Tuesday, June 15, 2010

Grandfathered Plans continued

As reported yesterday, the government issued regulations restricting the ability of "grandfathered" health plans to make changes to their plans if they want to retain their exemption from the new health reform law. The way the law works, certain changes that will take effect in 2014, such as the minimum benefits package, will not apply to plans that exist on the date of passage of the law (i.e., grandfathered plans, or plans that are grandfathered under the Act). These plans still have to comply with certain aspects of the new law, such as the elimination of lifetime caps on benefits, but there would be major changes from which these plans would be exempt.

The rules that came out yesterday warned employers not to increase the costs or greatly decrease benefits between now and 2014 if they want to hold onto their exempt grandfathered status, as explained by Huffington Post here. The idea is to make it clear that the exemption only applies if the plan doesn't change a whole lot to the detriment of employees. Employers can improve coverage if they want without losing the exemption, but they can't decrease coverage and increase costs beyond certain limits.

The rules are 121 pages long, so I haven't finished reading them. If there's anything really exciting in them, we'll write comments and post them here. If you have any questions, ask! Jennifer

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