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REVISED "GRANDFATHERED" HEALTH PLAN REGULATIONS RELEASED
Employers will be able to change insurers and still keep health care plans that are similar to what they have had without having to meet all the new requirements of the health care reform law, under proposed and interim final rules issued Monday, November 15th.
The rules were issued by the IRS, the Department of Labor's Employee Benefits Security Administration (EBSA) and the Office of Consumer Information and Insurance Oversight in the Department of Health and Human Services.
In June, IRS, EBSA and HHS issued a “grandfather” interim final rule that sharply limited benefit reductions or consumer cost increases that can be made to plans that existed before enactment of the Patient Protection and Affordable Care Act (PPACA) in order to be exempt from many of the law's new requirements.
Under the original regulation, a plan could lose its grandfathered status if employers changed issuers, but self-funded plans could change third-party administrators without losing grandfathered status, according to a fact sheet issued by the agencies.
The new amendment to the interim final rule “allows all group health plans to switch insurance companies and shop for the same coverage at a lower cost while maintaining their grandfathered status, so long as the structure of the coverage doesn't violate one of the other rules for maintaining grandfathered plan status,” it said.
Under the amended rules, employers that offer the same level of coverage through a new issuer can remain grandfathered as long as the change does not result in significant cost increases, a reduction in benefits or other changes in the original rule. [Click here to view our 6/25 newsletter on grandfathered health plan regulations for more information on the changes that would result in a loss of grandfathered status.]
A change of issuers in the individual market will still result in the loss of grandfathered status, the fact sheet said.
Unison will continue to update our clients as new information becomes available pertaining to these regulations and health care reform. Please contact your Unison Employee Benefits Consultant should you have any questions regarding your specific health plan.
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