Upon renewal, fully insured large groups may choose to grandfather a plan that was in existence before March 23, 2010 (the date the health care reform law was enacted), and avoid implementing these provisions of the Patient Protection and Affordable Care Act of 2010:
- No-cost in-plan preventive care services, colorectal cancer screenings and exams
- Extension of the limiting age for dependent children to age 26, when they have access to other health coverage such as under their own employer plan (The extension of the limiting age to 26 for grandfathered plans does not apply to dependent children who have access to other health coverage.)
- Prohibition against favoring highly compensated employees with special plan eligibility or a higher level of benefits
Oregon small groups do not have an option to grandfather.
Requirements for maintaining grandfathered status
Guidelines issued by the federal government restrict an employer’s ability to change benefits or increase cost-sharing while maintaining a grandfathered plan. These disqualifiers include:
- Dropping or cutting benefits for any particular health issue, such as diabetes
- Raising coinsurance
- Raising copayments by more than $5, adjusted for medical inflation, or a percentage equal to medical inflation plus 15 percentage points (whichever is greater)
- Raising deductibles beyond a percentage equal to medical inflation plus 15 percentage points
- Increasing employee premium contribution by more than five percentage points
- Adding or reducing annual limits
Required disclosure for grandfathered plans
Government guidelines also require Health Plans to include the following statement with all member materials for grandfathered plans:
This group health plan believes this plan is a “grandfathered health plan” under the Patient Protection and Affordable Care Act (PPACA). As permitted by PPACA, a grandfathered health plan can preserve certain basic health coverage that was already in effect when that law was enacted. Being a grandfathered health plan means that your plan may not include certain consumer protections of PPACA that apply to other plans, for example, the requirement for the provision of certain preventive health care services without any cost sharing. However, grandfathered health plans must comply with certain other consumer protections in PPACA, for example, the elimination of the lifetime maximum benefit.
Questions regarding which protections apply and which protections do not apply to a grandfathered health plan and what might cause a plan to change from grandfathered health plan status can be directed to your employer or human resources department. ERISA plans: You may also contact the Employee Benefits Security Administration, U.S. Department of Labor at 866-444-3272 or www.dol.gov/ebsa/healthreform. This website has a table summarizing which protections do and do not apply to grandfathered health plans.
More information on health care reform for employers
- Fact sheet on grandfathering from the U.S. Department of Health & Human Services
- Questions and answers on grandfathering from the U.S. Department of Health & Human Services
information provided by Providence Health Plan 8/17/10
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