The Internal Revenue Service, Department of Labor, and Department of Health and Human Services issued interim final regulations on the definition of “grandfathered health plans” under the Patient Protection and Affordable Care Act (”PPACA”). The regulations can be found here at the Federal Register website (Search under “Grandfathered”).
Under the PPACA, certain group health plans and health insurance coverage existing on or before March 23, 2010 (the date of enactment), are subject only to certain PPACA provisions. The regulations address at what point changes to a group health plan or health insurance coverage existing on March 23, 2010 are significant enough to cause the plan or health insurance coverage to cease to be a grandfathered health plan. For example, the regulations provide that changes to the level of coinsurance (e.g., moving from a requirement that the participant pay 20 percent to a requirement that the participant pay 30 percent of inpatient surgery costs) would significantly alter the level of benefits provided and take a plan out of “grandfathered status.” The regulations also require group health plans to maintain documentation of the terms of a grandfathered plan as long as grandfathered status is claimed. Any design changes should be reviewed carefully before implementation, particularly before upcoming fall open enrollment.
