000 would result in a decrease in access to benefits; and 2.A letter from the Fund's actuary, the Segal Company,in support of the Fund's projected cost increases. As we discussed on Friday afternoon and as detailed in the Fund's waiver application, the City of New York is the sole source of funding for the Fund's benefits, and the City's contribution rate is contractually established pursuant to a collective bargaining agreement that was negotiated long before the Affordable Care Act's enactment. The parties have been un gree upon new contractual terms e 2009, and there is no source of additional revenue that can cover the additional $(b)(4) in coststhat it is imperative would result from a (b)(4) percent increase in the Fund's annual limit. Accordingly, waiver of the restricted a if the Fund is to continue offering prescription drug benefits. As you requested Friday afternoon, we are providing this information as early as possible today (aside from the weekend, we also had theJewish holiday). Please let me know if you have any question or need anything else. We appreciate your consideration of this matter, and we look forward to hearing from you. Best regards, Mark C. Nielsen

Mark C. Nielsen / 1701 Pennsylvania Ave., N.W. / Washington, DC 20006 / Phone: 202-861-5429 / Fax: 202-659-4503 / www.Groom.com / MNielsen@groom.com

To comply with U.S. Treasury Regulations, we also inform you that, unless expressly stated otherwise, any tax advice contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code, and such advice cannot be quoted or referenced to promote or market to another party any transaction or matter addressed in this communication.

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file:///T|/...%20Teachers%20Fund/WAIVER%20ApplicationSupplement%20to%20UFT%20Welfare%20Fund%20Waiver%20request.htm[07/12/2011 11:01:06 AM]

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From: Pham, Erica (HHS/OCIIO) Sent: Friday, September 24, 2010 12:51 PM To: 'Nielsen, Mark (mcn@groom.com)' Cc: Botwinick, Alexandra (HHS/OCIIO); Andrews, Jane (HHS/OCIIO) Subject: RE: WAIVER Application/Supplement to UFT Welfare Fund Waiver request
Dear Mark: Thank you for this additional information. As stated in the supplemental attestation materials you sent to us, wed like to understand how the addition of the $750,000 annual limit will result in Fund members losing access to valuable prescription drug benefits, as the Fund would be forced to discontinue or drastically diminish its prescription drug package to remain solvent. Specifically, we would like more information regarding why the addition of a (b)(4) % increase will dramatically affect the solvency of the Fund. If possible, we would like this information by COB today. Kind Regards, Erica Pham From: Nielsen, Mark (mcn@groom.com) [mailto:MNielsen@groom.com] Sent: Monday, September 20, 2010 10:28 AM To: Pham, Erica (HHS/OCIIO) Subject: WAIVER Application/Supplement to UFT Welfare Fund Waiver request

Mark C. Nielsen / 1701 Pennsylvania Ave., N.W. / Washington, DC 20006 / Phone: 202-861-5429 / Fax: 202-659-4503 / www.Groom.com / MNielsen@groom.com

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Dear Erica, Following up our telephone conversation Friday afternoon regarding the United Federation of Teachers Welfare Fund's (the "Fund's") request for waiver of the restricted annual limit that would otherwise be applicable to its prescription drug benefit program, I am attaching two items: 1.A supplemental attestation from the Fund's Executive Director, attesting that an increase in the annual limit from its current level of $100,000 to $750,000 would result in a decrease in access to benefits; and 2.A letter from the Fund's actuary, the Segal Company,in support of the Fund's projected cost increases. As we discussed on Friday afternoon and as detailed in the Fund's waiver application, the City of New York is the sole source of funding for the Fund's benefits, and the City's contribution rate is contractually established pursuant to a collective bargaining agreement that was negotiated long before the Affordable Care Act's enactment. The parties have been unable to agree upon new contractual terms si 2009, and there is no source of additional revenue that can cover the additional $(b)(4) in coststhat (b)(4) percent increase in the Fund's annual limit. Accordingly, waiver of the restricted mit is imperative would result from a if the Fund is to co e offering prescription drug benefits. As you requested Friday afternoon, we are providing this information as early as possible today (aside from the weekend, we also had theJewish holiday). Please let me know if you have any question or need anything else. We appreciate your consideration of this matter, and we look forward to hearing from you. Best regards, Mark C. Nielsen

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Groom Law Group, Chartered

Notice: This message is intended only for use by the person or entity to which it is addressed. Because it may contain confidential information intended solely for the addressee, you are notified that any disclosing, copying, downloading, distributing, or retaining of this message, and any attached files, is prohibited and may be a violation of state or federal law. If you received this message in error, please notify the sender by reply mail, and delete the message and all attached files.
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file:///T|/...onse%20[YELLOW]/United%20Federation%20of%20Teachers%20Fund/Additional%20Info%20Requested%209-24-2010.htm[07/12/2011 11:01:06 AM]

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To comply with U.S. Treasury Regulations, we also inform you that, unless expressly stated otherwise, any tax advice contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code, and such advice cannot be quoted or referenced to promote or market to another party any transaction or matter addressed in this communication.

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file:///T|/...onse%20[YELLOW]/United%20Federation%20of%20Teachers%20Fund/Additional%20Info%20Requested%209-24-2010.htm[07/12/2011 11:01:06 AM]

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From: Nielsen, Mark (mcn@groom.com) [MNielsen@groom.com] Sent: Monday, September 27, 2010 11:50 AM To: Pham, Erica (HHS/OCIIO) Cc: Botwinick, Alexandra (HHS/OCIIO); Andrews, Jane (HHS/OCIIO); Mazawey, Lou (ltm@groom.com) Subject: RE: WAIVER Application/Supplement to UFT Welfare Fund Waiver request
Dear Erica,

In your email, you request additional information as to how the increase in the United Federation of Teachers Welfare Fund's (the "UFT Fund" or the "Fund") annual limit for prescription drugsto $750,000will result in an decreasein Fund members' access to benefits. As detailed in the UFT Fund's waiver application and its supplement, the Fund is established pursuant to a collective bargaining agreement, pursuant to which the New York City Department of Education contributes a contractually-specified amount to the Fund on behalf of each participant, and Fund participants are not charged a premium for access to coverage. The Fund's actuary has calculated that increasingthe Fund's annual limit for prescription drugs to $750,00 ne cause the Fund's costs to increase (b)(4) percent in Plan Year 10/1/2010-9/30/2011,which translates to approximately $(b)(4) in that year alone. We understand e $750,000 restricted annual limit will The Department wishes further explanationtosupport the position that applica cause a significant decrease in Fund members' access to benefits.As further explained below, we respectfully submit that given the Fund's circumstances, the $(b)(4) cost increase satisfies the criteria for waiver of the restricted annual limit set forth in OCIIO's Sub-Regulatory Guidan September 3, 2010.

We hope this is helpful. We very much appreciate the Department's consideration of the UFT Fund's waiver application, and your courtesyin allowing additional time to respond to the Department's inquiry.As always, pleasecallusif you have any questions, or need anything else. Thanks.

Best regards, MarkC. Nielsen Lou Mazawey [019470/01]

From: Pham, Erica (HHS/OCIIO) [mailto:Erica.Pham@hhs.gov] Sent: Friday, September 24, 2010 12:51 PM To: Nielsen, Mark (mcn@groom.com) Cc: Botwinick, Alexandra (HHS/OCIIO); Andrews, Jane (HHS/OCIIO) Subject: RE: WAIVER Application/Supplement to UFT Welfare Fund Waiver request
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file:///T|/...ponse%20[YELLOW]/United%20Federation%20of%20Teachers%20Fund/Additional%20Info%20Received%209-27-2010.htm[07/12/2011 11:01:07 AM]

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Of course und were forced to cut benefits inany of these these ways, it would have to explainthe reason for the benefit cuts to its (b)(4) participants and dependents, who are unionizedteachers in New York City public schools andwho lack access to compar efits from other sources. Put simply, if HHS declines to grant the requested waiver, the Fund will be forced to cut benefits currently provided to its members, which is contrary to the purpose of the Affordable Care Act, and contrary to the very purpose for which the waiver program was established.

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Specifically, as detailed in the Fund's waiver application and its supplement, the Fund cannot increase the employer contribution rate to offset the $(b)(4) cost increase that would result from imposition of the restricted annual limit, given that the employer contribution rate is ed by contract and the parties have been unable to agree upon the terms of a new contract since 2009, resulting in a freeze of the employer's contribution rate. And given thatFund members are not charged a premium for access to Fund coverage, there is literally no source of additional revenue that the Fund can collect to offset the $(b)(4) cost increase that will result from imposition of a $750,000 annual limit on prescription drugs. Accordingly, if HHS decl rant the requested waiver, the Fund(the Chair of which is the President of the United Federation of Teachers) will haveto takesome action that willallow it to remain solvent, which would involve: (a) eliminating the prescription drug program entirely; (b) removingcertain drugs from the Fund's formulary andperhaps excluding drugs entirely from coverage, to offset the otherwise projected cost increase; or (c) cutting other critical benefits that the Fund providesto NYC teachers and their families-- such as dental and vision benefits -- to offsetthe additional $(b)(4) in coststhat will resultfrom the $750,000 annual limit. Under any of these scenarios, Fund members would experience "a nt decrease in access to benefits for those currently covered by [the Fund]," which is what OCIIO's waiver guidance requires. (See September 3, 2010 guidance, III(4)-(5)).

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Dear Mark: Thank you for this additional information. As stated in the supplemental attestation materials you sent to us, wed like to understand how the addition of the $750,000 annual limit will result in Fund members losing access to valuable prescription drug benefits, as the Fund would be forced to discontinue or drastically diminish its prescription drug package to remain solvent. Specifically, we would like more information regarding why the addition of a (b)(4) % increase will dramatically affect the solvency of the Fund. If possible, we would like this information by COB today. Kind Regards, Erica Pham

Mark C. Nielsen / 1701 Pennsylvania Ave., N.W. / Washington, DC 20006 / Phone: 202-861-5429 / Fax: 202-659-4503 / www.Groom.com / MNielsen@groom.com

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Dear Erica, Following up our telephone conversation Friday afternoon regarding the United Federation of Teachers Welfare Fund's (the "Fund's") request for waiver of the restricted annual limit that would otherwise be applicable to its prescription drug benefit program, I am attaching two items: tal attestation from the Fund's Executive Director, attesting that an increase in the annual limit from its current 1.A su level of $(b)(4) to $750,000 would result in a decrease in access to benefits; and 2.A letter from the Fund's actuary, the Segal Company,in support of the Fund's projected cost increases. As we discussed on Friday afternoon and as detailed in the Fund's waiver application, the City of New York is the sole source of funding for the Fund's benefits, and the City's contribution rate is contractually established pursuant to a collective bargaining agreement that was negotiated long before the Affordable Care Act's enactment. The parties have been unable to agree upon new contractual terms since 2009, and there is no source of additional revenue that can cover the additional $(b)(4) in coststhat mit is imperative would result from a (b)(4) percent increase in the Fund's annual limit. Accordingly, waiver of the restricted if the Fund is to co e offering prescription drug benefits. As you requested Friday afternoon, we are providing this information as early as possible today (aside from the weekend, we also had theJewish holiday). Please let me know if you have any question or need anything else. We appreciate your consideration of this matter, and we look forward to hearing from you. Best regards, Mark C. Nielsen

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Groom Law Group, Chartered

Notice: This message is intended only for use by the person or entity to which it is addressed. Because it may contain confidential information intended solely for the addressee, you are notified that any disclosing, copying, downloading, distributing, or retaining of this message, and any attached files, is prohibited and may be a violation of state or federal law. If you received this message in error, please notify the sender by reply mail, and delete the message and all attached files. To comply with U.S. Treasury Regulations, we also inform you that, unless expressly stated otherwise, any tax advice contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code, and such advice cannot be quoted or referenced to promote or market to another party any transaction or matter addressed in this communication.
UFTeach000012

file:///T|/...ponse%20[YELLOW]/United%20Federation%20of%20Teachers%20Fund/Additional%20Info%20Received%209-27-2010.htm[07/12/2011 11:01:07 AM]

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From: Nielsen, Mark (mcn@groom.com) [mailto:MNielsen@groom.com] Sent: Monday, September 20, 2010 10:28 AM To: Pham, Erica (HHS/OCIIO) Subject: WAIVER Application/Supplement to UFT Welfare Fund Waiver request

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file:///T|/...ponse%20[YELLOW]/United%20Federation%20of%20Teachers%20Fund/Additional%20Info%20Received%209-27-2010.htm[07/12/2011 11:01:07 AM]

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From: Botwinick, Alexandra (HHS/OCIIO) Sent: Monday, September 27, 2010 3:19 PM To: 'MNielsen@groom.com' Subject: Waiver of the Annual Limits Requirements of the PHS Act Section 2711 Attachments: OCIIO_Waiver_Acceptance_Letter.pdf Dear Applicant, Thank you for submitting an application for a Waiver of the Annual Limits Requirements of the PHS Act Section 2711. HHS has reviewed your application and made its determination. Please see the attached letter. Please confirm receipt of this letter by replying to this e-mail address with a copy to OCIIOOversight@hhs.gov. Please let me know if I can be of further assistance. Sincerely,

alexandra.botwinick@hhs.gov

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Alexandra Botwinick Office of Oversight HHS/OCIIO (301) 492-4177

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file:///T|/...Response%20[YELLOW]/United%20Federation%20of%20Teachers%20Fund/Approval%20Letter%20Sent%209-27-2010.htm[07/12/2011 11:01:07 AM]

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From: Nielsen, Mark (mcn@groom.com) [MNielsen@groom.com] Sent: Monday, September 27, 2010 3:33 PM To: Botwinick, Alexandra (HHS/OCIIO) Cc: Mazawey, Lou (ltm@groom.com); Brett Herr; OCIIO Oversight Subject: RE: Waiver of the Annual Limits Requirements of the PHS Act Section 2711
Dear Alexandra, As requested, this confirms receipt of the Department's email and attached letter, waiving application of the $750,000 restricted annual limit to the United Federation of Teachers Welfare Fund. We very much appreciate the Department's consideration of our request, and the courtesies extended to us. Best regards, Mark C. Nielsen

From: Botwinick, Alexandra (HHS/OCIIO) [mailto:Alexandra.Botwinick@hhs.gov] Sent: Monday, September 27, 2010 3:19 PM To: Nielsen, Mark (mcn@groom.com) Subject: Waiver of the Annual Limits Requirements of the PHS Act Section 2711

Alexandra Botwinick Office of Oversight HHS/OCIIO (301) 492-4177

alexandra.botwinick@hhs.gov

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Dear Applicant, Thank you for submitting an application for a Waiver of the Annual Limits Requirements of the PHS Act Section 2711. HHS has reviewed your application and made its determination. Please see the attached letter. Please confirm receipt of this letter by replying to this e-mail address with a copy to OCIIOOversight@hhs.gov. Please let me know if I can be of further assistance. Sincerely,

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Mark C. Nielsen / 1701 Pennsylvania Ave., N.W. / Washington, DC 20006 / Phone: 202-861-5429 / Fax: 202-659-4503 / www.Groom.com / MNielsen@groom.com

file:///T|/...United%20Federation%20of%20Teachers%20Fund/Confirmation%20Receipt%20of%20Approval%20Letter%209-27-2010.htm[07/12/2011 11:01:07 AM]

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Notice: This message is intended only for use by the person or entity to which it is addressed. Because it may contain confidential information intended solely for the addressee, you are notified that any disclosing, copying, downloading, distributing, or retaining of this message, and any attached files, is prohibited and may be a violation of state or federal law. If you received this message in error, please notify the sender by reply mail, and delete the message and all attached files. To comply with U.S. Treasury Regulations, we also inform you that, unless expressly stated otherwise, any tax advice contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code, and such advice cannot be quoted or referenced to promote or market to another party any transaction or matter addressed in this communication.

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file:///T|/...United%20Federation%20of%20Teachers%20Fund/Confirmation%20Receipt%20of%20Approval%20Letter%209-27-2010.htm[07/12/2011 11:01:07 AM]

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